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Tax Compliance for International B2B SaaS Businesses 

B2B SaaS business can rely on reverse charge rules rather than filing returns in many countries but are not completely free from tax compliance obligations.

In most VAT and GST regimes, when businesses are charged the tax by their suppliers they can claim this as a credit against the VAT or GST they owe and often can even get a refund.  This has resulted in a lot of cross border fraud, particularly of VAT in Europe.  As a consequence, and to simplify the operation of the tax suppliers are often not expected to charge VAT/GST on cross border B2B supplies.  This applies to SaaS sales as well.  But its not that straight forward….

B2B SaaS Businesses 

SaaS sales to US business customers

Sales tax in the US operates at the state level.  That means each state gets to determine their own sales tax rates and rules for when sales tax applies.  To make matters worse, taxes are also applied at local levels within states meaning there are over 12,000 different taxing jurisdictions in the US.

One positive note for SaaS businesses is that not all of the 45 US states that have a sales tax have determined SaaS services to be taxable.  ITS can help you navigate both the sales tax rules and also the solutions for automating sales tax rate calculation and return filing.


B2B SaaS sales to UK and EU Customers

The non-union EU One Stop Shop (OSS) regime simplifies VAT compliance across the EU.  Rather than registering in each of the 27 EU member states the OSS return

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