# VAT updates January 2025

{% hint style="info" %}
We’re updating our VAT (Value Added Tax) policy for customers in compliance with the One-Stop Shop (OSS) system, **starting January 2025**. These changes aim to align with EU VAT regulations and ensure accurate tax calculations for our customers. Below, you’ll find a summary of the new VAT rules and how they affect your invoices.
{% endhint %}

## **What’s changing?**

Currently, if a customer in the EU (but outside Spain) does not provide a valid VAT number, we charge Spain’s VAT rate of 21%. From January 2025, this will no longer be the case. Instead:

1. **EU Customers Without a Valid VAT Number**\
   We will charge VAT based on the VAT rate of the customer’s country of residence.
   * **Example 1**: A customer from Germany without a VAT number will be charged **19% VAT** (Germany’s current rate).
   * **Example 2**: A customer from Austria without a VAT number will be charged **20% VAT** (Austria’s current rate).
2. **EU Customers With a Valid VAT Number**\
   If a customer provides a valid VAT number, no VAT will be charged on the invoice.
3. **Customers in Spain**\
   VAT remains unchanged at **21%** for all customers in Spain, except for those located in exceptional territories (e.g., Canary Islands, Ceuta, Melilla).
4. **Customers Outside the EU**\
   No VAT will be charged for customers outside of the EU (e.g., United States, Mexico, Australia).

***

## **What does this mean for you?**

If you are a customer based in the EU, please ensure that your VAT number is valid and up-to-date. You can check the validity of your VAT number using the [official EU VAT validation tool](https://ec.europa.eu/taxation_customs/vies/#/vat-validation).

If no valid VAT number is provided, we will apply the VAT rate of your country of residence to your invoice.

***

#### **New VAT Charging Policy Summary**

| **Customer Location**         | **VAT Application**                                                                           |
| ----------------------------- | --------------------------------------------------------------------------------------------- |
| EU (without valid VAT number) | VAT charged at the rate of the customer’s country. Example: 19% for Germany, 20% for Austria. |
| EU (with valid VAT number)    | 0% VAT.                                                                                       |
| Spain                         | 21% VAT (excluding Canary Islands, Ceuta, Melilla).                                           |
| Outside the EU                | 0% VAT.                                                                                       |

***

## **Why are we making this change?**

These changes comply with the EU’s OSS system, which requires businesses to charge VAT based on the “destination principle.” This means VAT is calculated according to the rate in the customer’s country of residence, ensuring fair and consistent tax application across EU member states.

***

## **How to prepare for these changes**

1. **Verify Your VAT Number**\
   If you are a professional or company in the EU, provide a valid VAT number to ensure you are not charged VAT.
   * Use the [EU VAT validation tool](https://ec.europa.eu/taxation_customs/vies/#/vat-validation) to confirm your VAT number.
2. **Understand Your Local VAT Rate**\
   Familiarize yourself with the VAT rate in your country to anticipate the changes on your invoices.

***

For additional questions or concerns about the new VAT policy, feel free to contact our support team at <support@wildmail.io>.


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