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If your services do not require your intervention, which means that they are automated (for example, a web application that you have developed or the download of an eBook), these rules must be applied:

If your customer is a European B2B (a company) with a valid VAT number, you do not add VAT (0%). Instead, you add a clause to your invoice like this: "The purchase is liable to Intra-Community supply 0%, Reverse charge."

If your client is European B2B or B2C (individual or company) and does not have a VAT number, you add the VAT of your country of origin to the invoice, If it’s a Spanish customer, that would be 21%.

If your client is outside Europe, you do not add VAT or VAT(0%).

When your product is sold to individuals and they download it automatically, without human intervention, it falls under the category of "digital downloads".

As it would be unfeasible to pay the VAT collected to the countries of each of your clients, a scheme called OSS was created. Thanks to this scheme, you only declare the VAT charged to all your European customers to the Estonian authorities.

Then, once a quarter, the Estonian government asks you to pay the total amount of VAT collected during that quarter, which is distributed to each European country. In this way, companies save time and money.

Therefore, if you offer digital downloads, you need to register with the OSS (One Stop Shop) scheme, specifying which of your products fall into that category, and make quarterly VAT or VAT declarations.

If you are a Companio customer, you have to inform us of this before requesting the documentation and signing the IOSS declaration.

Keep in mind that if your sales do not exceed 10,000 euros per year, you are exempt from being part of the OSS. Therefore, our recommendation is that until you exceed €10,000 per year in any country, do not register with the OSS and charge your customers Estonian VAT (20%).

You can find the link to the European regulations here.
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