International tax laws require us to apply local taxes (like VAT or GST) on digital services to customers in many countries, including both EU and some non-EU countries. These rules are designed so that overseas companies don’t have an unfair advantage over local businesses.
If you're an EU-based company, under the EU VAT Directive (Council Directive 2006/112/EC, Articles 44–59), VAT on digital services is due where the customer is located, not where the seller is based. This applies to all “electronically supplied services” (software, SaaS, digital content, etc.). Since 2015, the “place of supply” rules mean that if you, as an EU resident, buy digital services from any company worldwide, VAT is charged at your local rate. Non-EU businesses must register for VAT and collect VAT on sales to EU consumers, then remit it to EU tax authorities.
If you are a VAT-registered business, you may be able to reclaim the VAT paid on this purchase through your local tax authority, in accordance with your country’s VAT refund procedures. We recommend consulting your accountant or tax advisor for specific guidance on reclaiming VAT.
Reference: European Commission: VAT on digital services