VAT on European clients for services sold from UAE or USA

[mdmo]

Hello guys,

I was reading that for services sold to European clients (from a UAE or USA company) VAT should be applied and paid in the destination country (whre the individual / business client is).

Do you know anything about this and if true how to avoid?

Thanks.

 

[Houdini]

If you clients are business clients with a VAT number, you can simple put "reverse charge on VAT" on the invoice, so you don't need to charge VAT.

Otherwise if it is to end customers you may apply the local VAT rate, I'm not sure for Dubai @Fred may be able to clarify.

As I can read the USA has different VAT rates, you need to speak with a accounting firm to figure out which VAT applies.

The combined rates generally rang range between 5.5 percent and 10 percent. Sales and use taxes are generally defined as transaction taxes which are charged on sales to retail purchasers, end users, or consumers of certain tangible personal property and specific enumerated services
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[mdmo]

I was checking this thread How to avoid VAT in EU from the 1st 2024 but apparently no one came to a final answer.

In case the service is provided by a human who is working from UAE for example, still the VAT should be applied in the destination country? Or this VAT rule applies only in case the service is automatic (like an antivirus) where there is a delivery without a human control?

 

[Houdini]

VAT applies to everything you sell online if applicable. It doesn't matter how the sale is generated.