VAT Compliance / Filing

[Casey Kolb]

@d-healey said in VAT Compliance / Filing:

@Casey-Kolb I registered for VAT MOSS in Ireland. But if you're US based why do you have to pay EU VAT? I don't pay US taxes.

Sadly even non-EU businesses are equally liable for collecting and reporting VAT. It's a royal pain in the ass frankly. The UK requires you to register regardless of the threshold as of 2021.

[Dan Korneff]

@Casey-Kolb said in VAT Compliance / Filing:

Sadly even non-EU businesses are equally liable for collecting and reporting VAT.

This is only true if the corporation has a physical presence in that country.
These are the rules I follow:

*Are United States companies required to register for VAT if they are receiving or giving services to U.K. clients?

The answer is not a simple yes or no, but depends on many factors, such as:

• Whether the U.S. company has a physical presence in the U.K.
• Location of the recipient of services
• Does the U.S. company have an office or warehouse in the U.K.?
• Is the U.S. company supplying services to the U.K.? If so, will the services be performed in the U.K.?

One new and ever changing area of VAT regime is the taxation of internet services. Some countries have imposed it and others are considering imposing it when there is not a presence as outlined above, but there are cloud services or internet commerce.

Let’s look at an example of a U.S. company that sells software to a U.K. business. In the U.K., granting software usage rights through a licensing agreement is generally considered supplying services for purposes of VAT.

If the U.S. company does not have any presence in the U.K., then the U.K. company will most likely be held responsible for VAT. What if the U.S. company has an office in the U.K., or sells to an individual in the U.K. instead of a company? In this case, the U.S. company may be held responsible for registering for VAT.*

[Casey Kolb]

@dustbro Hmm unfortunately this is not accurate. Where did you get that information? There are countless articles explaining the new details, especially since a lot of things changed in 2021. Thresholds and country of residence for your business don't apply anymore. If you sell digital goods to any customer in the EU, you must charge VAT and report it.

https://barn2.com/eu-vat-easy-digital-downloads-guide/
https://www.quaderno.io/digital-tax-guides/eu-vat-guide

[d.healey]

@Casey-Kolb What dustbro is quoting seems to relate UK VAT which is separate from the EU Digital Services VAT.

[Casey Kolb]

@d-healey Ah I see. I'm speaking with a VAT accountant today, so I'll report back ;)

[Dan Korneff]

Now I have to double check with my accountant

[d.healey]

@Casey-Kolb said in VAT Compliance / Filing:

@d-healey Ah I see. I'm speaking with a VAT accountant today, so I'll report back ;)

@Dan-Korneff said in VAT Compliance / Filing:

Now I have to double check with my accountant

So what did you find out?

[Dan Korneff]

@d-healey said in VAT Compliance / Filing:

So what did you find out?

I haven't followed up. Completely slipped my mind.

[bendurso]

For me it is easier to use a third party service like FastSpring to take care of paying the VAT to Europe (and each country-specific tax). A while ago I decided to move from using WooCommerce/Paypal to FastSpring for this reason. Now I'm considering automating FastSpring with WooCommerce via webhooks.

[Casey Kolb]

@d-healey We use Quaderno for VAT compliance. It's a bit pricey but it's the most robust thing out there for Woocommerce sites.