TLDR: Freelancers providing digital services to non-taxable customers in the EU must apply specific VAT territoriality rules. They can benefit from the EU OSS or non-EU OSS schemes, depending on their place of establishment. B2B services follow the general rule that VAT is due in the customer's EU Member State. B2C services are taxed in the customer's Member State of consumption.
OSS Schemes for Freelancers
Freelancers established in the EU can opt for the EU OSS scheme, simplifying VAT declaration and payment in a single Member State. Freelancers not established in the EU must use the non-EU OSS scheme, declaring VAT in the customer's Member State of consumption.
VAT Territoriality
For digital services provided to end consumers (B2C), the place of taxation is the Member State where the customer is established, has their permanent address, or usually resides. For B2B services, VAT is due in the customer's Member State if the customer is VAT-registered.
Declaration Obligations
VAT returns for EU OSS and non-EU OSS schemes must be submitted electronically, even if no taxable transactions have occurred. Returns must include:
- VAT identification number
- Total net value of services per Member State of consumption
- Total VAT amount
Digital Services Covered
Digital services are subject to VAT in the customer's Member State of consumption.
Exceptions and Limitations
- Freelancers not established in the EU cannot use the EU OSS scheme, only the non-EU OSS scheme.
- Digital services provided to non-EU customers are not subject to EU VAT.
Intermediaries
If a freelancer uses an intermediary (e.g., a platform) acting in its own name, the intermediary is considered the direct supplier of digital services and must comply with VAT obligations.
For informational purposes only. Does not constitute personalized tax advice.