EU VAT, UK VAT and AU/NZ GST for Digital Products on Your Own Stripe

Sam Bakker · Founder, gocushy · July 16, 2026

This is not tax or legal advice. Rules, rates and thresholds change, and your situation is specific to you. Please talk to your accountant before relying on anything here.

Cross-border tax is the part of selling digital products everyone postpones. It sounds like it needs a compliance department, so creators either ignore it (risky), or hand their whole business to a merchant of record just to make the problem go away (expensive, and they own your customers).

The truth is the system is more learnable than it looks. Almost everything reduces to three questions: where does the tax apply, is the sale B2C or B2B, and what does the paperwork have to say. Let's take them in order — then look at what it takes to actually implement this on your own Stripe account.

The one rule that explains everything: destination

For digital products — courses, templates, software, memberships — the EU, UK, Australia and New Zealand all use a destination rule for consumer sales. The tax that applies is the tax of the buyer's country, at that country's rate, regardless of where you're based. A course sold from Auckland to a consumer in Berlin is, for VAT purposes, a German sale.

That's why "I'm not in the EU, so EU VAT doesn't apply to me" is one of the most common — and most wrong — assumptions in this space. These regimes were explicitly designed to reach overseas sellers of digital services (Australia's version was nicknamed the "Netflix tax" for a reason).

So do I have to register everywhere?

You register where required — and where that is depends on thresholds that vary by jurisdiction. As of this writing, in broad strokes:

• EU: overseas sellers of digital services to EU consumers generally have no minimum threshold — the obligation can start with the first B2C sale. The saving grace is the One Stop Shop (OSS): one registration covers B2C digital sales into every member state.
• UK: post-Brexit, the UK is its own regime, separate from the EU's OSS. Overseas sellers of digital services to UK consumers generally need to register with HMRC without a minimum threshold.
• Australia: overseas sellers register for GST once sales to Australian consumers pass the registration turnover threshold (AUD 75,000 a year, as of this writing).
• New Zealand: remote sellers register once sales to NZ consumers pass NZD 60,000 a year, as of this writing.

Thresholds and rules change — confirm the current numbers with your accountant before acting on them.

B2C vs B2B: two different games

Everything above concerns B2C — sales to consumers. Sell the same product to a business, and the logic often flips: instead of you charging and remitting the buyer's local tax, responsibility for the tax shifts to the buyer. That's why a serious checkout needs a business tax-ID field, not just a country selector.

The EU reverse charge, in plain English

When an EU business buys a digital product from a seller in another country and provides a valid VAT ID, the supply is normally reverse-charged: you charge 0% VAT, and the buyer self-accounts for VAT in their own country. Three things make it valid in practice:

1. The VAT ID checks out. The EU runs a validation service called VIES; validating the ID (and keeping evidence that you did) is what protects you if the number turns out to be bogus.
2. The invoice says so. EU invoicing rules require the words "reverse charge" on the invoice, along with both parties' VAT IDs.
3. You keep the records. Buyer country evidence and the validated ID are what you show if anyone ever asks why a sale was zero-rated.

The UK works similarly for cross-border B2B services: a UK business customer generally accounts for the VAT itself under reverse-charge rules, and your invoice should reflect that.

Australia and New Zealand: GST and the "tax invoice"

Australia's GST is 10%; New Zealand's is 15%. Both regimes focus their remote-seller rules on consumers: if an Australian business gives you its ABN and states it's GST-registered, or a New Zealand GST-registered business identifies itself, you generally don't charge GST on that sale, as of this writing.

For the sales you do tax, the paperwork matters. Australian buyers expect a document headed "Tax Invoice" (required wording for taxable sales above a small amount), showing your identity, your ABN/GST registration, the date, a description, and the GST amount or a statement that it's included. New Zealand modernised its rules — the required record is now formally called "taxable supply information" — but a properly headed tax invoice with your GST number still does the job, and it's still what business buyers ask for.

Why sequential invoice numbers matter

This one surprises people. Most VAT and GST regimes require invoices to be issued with sequential numbering — an unbroken series, per seller. The point is auditability: if your invoices run 1041, 1042, 1044, an auditor's first question is what happened to 1043. Random IDs, or numbers that reset whenever a tool feels like it, are exactly the kind of thing that turns a routine review into a long one.

It's also why bolting invoices on later is painful: the sequence has to be issued at sale time, survive refunds and subscription renewals, and match what lands in your accounting system.

Stripe Tax on your own registrations

Here's the good news: you don't need a merchant of record to get correct tax calculation. Stripe Tax runs on your own Stripe account against the registrations you hold — you add your OSS, UK, AU or NZ registrations in Stripe, and it works out the right rate for each buyer. You remain the seller; you (or your accountant) file the returns.

What Stripe Tax alone doesn't give a funnel seller is the machinery around it: a checkout that captures and validates a business tax ID, reverse-charge invoices with the right wording, tax applied consistently to order bumps and one-click upsells (which add line items mid-flow and after payment), sequential numbering, and books that reconcile. That layer is where gocushy comes in.

How gocushy implements each piece

gocushy runs on your own Stripe and uses Stripe Tax on your registrations — then builds the compliance layer around it:

• Buyer country drives the rate at checkout — the buyer's country sets which tax applies, and the total updates accordingly.
• Business tax-ID field on checkout. EU VAT IDs are validated against VIES; a valid ID triggers the B2B reverse charge automatically.
• NZ/AU GST handled natively — including the "Tax Invoice" heading NZ and AU buyers expect on the hosted invoice page.
• Tax on upsells. Order bumps and one-click post-purchase upsells are taxed with the same country and tax-ID logic as the main offer.
• Compliant invoices: sequential per-merchant numbers, reverse-charge wording where it applies, a hosted invoice page with print/save-to-PDF, linked from every receipt. Subscription renewals generate their own orders, invoices and receipts automatically.
• Xero sync: connect via OAuth and every paid order — renewals included — auto-files as an authorised invoice with line items, tax, and numbers that match your checkout. Accounting-grade CSV export covers everything else.

And because all of this is agent-operable over MCP, your AI can set up the offer while the tax machinery comes along for free — see the docs for the merchant view, or the developer docs for the API and webhook detail.

When a merchant of record is the better choice

An honest comparison: if you want zero tax registrations in your name, a merchant of record (Lemon Squeezy, Paddle and similar) genuinely delivers that. They resell your product as the legal seller, so tax registration, filing and remittance are their problem, not yours. That's a real service, and for some sellers — especially those allergic to any filing obligation at all — it's the right call.

The trade-offs are structural: the MoR is the seller of record, so the customer relationship and the funds flow through them, and their fee model reflects the liability they're absorbing — typically a percentage on top of underlying processing costs. If you're building a durable business on your own Stripe, with your own customer list and funnel mechanics, the own-registrations path usually pays for itself. We've written up the full trade-off in merchant of record vs your own Stripe.

Traditional cart tools sit somewhere in the middle — they'll take an order, but the tax and invoicing depth varies widely. If you're weighing those up, our ThriveCart alternative breakdown covers where funnel carts help and where they stop.

Frequently asked questions

Ready sooner? You can create your account and connect your own Stripe today — the tax fields, reverse charge and invoices are on by default.

One more time, because it matters: nothing on this page is tax or legal advice. Registration thresholds, rates and invoicing rules change and depend on your circumstances — run your setup past your accountant.