The Digital Services VAT/GST Return

For businesses selling digital products internationally, filing VAT/GST returns is a crucial part of maintaining compliance with tax regulations. Understanding what needs to be reported, when to start filing, and the kind of data required will ensure your business stays on track with its obligations.

What is reported on the return?

When filing a digital services VAT/GST return, the specific requirements may vary by country. However, for digital products, most countries allow for a simplified return. Typically, you will be required to report the following:

• Taxable sales amount: The total sales of digital products in the given jurisdiction.

• Output VAT payable: The VAT/GST amount you are required to remit to the tax authorities, based on your sales in that jurisdiction.

This simplified return process makes it easier to manage your tax reporting obligations while ensuring compliance.

From when do I have to start reporting?

This will vary country by country, especially if there are registration thresholds to be observed (you can find out more about this topic in this article). You should closely monitor your sales thresholds in each country where you sell, and once the registration process is complete and successful, the relevant Tax Authorities will determine your effective date of registration. With this information, you will be able to confirm if you have any retroactive filing obligation, if you start filing for the current period, or if you will only have to file for a future date.

What kind of data do I need to report?

The data you need to report depends on how you manage your VAT/GST compliance. If you are a Stripe Tax customer utilizing the Taxually app, your transaction data will be automatically extracted, significantly simplifying the reporting process.

However, if you are not using the Taxually app on Stripe, our platform integrates with most marketplaces - you can reach out to our team and we will assist you with the integrations. 

You can also manually report all transactions related to digital products sold in jurisdictions where you are required to file. In this case, you will use the template file available in your Taxually account under the Data Upload section. The file should include details on all sales, including:

• Transaction dates

• Sales amounts

• VAT/GST amounts

• Jurisdictions where the sales were made

• In countries where B2B obligations exist, we might require the VAT numbers of your B2B customers to be reported in the VAT return, allowing the Tax Authority to confirm the validity of these customers. 

Having accurate and complete data is essential to ensure your VAT/GST filings are correct and compliant.

Filing digital services VAT/GST returns involves understanding the specific requirements of each jurisdiction, knowing when you need to start reporting, and ensuring you have the right data. By using Taxually’s products, much of this process is automated, allowing you to focus on growing your business while staying compliant. If you’re managing VAT/GST returns manually, ensure all your data is accurate and up-to-date to avoid any filing issues.