US SaaS Companies: A Global Guide to VAT/GST on B2C Sales

If you run a US-based SaaS company selling subscriptions to individual consumers around the world, you almost certainly have tax obligations you may not know about. Over 60 countries now require foreign digital service providers to collect and remit VAT or GST on B2C sales. This guide covers where you owe tax, how much, and what you need to do about it.

Why this matters for US SaaS companies specifically

The United States does not have a federal VAT or GST. This means most US SaaS founders have no instinct for indirect tax compliance — it simply does not exist in their domestic experience. But the rest of the world runs on consumption taxes, and most countries have now extended those taxes to cover digital services sold by foreign businesses to local consumers.

The key concept: when you sell a SaaS subscription to a consumer in another country, you are typically responsible for charging and remitting VAT/GST at that country's rate. This is not the customer's problem. It is yours.

The global picture: where you owe tax

Here is a summary of the major jurisdictions where a US SaaS company selling B2C subscriptions has VAT/GST obligations. The pattern is consistent: SaaS is classified as a digital or electronically supplied service, and B2C sales are taxed at the customer's location.

This is not exhaustive. Countries including Taiwan, Indonesia, Malaysia, Chile, Colombia, Mexico, Kenya, Nigeria, Tanzania, and Turkey also tax cross-border digital services. The trend is accelerating — new countries adopt these rules every year.

European Union: one registration covers 27 countries

The EU is typically the largest non-US market for SaaS companies, and the rules here are well-established. SaaS is classified as an electronically supplied service (ESS) under the EU VAT Directive. For B2C sales, VAT is charged at the rate of the customer's country (Article 58).

The good news: you do not need to register in all 27 member states. The Non-Union One Stop Shop (OSS) lets you register in a single EU country and file one quarterly return covering all your EU B2C sales. Ireland and the Netherlands are popular choices. The OSS authority distributes the collected VAT to each member state.

You must determine each customer's location using two pieces of non-contradictory evidence: billing address, IP geolocation, bank country, or SIM card country. Below EUR 100,000 in annual cross-border B2C digital sales, a single piece of evidence is sufficient.

For a detailed walkthrough, see our EU OSS scheme guide.

United Kingdom: separate registration required

Post-Brexit, the UK operates independently from the EU VAT system. There is no equivalent of the OSS for non-UK businesses — you must register directly with HMRC. The standard rate is 20%, and there is no registration threshold for non-established businesses supplying digital services to UK consumers.

This means that even a single B2C SaaS subscription sold to a UK consumer creates a UK VAT registration obligation. Filing is quarterly.

Australia: simplified GST for digital imports

Australia requires non-resident suppliers of digital services to register for GST if their Australian B2C sales exceed AUD 75,000 per year. The rate is 10%.

The ATO offers a simplified GST registration for non-resident digital service providers (available since July 2017). This is easier than a standard registration but does not allow you to claim input tax credits. Filing is quarterly via the Business Activity Statement (BAS).

Canada: federal GST plus provincial taxes

Canada introduced a simplified GST/HST registration for non-resident digital economy businesses on July 1, 2021. If your Canadian B2C sales exceed CAD 30,000 in any 12-month period, you must register.

The tax structure is more complex than most countries because of provincial variations:

Under the simplified registration, you collect and remit the GST/HST. However, Quebec and Saskatchewan have separate registration requirements: Quebec requires a separate QST registration with Revenu Québec for non-resident digital service providers, and Saskatchewan requires PST registration for digital services. These are not covered by the federal simplified registration. Filing is annual or quarterly depending on revenue.

Japan: consumption tax with platform rules

Japan charges 10% consumption tax (JCT) on digital services supplied to Japanese consumers by non-resident businesses. The registration threshold is JPY 10 million in taxable sales during the base period (generally two years prior).

A significant change took effect in April 2025: the Platform Taxation system shifts liability to Specified Platform Operators (SPOs) when their B2C digital sales exceed JPY 5 billion annually. If you sell through a qualifying platform (e.g., a major app store), the platform handles the consumption tax. If you sell directly, you must register independently (a tax agent for correspondence may be required, though this is less onerous than a full fiscal representative).

Singapore: overseas vendor registration

Singapore requires non-resident digital service providers to register under the Overseas Vendor Registration (OVR) regime if they meet a dual threshold:

• Global turnover exceeds SGD 1 million, AND
• B2C digital sales to Singapore exceed SGD 100,000

The GST rate is 9% (increased from 8% on January 1, 2024). Filing is quarterly.

India: OIDAR services with no threshold

India classifies SaaS as an OIDAR service (Online Information and Database Access or Retrieval). For B2C sales, the non-resident supplier bears full GST liability at 18% with no registration threshold — you owe tax from the first rupee.

You must register on the GST portal using the simplified online registration process (no physical local representative is required, unlike Switzerland). Invoices must identify the state of each recipient. Filing is monthly or quarterly depending on revenue.

South Korea: simplified registration

South Korea charges 10% VAT on digital services supplied by foreign businesses to Korean consumers. There is no registration threshold for non-resident suppliers. Registration is through a simplified process with the National Tax Service, and filing is quarterly.

If you sell through a marketplace that collects payment on your behalf, the marketplace assumes the VAT obligation.

Norway and Switzerland

Norway

Norway is not an EU member but has its own VAT rules for digital services. The rate is 25%, and the registration threshold for non-resident suppliers is NOK 50,000 per year. Norway offers a simplified VOEC (VAT on E-Commerce) scheme with quarterly filing.

Switzerland

Switzerland charges 8.1% VAT (since January 2024). Registration is required when worldwide turnover exceeds CHF 100,000. Non-resident businesses must appoint a fiscal representative. Filing is quarterly or semi-annual.

Middle East: Saudi Arabia and UAE

Saudi Arabia charges 15% VAT on digital services with no threshold for non-resident e-service providers. Registration is through ZATCA (the tax authority). UAE charges 5% VAT, also with no threshold for non-resident digital service providers. Both require quarterly filing.

Practical example: a US SaaS company at $500K ARR

The registration decision framework

Not every country requires action immediately. Use this framework to prioritize:

1. No-threshold countries first. If you have any B2C revenue in the EU, UK, India, South Korea, Saudi Arabia, or UAE, you technically owe tax from the first transaction. Prioritize by revenue volume.
2. Threshold countries next. Track your revenue against thresholds in Australia (AUD 75K), Canada (CAD 30K), Norway (NOK 50K), Singapore (SGD 100K local), Switzerland (CHF 100K global), and Japan (JPY 10M).
3. Marketplace sales. If you sell through app stores or platforms, check whether the platform handles tax collection. Apple, Google, and major marketplaces often remit VAT/GST on your behalf in many jurisdictions.
4. Enforcement risk. Some countries actively enforce digital tax obligations (EU, UK, Australia). Others have rules on the books but limited enforcement against small foreign sellers. Compliance is always the right approach, but enforcement reality can inform your sequencing.

What you need to get right

Customer location

You must determine where each customer is located. Most jurisdictions accept billing address as the primary indicator. The EU specifically requires two pieces of evidence (billing address, IP, bank country, SIM country) — or one piece if your annual cross-border B2C digital sales are below EUR 100,000.

B2B vs B2C identification

This is the single most consequential classification. B2B sales typically trigger a reverse charge (no VAT from you). B2C sales require you to charge and remit VAT. Getting this wrong means either overcharging business customers or failing to collect tax from consumers. At minimum, collect and validate tax ID numbers at checkout. See our B2B vs B2C guide.

Currency and rates

VAT/GST must be calculated and reported in the local currency of each jurisdiction. If you bill in USD, you need an exchange rate for each transaction. Most countries accept the European Central Bank rate or the local central bank rate on the date of supply.

Invoicing requirements

Each jurisdiction has specific invoice requirements. The EU requires your OSS VAT number, the applicable rate, the VAT amount, and the customer's country. The UK requires a UK VAT number. India requires state-level identification. Build invoicing that adapts to each jurisdiction's requirements.

Common mistakes

• Ignoring VAT because you are a US company. Your incorporation location is irrelevant. If your customer is in the EU, UK, or any country with digital services tax rules, you have obligations there.
• Assuming Stripe or your payment processor handles VAT. Payment processors collect payments. They do not calculate, charge, or remit VAT on your behalf (unless you use a specific merchant-of-record service like Paddle or Lemon Squeezy).
• Applying one VAT rate globally. Each country — and in some cases each province — has its own rate. There is no single "international VAT rate."
• Not distinguishing B2B from B2C. If you do not collect tax IDs at checkout, you cannot apply the reverse charge and must treat all sales as B2C, meaning you owe VAT on every transaction.
• Waiting until you are "big enough." Many jurisdictions have no threshold. Legal obligation exists from the first sale. Back taxes, interest, and penalties accumulate.

Frequently asked questions

Do US SaaS companies need to charge VAT on international B2C sales?

Yes. Over 60 countries require foreign digital service providers to collect and remit VAT or GST on B2C sales. The US does not have a federal VAT, but countries where your customers are located impose their own consumption tax obligations on you.

How many VAT registrations does a US SaaS company need?

It depends on where your customers are. The EU allows one registration via the Non-Union OSS covering all 27 member states. Other countries each require separate registration. A typical mid-size SaaS company may need 4-8 registrations.

Is there a minimum revenue threshold before I need to register?

It varies. The EU, UK, India, South Korea, Saudi Arabia, and UAE have no threshold for non-resident digital service sellers. Australia (AUD 75K), Canada (CAD 30K), Norway (NOK 50K), and Singapore (SGD 100K local) have thresholds.

Does Stripe handle VAT collection for me?

No. Stripe is a payment processor, not a merchant of record. Stripe Tax can calculate tax amounts, but it does not register you for VAT, file returns, or remit VAT. See our VAT for Stripe Users guide.