On 1st January 2015 the EU ‘Place Of Supply’ rules are changed.

VAT is now be payable in the place of the customer not the place of creation/selling.

The theory is that ‘consumption’ taxes such as VAT should be payable where the products or service are enjoyed and used.

If you sell digital goods online what does this mean?

I have put together this short video to explain the basics.


I should add that I am not an expert.  I am not an accountant or lawyer.

I am a small business who needs to comply like you.

In the video I do state to prove B2B you need the VAT number of your business customer.  Actually you can also provide  “alternative evidence”.

If you sell B2B , alternative evidence could be asking your customers  to tick a check box at the point of checkout to confirm they are a business.

It is your responsibility as a business owner to know where your customers are, and to know that you are complying to the new rules.

Please understand  if you sell through an online portal, gateway or marketplace you still need to check this out.   A few will cover this for you, most will not.

Tax, including VAT, is your responsibility.

Here is an HMRC video which may also help.

Digital services suppliers urged to register for new EU VAT service – Q&A’


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