EU VAT on ecommerce platforms

Selling Digital Goods Complying With EU VAT: Which Platforms Are Ready?

In the golden past (before January 2015), VAT rules for e-commerce platforms were very simple. The vendor charged the VAT of his or her home state on all transactions. If you bought something from Bob in Belgium, Bob (or you) paid Belgian VAT. If you bought something from Dave from Denmark, Dave (or you) paid Danish VAT.

Now, though, the rules are sharply different. Now, you have to pay VAT for the member country you’re selling to, not the one you’re selling from.

Digital taxes illustration

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The new VAT rules are supposed to prevent web giants like Apple, Amazon and Google from funneling their gigantic revenues for the whole EU through low-VAT Luxembourg. But as the rapid transition from the new rules’ initialism, VATMOSS, to the Twitter hashtag #VATMESS, indicated, it’s bad news for small and microbusinesses who can ill afford the administrative hassles of sorting out compliance with 28 different, widely differing VAT codes. Particularly unpopular amongst microbusinesses is the requirement to collect and store VAT information – no concern to giants like Twitter, but a real impediment to a home office worker with only so many hours in the day and small margins.

The solution has been for small businesses to transfer to online platforms that can manage VAT compliance for their customers. We’ve combed the web for the best online platforms and check their VAT compliance, and here they are:

Platform EU VAT-Compliant
Bandcamp Yes More info
Bigcommerce Yes More info
Envato Yes More info
Etsy Yes More info
Gumroad Yes More info
PayHip Yes More info
Pulley Yes More info
Rainmaker Yes
Selz Yes More info
SendOwl Yes More info
Shopify Yes More info
Squarespace No More info
Tictail Yes

Obviously the best platform is the one that matches your needs best, but providers that offer comprehensive support to deal with the new, restrictive VAT rules will have a big leg up over their rivals.

Digital taxes illustration

Wasting your time with sales taxes, VAT, or GST? Imagine you could automate this mess in minutes, and have more time to make more profits. No pain, all gain! We'll tell you how →

* At Quaderno we love providing helpful information and best practices about taxes, but we are not certified tax advisors. For further help, or if you are ever in doubt, please consult a professional tax advisor or accountant.