We report and pay digital EU & UK VAT

We assume full responsibility for complying with these laws so you don't have to. Focus on your business instead.

What is digital EU/UK VAT?

In 2015, the EU introduced the digital VAT law which requires that all sellers who sell digital products to customers based in the EU should charge VAT.

It doesn't matter if you're based in the US or any other non-EU country, if you're selling a digital product to an EU customer then VAT needs to be applied. In 2020, the UK also introduced a similar law.

How does Payhip help?

Dealing with the digital EU & UK VAT laws are an administrative and legal nightmare. However, Payhip can take this burden off your shoulders and take on full responsibility for complying with these laws. If your customer is buying a digital product in the EU/UK we act as your reseller which means we're 100% responsible for digital EU/UK VAT.

  • We detect if a customer is based in the EU or UK
  • Apply the correct VAT amount to their transaction based on the tax rate of their country
  • Each quarter we report and submit any VAT amounts collected to the relevant tax authorities

What about other taxes?

If you need to apply other types of taxes to your transactions then we can absolutely help you collect this. You can choose which countries/states to apply taxes to - and exactly which tax rates to apply.

We detect if a customer falls under the tax rules you've defined, and apply the correct tax amount to their transaction. This tax amount is then sent to you and you can report and pay the relevant authorities. A monthly sales report is created for you to make tax reporting dead simple.

When EU VAT came into effect in 2015, I found out with very short notice. After doing a lot of searching and head scratching, I settled upon using Payhip for the embroidery patterns I sell. The main reason was that they take care of the EU VAT reporting for me, so I don’t have to deal with that as a small business. After I started using Payhip I was really impressed with how simple and quick it is to use, both adding products and sharing them on my own site. As well as an integrated shopping basket and that you can sell different types of products (downloads, courses, physical items) it is just a pleasure to use. And the customer service has been absolutely excellent!

Carina Envoldsen-Harris — Embroidery designer & author

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