digital services VAT

Digital Services VAT refers to the tax applied to digital products and services, like streaming, software, and online subscriptions, sold within the European Union. When a business sells digital services to customers in an EU country, it must add a VAT rate based on where the customer is located, not where the company is based. This ensures fair taxation across borders. Businesses can often handle this through the VAT MOSS system, simplifying how they declare and pay such taxes. Essentially, it's a way to ensure digital sales are taxed appropriately within each country, aligning with local tax laws.