What Are Digital Services for VAT Purposes?
Digital services have specific VAT rules that differ from traditional services. Understanding the definition is crucial for compliance.
Digital Services Include
Software & Apps
SaaS platforms, mobile apps, cloud software, licenses
Digital Content
E-books, music, videos, games, online courses
Web Services
Website development, hosting, domain registration
Online Platforms
Marketplaces, advertising platforms, subscription services
Digital Training
Online courses, webinars, e-learning platforms
NOT Digital Services
Traditional Consulting
Business advice, strategy consulting (even if delivered online)
Professional Services
Legal advice, accounting, architectural services
Physical Goods
Software sold on physical media, printed materials
Telecommunications
Phone services, internet access provision
Educational Services
Formal education, tutoring (personal instruction)
Digital Services Place of Supply Rules
Where you charge VAT depends on your customer type and location. Rules differ for B2B vs B2C transactions.
B2B Digital Services
EU Business Customers
- • Reverse charge applies (0% VAT in Ireland)
- • Customer pays VAT in their country
- • Must validate customer's VAT number
- • Invoice must state "Reverse charge applies"
- • Include in monthly EC Sales List
Non-EU Business Customers
- • Zero-rated (0% VAT) as export
- • Evidence of business status required
- • No EU VAT obligations
B2C Digital Services
EU Consumer Customers
- • VAT charged at customer's country rate
- • Must register for OSS or country-specific VAT
- • Need 2 pieces of location evidence
- • From first €1 of sales (no threshold)
Irish Consumer Customers
- • Charge 23% Irish VAT
- • Standard VAT registration thresholds apply
- • €42,500 threshold for services
One Stop Shop (OSS) Registration
OSS simplifies VAT compliance for digital services to EU consumers from a single registration.
When You Need OSS Registration
Mandatory Registration
- • Selling digital services to EU consumers
- • From the first €1 of sales (no threshold)
- • Customer located in another EU country
- • Including free trials that convert to paid
Optional Registration
- • Planning to sell to EU consumers
- • Want simplified compliance
- • Selling to both Irish and EU customers
- • Freemium models with potential conversions
OSS Registration Process
Apply Through ROS
Submit OSS application via Revenue Online Service with business details and projected EU sales
Receive OSS Number
Get unique OSS identification number starting with "IM" for Ireland
Setup Customer Location Detection
Implement systems to identify customer location and apply correct VAT rates
Submit Quarterly OSS Returns
File quarterly returns by 31st of month following quarter end
Customer Location Evidence
Required Evidence (2 pieces)
- • Billing address
- • IP address location
- • Bank account country
- • Country of mobile number
- • Payment card issuing country
- • Location of fixed landline
Conflicting Evidence
- • Use billing address if available
- • Otherwise use IP address location
- • Document decision-making process
- • Keep evidence for 10 years
EU Digital Services VAT Rates (2025)
Standard VAT rates for digital services across EU member states.
Western Europe
Northern Europe
Southern & Eastern
Automate Digital Services VAT Compliance
PayVat handles complex digital services VAT rules automatically for Irish businesses.
Automated Compliance
- Real-time customer location detection
- Automatic VAT rate calculation by country
- B2B reverse charge validation
- OSS registration and returns
Evidence & Documentation
- Automatic location evidence collection
- Compliant invoice generation
- 10-year audit trail storage
- Quarterly OSS return preparation
Ready to Simplify Digital Services VAT Compliance?
Trusted by Irish digital businesses for automated EU VAT compliance.
Automated OSS compliance • Real-time VAT calculation • Audit-ready documentation