Selling Digital Services Abroad: Indirect Tax and Cross-border Data

Overview

Digital services can be sold without a local entity, but many countries require non-resident digital suppliers to register for VAT / GST, and regulate cross-border transfers of personal data.

Key concepts

• B2B vs B2C: business customers often self-account (reverse charge); for consumers, non-resident suppliers frequently must register.
• Thresholds: some countries set turnover thresholds for non-resident suppliers.
• Personal data protection laws: rules on collecting, using and transferring personal data.
• Data localisation: certain sectors or data types may need local storage.

Steps

1. Split B2B and B2C revenue by country.
2. Check each country’s registration rules and thresholds for foreign digital services.
3. Map data types, storage locations and cross-border transfers.
4. Update privacy policy, terms and data processing agreements.
5. Review payment channels, currencies and conversion.
6. For products involving encryption or AI models, check export controls.

Documents

• Revenue by country
• Data inventory and data-flow map
• Privacy policy and terms

Common limitations

• Regulated services (finance, health, telecoms) may need local licences.
• Some countries restrict cross-border transfer of certain data types.

Practical notes

Not tax or legal advice. Indirect tax rates are in Compare · Taxation.

Official resources

Tax authority links are in each handbook’s Taxation and Official Resources chapters.