Value Added Tax (Vat) on Digitized Sales in the European Union (EU)

Under the new rules on digital sales, sales supplied from countries outside of the EU to final consumers in the EU are no longer tax free since the place of taxation is shifted from the place the service provider or operator is located to the place where the addressee of the services consumes those services. The new VAT rules apply to goods and services that are digitally delivered to individual consumers (business-to-consumer or B2C sales). Non-EU based companies must report and remit their VAT tax liabilities to the EU member state in which they are registered.

The following questions have been addressed in this article:

What is a digital good or service?
How is VAT calculated for digitized sales?
How are “bundled” deliveries apportioned and treated for taxation purposes?

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