We're pleased to announce that our Easy Digital Downloads EU VAT plugin now fully supports UK VAT. This means that your UK customers can have their VAT reverse charged, just like people in the EU.
Whatever your views on Brexit, no one is claiming that it was an easy process. While most of the news focussed on the political changes, fewer people are aware of its impact on VAT for businesses selling digital products.
If you sell digital products (such as WordPress plugins, downloadable music or eBooks) to customers in the EU, then you should be aware that you must charge VAT based on the customer's location - even if your company isn't based in the EU.
For example, if you're a US company selling eBooks to customers in Germany, then you must charge them German VAT. The only exception is if they are a business with a German VAT number, in which case you can validate this and reverse charge their VAT.
What happened after Brexit
Since it was launched in 2019, our Easy Digital Downloads EU VAT plugin has made things easy for websites that use EDD to sell digital products. It automatically charges the correct VAT to each customer, while allowing EU businesses to enter their VAT number and have their VAT reverse charged.
When the UK was part of the European Union, UK customers could validate their VAT numbers using the EU's central VIES database. However, Brexit meant that this was no longer possible.
After the Brexit transition period ended on 31st December 2020, UK businesses could no longer validate their VAT numbers using the European database. You could still charge them the correct rate of VAT, but there was no option to have their VAT reverse charged.
At the time, the UK was developing its own VAT number database but this was still in its infancy. In the last few weeks, it has improved this system in a way that we can integrate with.
We have now released a new version of the Easy Digital Downloads EU VAT plugin which works with the new database.
What has changed in the plugin?
The plugin now fully supports UK VAT, as well as continuing to support EU VAT. The new version has the following changes:
- Support for UK VAT numbersWhen a customer enters their country on the EDD checkout, the plugin will display a VAT number field as follows:
- EU customers - the VAT number field will continue to appear, allowing them to validate their VAT number with the European VIES database.
- UK customers - the VAT number field will now appear, allowing them to validate their VAT number with the UK's VAT database.
- Customers in other countries - the field will remain hidden.
- Display the store's UK VAT numberUntil now, the plugin had a field where EDD store owners could enter their European VAT number and have this displayed on invoices. Now, there's a new field where you can add your company's UK VAT number too. The plugin will display both VAT numbers on invoices, helping you to provide valid VAT invoices to customers in all locations.
Where to get the plugin
If you're already using Easy Digital Downloads EU VAT then you can update to the new version from the WordPress dashboard.
If not, then install the plugin and start meeting EU and UK VAT rules today!