Cross-Border VAT Compliance for Gibraltar Digital Services: B2B vs B2C Risks and Audit Defences

• Gibraltar is a global hub for e-commerce, FinTech, DLT, and Remote Gaming, thriving on innovation and regulatory clarity.
• Despite Gibraltar not having VAT, digital service providers must comply with cross-border VAT rules in the EEA and UK.
• Correctly classifying customers as B2B or B2C is crucial: B2B sales use the reverse charge mechanism, making the customer responsible for VAT; B2C sales make the supplier liable for VAT in the customer’s country.
• Failure to prove a customer is a business can result in unexpected VAT liabilities, penalties, and mandatory foreign VAT registration.
• The article explains minimum compliance requirements, the “Two-Item Rule” for audit defense, and differences between EU/EEA and UK VAT regimes for non-established suppliers.

Source: ramparts.gi

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.

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