Do I Need to Charge VAT to a Customer in Another Country?

This is the most common question in cross-border VAT, and the answer hinges on five things: where you are registered, where the customer is, whether the customer is a business or a consumer, what you are selling, and whether the country you are selling into has a non-resident VAT scheme. Walk through those five and you have your answer for any transaction.

Below is the decision tree, with the actual rules each branch resolves to. The examples assume you are a non-resident supplier (you do not have a permanent establishment in the customer's country); if you do have one, the local rules of that country apply directly.

Step 1: Where are you VAT-registered?

If you are VAT-registered in your home country and not registered anywhere else, that registration only obliges you to charge VAT on supplies that fall under that country's rules. It does not stop foreign countries from imposing their own VAT obligations on your sales into them. Two separate questions: am I obliged to charge home-country VAT, and am I obliged to register and charge foreign VAT.

Step 2: Where is the customer?

VAT is destination-based for most cross-border supplies. The country where the customer "consumes" the supply is the country with taxing rights. For physical goods this is usually the delivery address. For digital services it is the customer's location, evidenced by two non-contradictory pieces of information (billing address, IP address, bank country, SIM country). See our guide on customer location evidence.

Step 3: Is the customer a business (B2B) or a consumer (B2C)?

This is the single biggest fork in the decision tree.

B2B: the customer accounts for VAT, you usually don't charge

If your customer is a business in another country and they give you a valid VAT number, in most cases you do not charge VAT. The customer accounts for it under the reverse charge in their country. Your invoice carries a "reverse charge" narrative and shows zero VAT.

This works in:

• All 27 EU Member States (Article 44 + Article 196 of the VAT Directive)
• The United Kingdom (general place of supply rule, B2B services)
• Switzerland, Norway, Iceland (similar reverse charge frameworks)
• Australia, New Zealand, Singapore, Canada (each implements it as zero-rating or out-of-scope, not technically reverse charge, but the practical effect is the same)
• UAE, Saudi Arabia, Bahrain, Oman (Article 48 reverse charge)

The catch: you must have evidence the customer is a registered business. That means a valid VAT number, validated against the local authority. For EU customers that is VIES; for the UK, HMRC's API; for Norway, Brønnøysund; for Australia, the ABR. Without a valid number, you treat the customer as B2C and charge VAT.

B2C: you usually charge VAT, often after registering in the customer's country

If your customer is a consumer (no VAT number) in another country, the rule for most digital services and an increasing number of goods is: register in the customer's country (or via a simplification scheme) and charge their VAT rate.

This is the regime in 60+ countries today, including all of the EU (via the OSS scheme), the UK, Norway, Switzerland, Iceland, Australia, New Zealand, Canada, Japan, Korea, Singapore, India, Malaysia, Indonesia, Vietnam, Thailand, the Philippines, Taiwan, the UAE, Saudi Arabia, Bahrain, Oman, Egypt, Turkey, South Africa, Kenya, Nigeria, Ghana, Tanzania, Uganda, Zambia, Zimbabwe, Mexico, Chile, Argentina, Brazil, Colombia, Costa Rica, Ecuador, Peru, Uruguay, Bolivia, Paraguay, the Bahamas, Barbados, and several more.

Each country has its own threshold. Below the threshold you do not register. Above it you must. The full table is in our 2026 thresholds guide.

Step 4: What are you selling?

The rules diverge for digital services, professional services, physical goods, and a handful of special categories.

Digital services (SaaS, downloadable software, streaming, e-books, online courses, hosting)

• B2B cross-border: Reverse charge. Do not charge VAT. Get the customer's VAT number and put the narrative on the invoice.
• B2C cross-border: Register in the customer's country (or use a scheme like EU OSS), charge their rate, file local returns.

Professional services (consulting, legal, accounting, marketing)

• B2B cross-border: Same as digital services, reverse charge.
• B2C cross-border: The general rule is taxable where the supplier is established (your home VAT applies). But there are exceptions: services connected to immovable property, passenger transport, restaurant and catering, hire of means of transport, and admission to events follow the location of the activity.

Physical goods (B2C)

• EU intra-Community: If you are EU-established and selling to consumers in other Member States, you charge the destination country's VAT once you cross the €10,000 EU-wide threshold (Article 33). Below it, you charge home-country VAT.
• Imports into the EU: The IOSS scheme covers consignments under €150. Above €150 the customer pays import VAT and customs.
• UK imports: Goods under £135 are subject to UK VAT charged by the seller at the point of sale (you must register). Above £135 the customer pays import VAT.

Goods sold via marketplaces (Amazon, eBay, Etsy)

Many jurisdictions now make the marketplace the deemed supplier. The marketplace charges and remits VAT, not you. EU IOSS, UK section 5A FA 1994, Australia GST low-value goods rules, New Zealand. Check whether your sales channel is collecting on your behalf before assuming you owe.

Step 5: Does the destination country have a non-resident VAT scheme?

For B2C, your obligation to register only exists if the country has a non-resident VAT scheme that applies to your transaction. Most do for digital services. Fewer do for physical goods (those typically rely on import VAT instead). A handful of countries have no non-resident scheme at all and you cannot register even if you wanted to (Hong Kong, the Cayman Islands, the BVI: no VAT exists).

The countries you are most likely to hit first as a non-resident SaaS or digital seller, ranked by typical revenue exposure:

1. European Union (single OSS registration covers all 27)
2. United Kingdom
3. Australia
4. Canada
5. Japan
6. Singapore
7. South Africa
8. Mexico
9. Turkey
10. Norway
11. Switzerland
12. UAE

The simple decision tree

To answer "do I charge VAT?" for a single transaction:

1. Customer is in your VAT country: yes, charge home VAT.
2. Customer is in another country and is a business with a valid VAT number: no, do not charge. Reverse charge applies.
3. Customer is in another country and is a consumer (no VAT number) and you are above the registration threshold there: yes, register and charge their VAT.
4. Customer is in another country and is a consumer and you are below the threshold or there is no scheme: no, do not charge VAT, but you may need to monitor as you grow.
5. You are selling goods rather than services: import VAT and customs may apply, often paid by the customer or collected by a marketplace.

How to find out where you stand right now

The fastest way to see whether you have crossed any thresholds: upload your transaction data (or sync Stripe) to our free VAT Exposure Dashboard. It maps every transaction to the right country, classifies B2B versus B2C, and flags every jurisdiction where you have crossed a registration threshold. No account needed.

For the underlying rates by country, see the worldwide VAT/GST/sales tax chart. To validate B2B customer numbers (the gating step for skipping VAT on B2B sales), use the tax ID validator.

Worked examples

1. UK SaaS company sells a $50/month subscription to a German consumer

B2C cross-border digital service. Once you cross the German B2C threshold (effectively zero for non-EU sellers post-Brexit), register for UK to EU OSS through the EU Non-Union OSS, charge German VAT (19%), file quarterly OSS returns to one Member State.

2. UK SaaS company sells the same subscription to a German GmbH with a valid VAT number

B2B cross-border digital service. No VAT charged. Invoice carries "Reverse charge: VAT to be accounted for by the recipient under Article 196 of Council Directive 2006/112/EC". The GmbH self-assesses German VAT and recovers it as input VAT.

3. US SaaS company sells to a Canadian consumer in Ontario

B2C cross-border. If you have crossed C$30,000 in 12 months across all Canadian B2C sales, register for the simplified GST/HST regime, charge 13% HST in Ontario (5% GST + 8% PST handled separately in some provinces). Below the threshold, no obligation.

4. US SaaS company sells to a Canadian business with a valid GST/HST number

B2B cross-border. The Canadian business self-assesses under section 218 of the Excise Tax Act. You charge no Canadian tax. Note the simplified non-resident regime in Canada specifically does not allow the registered foreign supplier to charge B2B; B2B falls back to self-assessment.

5. EU SaaS company sells to a UK consumer

B2C cross-border post-Brexit. Register for UK VAT (no threshold for non-resident digital services), charge 20% UK VAT, file UK VAT returns.

6. EU SaaS company sells to a UK business with a valid UK VAT number

B2B cross-border. UK reverse charge. The UK business self-assesses; you charge no VAT.

What to do next

Three concrete steps:

1. Run your sales through the Exposure Dashboard to see where you have already crossed thresholds. This is usually the most uncomfortable step and the most useful.
2. Validate every B2B customer's tax ID. Without a valid number you cannot apply reverse charge; you must charge VAT.
3. For each country above the threshold, register (or join the EU OSS) and start charging the local rate from the date of registration. Backdating the obligation is the bigger problem; back-tax accumulates from the day you crossed.