> As a non-EU entity I legally can not collect VAT on behalf of EU customers because I have no way of paying that tax on their behalf.
That’s not how this works. You are required to collect VAT and use the MOSS system to pay it quarterly.
That’s not how this works. You are required to collect VAT and use the MOSS system to pay it quarterly.
Even if by some chance you are a small business that for an inexplicable reason does fall under this you can get out of this scheme fairly easily (VAT exemption rules apply) and more importantly VAT can be handled by a proxy e.g. a payment processor.
For businesses there is no VAT collection at all and all businesses must pay reverse VAT when purchasing (or providing) services from (and to) outside of the EU regardless if they fall under TBES or not.
This means that most businesses it's not an issue since you can have a turn over of a few 100,000 EUR spread across the EU without being required for registration.
This is also solved via your payment processors and what would you know the EU also offers you the infrastructure to register where is the one stop shop for GDPR?
You also must provide a service that is qualified for VAT since it doesn't cover all non-tangible goods e.g. anything that is actually produced by a human but is delivered digitally like professional services.