I sell digital products online to overseas consumers. Are there special rules around foreign VAT?
If you sell digital products to EU consumers, and these require nil/minimal human intervention, you need to register for VAT in each EU country where the customers are based. The simplest way to do this is to join the UK VAT Mini One Stop Shop (MOSS) which will register for you. Google ‘HMRC VAT MOSS’ to find out more.
Under MOSS, you must charge foreign VAT on affected sales (different EU nations have different VAT rates), file a MOSS return every calendar quarter, and pay over any foreign VAT, charged by you, to HMRC. For small numbers of such sales, you could potentially avoid the issue by adding a human intervention to the sales process, for instance making a follow-up call. This then makes it a UK sale, rather than an EU sale, so you can then just charge UK VAT.