How does Sellfy handle the new EU VAT laws?

In this article:

How do I comply with the EU VAT laws as a seller?

What does Sellfy do to help me with VAT?

How do I enable VAT collection?

How do I register to sell as a VAT Mini One Stop Shop (VAT MOSS)?

How do I block sales from the EU?

The VAT MOSS data report

Further reading for VAT-related topics


How do I comply with the VAT rules as a seller?

On January 1st of 2015, the new EU VAT rules for digital products came into force. Since then, the European Union VAT for digital products is charged based on the country where the buyer is located, as opposed to the seller's location, as it was previously.

Important! The United Kingdom is currently in a transition period to leave the European Union, which will last until the end of 2020. During this transition period, the UK will be treated as an EU Member for tax purposes. As a result, the MOSS reports for Sellfy stores will continue to apply VAT for UK customers.

Essentially, as a seller of digital goods, you have three options:

  1. Register to pay VAT for every EU member state in which you sell.
  2. Register for the VAT Mini One Stop Shop or "VAT MOSS". (Generally considered easiest!)
  3. Stop selling to the customers in the EU altogether.

If you decide that you will be selling to the EU, make sure to enable the tax collection in your Tax Settings.

Note: This is not legal advice. If you have questions or concerns, please consult your lawyer and/or accountant, who will be in a better position to advise you on your legal rights and liabilities.


What does Sellfy do to help me with VAT?

Sellfy helps you maintain compliance with the new regulations. We'll make it easy for you to collect VAT on any order placed in the EU. We'll  identify the buyer's location, charge the appropriate tax and provide a VAT MOSS report that contains all the information that you need for your single calendar quarterly return. See here how to enable the collection of this information in Tax Settings.

Determining the buyer's location

Following the European Commission requirements, we store two non-contradictory identifiers of the buyer’s location, based on:

  1. The IP address
  2. Customer’s own choice of a country
  3. Credit card (or Paypal) information

Charging the appropriate tax

We'll do the messy work and keep track of all current tax rates for each EU country. Once a buyer's location is determined, we charge the right percentage of tax for that country.  Keep in mind, that you won’t be able to edit the VAT rates for individual EU countries, we'll make sure that all the rates are up to date. If you have any questions on this, feel free to email into [email protected].

Provide a VAT MOSS data report

If you choose to go ahead with VAT MOSS, you’ll only have to submit a  single calendar quarterly return and VAT payment and the Member State will then take care of the rest, by sending all the “appropriate information and payment to each relevant member state’s tax authority.” We'll compile all needed information into one report, that you export whenever you need it. Read more here.


How do I enable VAT collection?

To start collecting taxes and collect the information need for VAT, you'll follow these steps:

  1. Log into your Sellfy Account
  2. Go to your Store Settings
  3. Select Tax Settings
  4. Enable tax in your store
  5. Optionally, you can select for these taxes to be included in the product price and/or charge taxes on your shipping costs as well.
  6. Press Save

How do I register to sell as a VAT Mini One Stop Shop (VAT MOSS)?

To register for the VAT MOSS, please go here: EU VAT MOSS scheme registration

Please remember, we aren't tax advisors, so we won't be able to guide you on your business choices, instead, you'll ask an attorney or your tax accountant.  For more information and a full list of MOSS registration portals, including one in your country, visit the European Commission website.

If you choose to go ahead with VAT MOSS, you’ll only have to submit a  single calendar quarterly return and VAT payment and the Member State will then take care of the rest, by sending all the “appropriate information and payment to each relevant member state’s tax authority.”

After you register, we'll help you collect the required taxes. Read how to enable VAT collection here.


How do I block sales from the EU?

If you'd rather stop selling in the EU than register for VAT, you can easily do so! Follow the steps below.

  1. Log in your Sellfy account
  2. Navigate to your Store Settings
  3. Select Tax Settings
  4. Enable tax in your store
  5. Choose "Don't allow purchase from European Union"
  6. Press Save

This will block all purchases from the EU, which means that you don't need to collect, register or report VAT. Please remember that we are not tax advisors, so if you have concerns or questions, please contact an attorney or an accountant.


The VAT MOSS data report

If you've enabled your Tax Settings, Sellfy collects information required for your VAT MOSS reports and provides this data to you for tax purposes. The report is accessible to you at any time in your Sellfy account and can be generated based on custom months and years. You'll simply export the report.

This report will contain:

  1. The countries where your buyers were located
  2. The subtotal of a purchase
  3. Tax amount charged
  4. Purchase Total 
  5. The currency of the purchase

To export your VAT MOSS report:

  1. Log in to your Sellfy Account
  2. Navigate to Store Settings > Tax settings
  3. Scroll down to VAT MOSS report
  4. Select the month(s) and year from the dropdown menu
  5. Click Export data


Further Reading

Here are some helpful links for you to read further about these new regulations affecting your business practices.

The Guardian article on New EU VAT regulations
European Commission website
EU-VAT GitHub repo with relevant links

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