The joy of taxes! Not only do you have to levy them, you have to report them. Merchants will be required to register for VAT in all EU countries where they sell a digital service. With VAT, you’ll thankfully have registration filing options, but you may want to review your product pricing strategy before choosing.
Let’s start with the two options.
Option 1: Merchants individually select and register in every EU member state where the business has non-taxable (non-business) customers. Choosing this option can potentially mean registering with 28 separate tax authorities, each with their own tax system and can present numerous logistical, legal, financial and language obstacles.
Advantage: Choose where you want to do business and get faster repayments of incurred VAT.
Disadvantage: Depending on where transactions occur, this could require individually registering in up to 28 member states.
Option 2: The company selects one EU tax authority with which to register, and the tax authority will then allocate the relevant VAT to the EU countries in which the company’s sales took place. Companies registering with MOSS are required to file quarterly VAT returns for all of their EU sales.
Advantage: Complete one quarterly VAT return and ensure compliance for all your EU sales.
Disadvantage: You’ll have 20 days from the end of each quarter to report and file your return and ensure the supporting data is accurate.
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