EU, I suppose. What happens when you collect VAT from EU customers? Do you have to transfer to each of EU countries? Is it enforced somehow? What if you don't collect VAT at all? Technically speaking, EU customers buy stuff on your site, not in EU. E.g. they also buy stuff from US Amazon.com and don't pay any VAT. Especially for digital goods - there is no need for an EU delivery address.
It depends. Apple pays VAT on your behalf, so you don’t have to do anything.
If, let’s say another service does not do that, you have to pay it your self, but MOSS[1] exist for that, which means that you’ll pay for your local tax agency, and it will distribute VAT payments per country.
European Economic Area to be precise (i.e. Norway, Switzerland etc abide by the same rules).
Yes, if you're not a tiny business (OP isn't tiny) you have to pay VAT to each end customer's country. Though you can declare it in your home country to reduce bureaucracy.
VAT law is well developed, what matters is the location of the end customer, not where the seller is, so your technically speaking isn't how it works.
Wrong, if they buy from US Amazon, they pay VAT at EU customs entry (unless customs misses it or it's below threshold of some 40 EUR or so).
Is it enforced? Yes. Do they catch everyone who cheats? No. Do you want to break the law? Better not.
EEA might demand their citizens to pay the VAT, but how can it demand/enforce this e.g. for some company in Vietnam? What happens when EEAians buy goods in Vietnam with EEA bank's credit cards, e.g. in a not-tiny restaurant? Is the VAT cancelled because they are physically in Vietnam for the time being?
Good question and I had to Google the answer. Until now enforcement was apparently lackluster but EU is tightening up: "As of January 2024, Payment Service Providers (PSPs) have a new role in tackling VAT fraud. They need to report cross border payments to CESOP (the Central Electronic System of Payment Information), a large digital hub. This disclosure is specifically for the purpose of combating tax fraud. It’s focused on business activity, doesn’t record payment reasons, and has strong privacy restrictions." https://www.paddle.com/blog/eu-vat-compliance-for-us-softwar...
I have been in this situation but selling to the States. Nothing happens if you sell to end users who pay with credit card but as soon as you have a large sale to a company or institution they will ask for all kinds of documents that force you to register properly and pay taxes.
Your client will ask you for a document (can't remember the details) and to get it you have to register with the IRS. If you pay taxes or not, I'm not sure, the sale was too small and I just dropped the client.
EU, I suppose. What happens when you collect VAT from EU customers? Do you have to transfer to each of EU countries? Is it enforced somehow? What if you don't collect VAT at all? Technically speaking, EU customers buy stuff on your site, not in EU. E.g. they also buy stuff from US Amazon.com and don't pay any VAT. Especially for digital goods - there is no need for an EU delivery address.