I plan to set up shop for shopify and sell digital products. I have a question about VAT and its settlement. When I get a customer who lives in eg Canada where VAT is at 5% how to account for such a tax? I know that there is MOSS in the European Union and just make a declaration. Problems also do not come when VAT is 0% as in the United States. Does anyone know how to settle for countries outside of the EU and have a fixed VAT of more than 0%?
I am not sure where your business is located but you should know that:
If you aren’t a Canadian business, then you don’t have to charge any Canadian tax.
Only if you have a Canadian business, you have to charge Canadian taxes. This article might help you: https://quaderno.io/blog/sales-tax-101-canadian-startups/
Have a look and let me know if you have any questions. Happy to help!
Thank you for your answer. I live in Poland. When I called Polish institution dealing with VAT. They suggested that I have to contact each country separately to find out what rules are in place in each country. This is very hard to accomplish because I do not know other foreign languages than English language and I do not know what institutions I have to call.
Don’t worry. We all know topics related to taxes can be super confusing.
In your case, you only need to charge digital taxes on your sales to EU customers.
You have more info at https://quaderno.io/blog/what-you-must-know-about-vat-if-you-have-customers-in-europe/