March 26, 2019

What are the risks/issues with invoicing EU customers?

I sell ~ $20/month memberships to a site with programming screencasts. I'm not in the EU and very few of my customers are.

I recently got this email and have two questions:

"I would like to subscribe with my business credit card, but for that I would need my business address and VAT number on the receipt/invoice."

  1. Can this easily be done with Stripe Billing, or should I invoice them via Paypal?

  2. Does this open me up to some kind of accounting liabilities with from the EU?

  1. 2

    For 2: I don't think so. You shouldn't tax VAT for him if he's in the EU and he is responsible for declaring in his country that he has to pay VAT for those services according to his residing country laws.

  2. 1

    Paypal and Stripe won't handle VAT for you. This is why I use Paddle which is UK based and works as a reseller actually. They fully handle VAT for me so I don't have to. It's a bit more expensive but it's worth it.

    You need to collect VAT from EU based end customers without EU issued VAT number. And the collected VAT must be sent back to the customers country. Google for "MOSS scheme".

    1. 1

      My question was about someone who does have a VAT number and wants me to put that on an invoice or receipt. Would sending such an invoice open me up to any liabilities in the EU?

      1. 2

        No. The customer with a VAT number is better for you than a customer without VAT number. If the customer enters his VAT number your invoice will be issued without VAT included (I mean percentage). So the customer will pay VAT yourself and he's fully responsible for this.

        1. 1

          Thanks, this is exactly what I wanted to make sure of!

      2. 1

        In your case: if a customer provides a VAT number, you don't need to apply VAT.

        Depending on your local legislation you may have to perform a due diligence check and ensure the provided VAT number is valid (there are several sites and webservices for this).