EU VAT Regulatory Compliance needed for selling to EU customers
Steff Vanhaverbeke
Hi
I would like to highlight an important compliance aspect for platforms facilitating sales to European Union (EU) citizens and businesses.
As per EU VAT regulations, platforms like Beacons.ai that enable the sale of digital goods and services (such as e-courses and e-books) to EU customers are generally considered to fall under the category of “platform operators.” Depending on the nature of the transactions, this can make the platform itself responsible for charging, collecting, and remitting VAT to the relevant EU tax authorities.
This responsibility applies because:
1. VAT must be calculated based on the customer’s location in the EU, not the seller’s.
2. Sellers (creators in this case) depend on the platform for compliant VAT calculations and collection.
3. The current setup may leave creators unable to meet their legal obligations under EU VAT law, particularly if the platform does not actively support the collection of VAT at the point of sale.
I understand that VAT compliance for a global audience can be complex, but addressing this proactively will not only help creators like myself but also position Beacons.ai as a preferred platform for international creators adhering to regulatory standards.
Can you please clarify if the platform has plans to integrate VAT-compliant tools, such as automated VAT calculation and reporting, or consider incorporating a system like the One-Stop Shop (OSS) for EU VAT compliance? This would greatly benefit creators and businesses worldwide.
Looking forward to your response. Thank you for your attention to this matter.
Best regards,
Steff
Kat Tung
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VAT MOSS / EUROPEAN TAX ON DIGITAL PRODUCTS
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Patricia Kroondijk
Please explain better how you manage VAT MOSS / EUROPEAN TAX on digital products. I know Teachable has a clear proposition there.
I do think Stripe might take care of some part of it. So to start with, just a general description of what Stripe does in relation to Beacons would be helpful. I'll put it in the form.
Jacob Choi-Durham
Hey Patricia Kroondijk, thanks for your feedback! I have a few more questions for you:
- What specific information or features are you looking for regarding VAT MOSS and European tax management on digital products?
- How does the current lack of information on VAT MOSS impact your use of Beacons?
- Are there any specific functionalities from Teachable's VAT MOSS handling that you find particularly useful and would like to see in Beacons?
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Jacky Zhu
Merged in a post:
price for the product and automatically calculate the applicable VAT based on the buyer's country
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Wanda Training
Is it possible to set a net price for the product and automatically calculate the applicable VAT based on the buyer's country? As a seller, I am required to charge and remit VAT according to the tax rate of the buyer's country. An automated solution for this would greatly simplify managing international transactions. Is such a feature available?
Jacob Choi-Durham
Thank you for posting, Wanda Training! I have a few more questions for you:
- What countries do you primarily sell to, and are there specific VAT rates you are concerned about?
- Do you need the VAT calculation to be displayed to the buyer during checkout, or is it sufficient for internal records?
- Are there any specific integrations or accounting software you currently use that this feature should be compatible with?
Jacob Choi-Durham
Hiya Steff Vanhaverbeke, thanks for this post! I have a few more questions for you:
- What specific features or tools would you find most helpful for VAT compliance on the platform?
- Are there any particular challenges you currently face with VAT compliance that you think the platform could help address?
- How important is VAT compliance in your decision to use Beacons.ai compared to other platforms?
Steff Vanhaverbeke
Jacob Choi-Durham
Hi Jacob,
Thank you for your thoughtful response and follow-up questions. I appreciate the opportunity to provide more details.
- What specific features or tools would you find most helpful for VAT compliance on the platform?
I can attach screenshots of how VAT is handled on another platform that adheres to EU regulations. Here are the key features that would be most helpful:
• Automated VAT Calculation: VAT rates should be automatically calculated based on the customer’s location, as required by EU law.
• Customer Location Verification: Integration of tools to verify the customer’s location (e.g., by collecting and validating two non-contradictory pieces of evidence such as IP address and billing address).
• VAT ID Validation: For B2B transactions, there should be an option to validate the customer’s VAT ID and apply the reverse charge mechanism where applicable.
• OSS Reporting: Generating detailed reports that align with the EU’s One-Stop Shop (OSS) filing requirements would save significant time and effort for creators and businesses.
- Are there any particular challenges you currently face with VAT compliance that you think the platform could help address?
Currently, it seems that Beacons.ai does not handle VAT in a manner compliant with EU regulations. The main challenges are:
• VAT collection at the point of sale: This is critical for compliance when selling to EU consumers.
• Separate invoicing requirements: While Beacons.ai allows us to add VAT details manually, this doesn’t address the need for real-time VAT application during transactions.
• Manual reporting burden: Without integrated tools, creators must manually calculate, collect, and report VAT, which is time-consuming and increases the risk of errors.
- How important is VAT compliance in your decision to use Beacons.ai compared to other platforms?
This is a deciding factor. As a business owner, I am legally obligated to comply with EU VAT regulations. If a platform cannot support these requirements, it limits my ability to use it for EU transactions. VAT compliance isn’t just a feature; it’s a necessity for operating lawfully in the EU.
I hope this feedback is helpful as you consider enhancements to the platform. Please let me know if you need further information or clarification.
Thank you for your attention to this important matter.
Best regards,
Steff
Steff Vanhaverbeke
Jacob Choi-Durham I don't see any updates on this? What's the status of this (urgent) feature request?