The EU imposes VAT on SaaS and software sales, applying a customer-location rule for both B2B and B2C transactions. SaaS sellers must collect VAT IDs, validate them via VIES, and apply the reverse charge for B2B sales to VAT-registered buyers.
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Key Takeaways
From 1 January 2015, the EU extended the customer-location rule to B2C electronically supplied services.
In the EU, for B2B SaaS sales to a VAT-registered buyer with a valid VAT ID, the reverse charge mechanism applies, meaning the buyer declares and remits VAT.
SaaS sellers in the EU should collect VAT IDs at checkout and validate them via VIES to ensure compliance.
Article 7(1) of the EU VAT Implementing Regulation defines electronically supplied services.
Primary source
Read the full article at NumeralThis summary was published on VATfaqs.com on 12 July 2026. It relates to VAT developments in European Union. The original source is Numeral.
