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I think I have VAT obligations, what now?

Many countries have implemented VAT on digital services. And we can be sure that many more are likely to follow suit. Unfortunately, many digitally-focused startups and small and medium-sized businesses are unaware of their VAT obligations. That’s a real problem, because unexpected penalties can be a real shock to the bottom line.

Therefore, if you believe your business may have a VAT obligation, you need to act fast. Even accidental non-compliance can result in severe penalties and disruptions to business continuity. 

Fortunately, digital businesses can outsource their digital services VAT compliance. As a result, they can focus on their core businesses instead of trying to navigate uncharted territory. 

The obligation to register for VAT

If you provide digital services to customers in a country where your business is not resident, there’s a good chance you are obliged to register for VAT in that country.

While, if you provide digital services to customers in multiple countries (and, given the nature of digital services, you likely do) then you probably have multiple obligations to register for VAT.

This may seem daunting. And the reality is that meeting local VAT compliance requirements is complex. All requisite information needs to be provided on time and in the prescribed format. In addition, you may even have to communicate with the local tax office in an unfamiliar language. 

Moreover, some countries may require you to appoint an agent to manage VAT filing and compliance on your behalf. 

For these reasons, many digital services businesses will need to rely on professionals to manage their VAT compliance obligations. 

One agent or two? Or more?

In response to the fast-changing digital services VAT requirements, businesses may decide to appoint a VAT agent in each jurisdiction in which they have an obligation.

However, liaising with several people, while managing multiple VAT filing deadlines is time-consuming, clumsy, and highly prone to human error. 

On a conceptual level, there’s another big problem. How do you know which jurisdictions you have obligations in? Further, how do you stay ahead of regulatory changes? After all, more countries are introducing digital services VAT, or changing the terms of their digital services VAT, all the time.

Optimally, a digital services provider will want a single point of contact that provides expert advice and can manage the business’s VAT in every country in which they have an obligation.

A digital VAT solution for digital services companies

Vatglobal provides a single point of contact for global VAT compliance. Moreover, our powerful proprietary technology that supports out team makes our world class service scalable and cost-effective. 

Get in touch with Vatglobal to get full clarity on all your VAT obligations and secure an elegant solution to all your VAT compliance needs.


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