August 29, 2016

European VAT Demystified for Non-European Digital Services Sellers (

Our contribution on VAT on digital services for U.S. suppliers just published on the TaxJar Blog:

European VAT Demystified for Non-European Digital Services Sellers

Non-European (including U.S.) businesses providing digital services – such as telecommunication, broadcasting and electronically supplied services – to European consumers (= private customers) must collect, pay and report European VAT on every e-sale, regardless of the number of transactions made in Europe or of the overall yearly turnover.

VAT (the acronym for Value Added Tax) is a consumption tax applied in all Europe by each European state separately. VAT rates change according to the State where the individual customer is located.

In this article, we are not referring to B2B supplies of digital services to European businesses: in that case, other VAT territorial rules do apply. We are focusing on sales to European individual customers purchasing the services outside the scope of any business.

Also, we are not referring to the online sale of physical goods, for which other rules apply, with the potential application of customs duties at the EU border.

Furthermore, other services and products that may look, at first sight, as digital services are not actually covered by the rules described in this contribution. For instance, tickets to cultural, artistic, sporting, scientific, educational, entertainment or similar events booked online; accommodation, car-hire, restaurant services, passenger transport or similar services booked online.

For full article: