International taxation · Taxes

Is there a VAT Threshold for digital goods sold to EU buyers from a US company?

Kashif Jehangir Assistant Manager Administration at Private Company

January 25th, 2017

We're a small US company selling digital course material to a world wide audience. We have gotten conflicting advice about whether or not we need to register and collect VAT for EU buyers, even though our amounts for each country amount to just a few sales per month per EU state.

The overhead of setting up the infrastructure to collect, calculate and report EU VAT seems heavy compared to the number of sales we have. I have a hard time seeing it as even worth selling to EU buyers.

Juan Zarco Managing Director, Silicon Valley Ventures Growth Partners llp

January 28th, 2017

This is a corporate tax issue, which I dealt with when the company I worked for sold in Europe. I met with international accounting firms and VAT experts. First, it sounds that there is a de minimis situation where the income is so minor as to not warrant local country registration, and second, European countries are notably concerned about digital sales and lack of revenues from companies ranging from Microsoft to Google, which are undergoing tax challenges for the same type of revenues. So if your company has notable income, it will be targeted. For smaller revenues that reach a substantial threshold, I suggest consolidating all EU sales, choose one country as the base of operations to handle all VAT matters.

Krunoslav Gašpert Owner at Pullus Consulting

January 25th, 2017

Hi, currentry there is no threshold for the MOSS registration in the EU , so if you are selling digital services to non taxable person B2C in EU you are obligated to register and pay the VAT. The European Commission is considered about the implementation of the treshoaled from 2018.

Alex Neagu fintech, marketing, easy going, fun

January 27th, 2017

Steve Karmeinsky is wrong.

Any company world wide, selling to EU customers needs to incorporate for VAT in EU and collect VAT from those customers when selling online.

Steve Karmeinsky CoFounder City Meets Tech / Lean Capital Ltd / Placeholder Ltd

January 26th, 2017

If you're outside the EU you do not need to charge VAT for services to the EU, I don't believe the US has a tax/VAT arrangement with the EU. If you set-up shop in an EU member country and sell from there, then you would have to collect VAT.