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How do US Small Businesses (1K-10K MRR) handle EU VAT?

I'm really frustrated by the lack of information on this topic. I understand it's sensitive and people may avoid discussing it online to leave no trace. But a better guide is needed.

To be specific: This is for those earning $1K-10K MRR, with a substantial portion coming from the EU i.e. you are in a weird placed of almost being big enough to file but not having the revenue to dedicate a lot of resources to this.

EU rules demand VAT payment for even a single transaction. They're unlikely to chase a $9 sale, but there's a threshold where this becomes more probable.

At that point, you have two options:

  1. You were smart and used Paddle or Lemon Squeezy from the start. As they're a Merchant of Record, you don't need to worry about tax; they report it for you (you technically sell to them, and they sell to the customer). They charge more, but it might be worth it depending on your volume.
  2. You chose Stripe and now find yourself owing various countries small amounts. You must register for the One Stop Shop.

Let's discuss option 2.

The One Stop Shop: Register in one country, submit a quarterly return, and that's it. Except this is Europe, with outdated software often not in English. FML. Plus, you may need an EU ID to register (like the Estonian website).

The Big Questions

I'm looking for nitty-gritty details. PLEASE do NOT comment with generic info that just rephrases what I've said.

The community needs this. Actual details of:

Where did you register (which country)?
What was the process like (which form did you fill out)?
How often do you file?
What did you need (LLC info, etc.)?
What are the fees?
Are there services that can do this for you (and how much do they charge)?

I'd really appreciate this information.

Thank you!

posted to Icon for group Legal, Tax, and Accounting
Legal, Tax, and Accounting
on January 7, 2024
  1. 1

    Well facing now the same problems ;) Did you found out more? Maybe you let us know?

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