Struggling with VAT?
Don't give up. We know how to fix this.
Selling digital goods to customers in Europe?
If you sell digital products to EU customers, you need to charge VAT based on your customer location.
Yes, even if your business is based outside the EU.
And you also need to issue a VAT invoice with each one of your customers' orders. No exceptions.
"It's a nightmare to issue invoices with proper VAT!"
That may have been the case in the past, but not anymore. If your payment gateway is Stripe, we take care of the VAT craziness for you. Let us show you how.
If there’s an acronym that could replace VAT, it’s PITA - Pain In The Ass.
But hey, you already have some orders, so the ‘difficult’ part - getting the final purchase decision from your customer - is done. So let’s stop moaning and make things work in a smarter way.
At Quaderno, we really understand the scope of this problem and also we have seen that it’s not an isolated issue. So here’s our solution.
Dealing with the VAT craziness
Let's say you’re a EU based company that has sold a product priced at €25. In terms of VAT, you could face up 4 different scenarios:
- Your customer lives in your country. The breakdown of the invoice would be €25 for the item sold + VAT applicable in your country.
- Your customer lives in another EU country and doesn’t have a VAT number. The breakdown of the invoice would be €25 for the item sold + VAT rate applicable in your customer's country.
- Your customer lives in another EU country and does have a VAT number. No VAT is added, and the invoice will show a single charge of €25 for the item sold and the text "VAT reverse charged".
- Your customer lives outside EU. Same as the previous example. No VAT is added, and the invoice will reflect only €25 for the item sold.
In the first two cases, you have to include VAT in your invoice. In the last two cases, your invoice is VAT exempted.
So you need to issue a customised invoice depending on your customer’s country and VAT situation. Crazy, right?
By default, Quaderno can sort through this mess for you automatically. Just charge your customers with Stripe and we take care of the rest.
How we determine the right VAT rate
Quaderno will calculate the VAT rate that must be charged by detecting your customer's country and the country of their credit card.
If you’d like to check out the VAT that we automatically assign to your country, here’s the list:
|Country||VAT Rate (%)|
|CZ Czech Republic||21|
|Country||VAT Rate (%)|
|GB United Kingdom||20|
Ready to comply with EU VAT rules?
Quaderno can handle this mess for you, so you can focus on your real business, not on boring tax calculations.
Drop us a line if you have any questions. Happy to help!