Updated on 20.10.2022

VAT for EU businesses

Enter billing VAT number

The value-added tax is an assessment of the incremental increase in the value of a product or service. It is designed to tax the value added by a business on top of the services and goods purchased from the market.

The EU has standard rules on VAT but they are applied differently in each country in the EU. VAT must normally be paid on all goods and services, up to and including the sale to the final consumer. This can also include each stage of a production process from buying components, assembly, and shipping to the final sale.

Manual payments

At UpCloud, VAT is paid when adding balance to your account according to the rules of your country. The taxation percentage will depend on your country of residence. VAT does not apply to users from outside the EU.

EU businesses and VAT

The value-added tax is chargeable on most sales and purchases within the European Union for EU-based companies. The tax is collected fractionally through the production of goods and services via a system of partial payments by each party adding value to the final product.

VAT-registered businesses deduct the amount of tax they have paid to other businesses on purchases for their business activities from the VAT they collect. This taxation process can be simplified by excluding VAT from sales to other EU businesses.

If you sell products or services in the EU and are registered for VAT, you can have VAT excluded from your payments. Businesses who register a VAT identification number on their UpCloud account will receive zero-rate VAT. They are then responsible for paying VAT in their own country through reverse charges.

Adding your VAT identification number

If your business has registered for VAT, you are eligible for VAT-free purchases. You can add your valid VAT identification number to your UpCloud account billing details to exclude VAT in the payments.

Note that UpCloud is registered as a Finnish company and sales from Finnish to Finnish company is considered as domestic sales. In domestic sales, VAT is charged according to Finnish laws.

Begin by going to your account section in the control panel.

In the billing contact details, you can find the field for the VAT number. Select your country code from the list, then enter your VAT identification number in the next text field.

Enter billing VAT number

When done, click the Save changes button at the bottom of the page to confirm.

You can then verify that the VAT number was successfully added by going to the Billing page at your control panel.

Manual payment with no VAT

The amount to be charged will then show the price excluding VAT.

Janne Ruostemaa

  1. Victoria Businesswomen

    Good afternoon! Thanks for the information. I study the tax system and VAT rates of different countries. I can use the data from your article in my work.

    Reply
  2. Thanks for the information I found it very helpful for Tax calculations :)

    Reply

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