- AI-powered platforms are transforming digital product sales, requiring compliance with EU VAT rules.
- AI-generated tools sold in the EU are often classified as digital services, subject to VAT.
- Digital services are defined as automated services delivered online with minimal human intervention.
- Examples of digital services include AI image generators, chatbots, and self-service AI platforms.
- Non-digital services include one-on-one AI consulting and custom AI projects.
- Sellers must determine the place of supply to apply the correct VAT rate based on the buyer’s location.
- For B2C sales, local VAT must be charged based on the customer’s country.
- Sellers can register for VAT in each country or use the One-Stop Shop for EU sales.
- For B2B sales, the reverse charge mechanism often applies, requiring proper record-keeping.
Source: hellotax.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
Latest Posts in "European Union"
- CEN Approves Revised EN 16931: A Milestone for ViDA Implementation
- Successful Implementation of VAT in the Digital Age (ViDA) Discussed with Commissioner Hoekstra
- General Court T-638/24 (D GmbH) – AG Opinion – VAT on Intra-Community Acquisitions Not Precluded by Errors
- Commission Backs Italy’s VAT Derogation on certain vehicles Through 2028
- Comments on GC T‑575/24 – AG – Contrary to EU law if services provided to members are regarded as internal acts
