EU VAT Rules, what do they mean for my digital business?

EU VAT Rules, what do they mean for my digital business?
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New EU VAT Rules – pay attention to where you are selling your digital goods!

We’ve been getting a lot of enquiries from customers operating digital businesses and wanted to clarify the position regarding EU VAT Rules.

If you’ve been operating an online business in the EU (digital books, electronic goods, digital goods) and have been enjoying the benefits of not having to pay VAT on those sales and are a bit confused with the VAT situation, read on.

Businesses in the UK were exempt from paying VAT if their business was doing less than £81,000 in the year 2013-14. This was removed as of January 2015 IF you do sales in the EU. You can still trade without VAT if you are under £81,000 turnover and strictly doing business in the UK.

If you are a business and charge customers in the EU for your product or service, you will need to charge VAT at the rate applicable in that country.

This makes a change from charging the customer where they are located as opposed to where the seller is located.

MOSS Service

You can imagine how annoying it would be to have to account for every single customer and charging different VAT rates for each country based on where they are located in the EU.

The Government launced the MOSS (Mini One Stop Shop) EU VAT Portal for agents.  This includes accountants such as ourself or yourself) to submit the VAT return as per normal. The MOSS service adds the VAT element for each EU country you have sold digital products in.

You need to register for VAT beforehand, and this is something we can arrange for you.

Need help?

Contact us today if you are stuck with your EU VAT, or don’t know where to turn to when selling digital goods in the EU. You can also just call us on 01132486019 or email us on help@huquechaudhry.com

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About the author

We are a family run accountancy practice based in Leeds for the past 30 years. We give practical real world advice on moving your business to the next level with marketing, profit tips and taxation reduction advice. I'm Salman, running the Bookkeeping section at Huque Chaudhry. If you need any help with any aspect of your business, contact us right away.

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