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The rules apply to digital products AND services (e.g. memberships, cloud storage ...). You'd need to physically ship something to avoid the rules, but then, other burdens (import/export/customs/taxes) come in place.

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What if, and I'm just thinking out loud here, the digital product (software) was free but you had to receive an activation code (by snail mail) to use it?

Terrible user experience for sure, but under what taxation would this fall?

I have read 'masters of doom' last night and I can't believe we used to ship around 'installation disks wrapped in ziploc bags', but maybe it's time to get back to that? j/k

Grey area IMO and different EU tax authorities may have differing views, just to make things more complicated.

you also have to pay VAT on physical products when you import them. When I receive a package from the US, I have to pay VAT and customs fees on delivery (unless the sender declares it as a "present", but that's illegal)

There is usually a threshold under which no VAT is levied (different for each country however).

There aren't any of those. That's pretty much the point of the EU.

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