Tax updates are coming on July 1st! Preparing your Quaderno account for the new One-Stop Shop schemes (OSS and IOSS)
VAT MOSS means that if you’re selling digital products to an EU citizen then VAT is charged at the purchaser’s (your customer) country rate instead of the seller’s (yours).
VAT MOSS applies to digital products being sold to consumers only, so it does not apply if you are selling to other businesses.
It also does not apply to physical products like t-shirts, or to online courses that include a live element like a webinar, but it does apply for any digital files like images, text, e-books, music, etc, and for services like website supply or hosting, software updates and the like. It even applies to online courses that do not include a live component.
VAT MOSS was brought in in January 2015 in order to prevent large companies like Amazon from routing sales through low-VAT countries like Luxembourg to avoid paying proper sales tax, but it obviously makes life a lot harder for smaller companies and sole traders – exactly the kinds of people Quaderno is trying to help.
The good news is that we at Quaderno are all over this, and will automatically apply the correct sales tax to your invoices as long as you can supply us with the location evidence we need – which most payment gateways allow you to set up easily. For more information on VAT MOSS, check out our EU VAT guide.
If your business stays below €10,000 in cross-border sales of digital goods per year, throughout the EU, then you can charge the VAT rate of your home country on all those cross-border sales. As soon as you surpass the €10,000 threshold, you should declare VAT through MOSS and apply your the VAT rate of your customer’s country.
You should register in VAT MOSS.
You can register for VAT or VAT MOSS with your local revenue or tax authority in your jurisdiction if you are based within the EU. We also have a list of partner accountants that could help with this.
We make it as easy as we can for you to comply with VATMOSS, but, as with registering for VAT and filing your tax return, there are some things Quaderno can’t do for you. Quaderno does not offer VAT registration services.
If you are based outside of the EU, then you must register with an EU member state for VAT MOSS purposes. Here’s an example of how to get started: How to Submit an Irish VAT MOSS Return as a Non-EU Business