Payments
VAT
Also known as Value Added Tax
VAT, or Value Added Tax, is a consumption tax charged at each stage of production and distribution, used across the EU, UK and many other countries. Businesses selling digital services to consumers in VAT jurisdictions may be required to register and charge VAT regardless of where they are established.
In plain terms: Europe's version of sales tax, which can apply to you even from a US company.
Why it matters
A US entity does not exempt you. Digital-services rules in many jurisdictions look at where the customer is, not where the seller is incorporated — which is the strongest argument for using a merchant of record if you sell to consumers internationally.
Common misunderstanding
Assuming a US company means no VAT obligations. Customer location frequently governs.
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