EU Digital Seller Compliance Checklist

If you're an EU-based individual selling ebooks, templates, prompt packs, or any other digital product through Gumroad, Lemon Squeezy, or a similar platform, you'll hit the same handful of questions everyone hits in the first week: what business status do I need, does VAT apply to me, why is Stripe asking for my ID, and how do I actually get paid. This checklist is the map of those questions - not a substitute for an accountant, but the list of things worth having an answer to before you're surprised by one of them.

Why this exists

Most guides either assume you already run a registered business, or they talk about physical products, where the rules are different. Digital products - a PDF, a template, a piece of software - are treated differently under EU VAT law than a physical item you ship, and almost nobody explains that clearly for a single person selling their first $5 ebook.

1. Figure out your legal selling status first

• Decide whether you're selling as a private individual, a registered sole trader ("živnostník" in Slovakia, similar concepts elsewhere in the EU), or a company - this decision usually has to be made before your payment processor will pay you anything.
• Most payment processors (Stripe, and Gumroad which uses Stripe under the hood) support an "Individual" account type in addition to company/sole trader/non-profit - if you only saw those three options, look again, it's often there but easy to miss.
• Whether occasional personal sales legally require a registered trade license in your country depends on your country's specific rules around frequency and volume of sales - this is not something a generic checklist can answer correctly for you. Confirm with your country's tax authority or an accountant before relying on "Individual" as a long-term answer, not just a way to get through signup.

2. Understand that digital products have their own VAT rules

• Unlike physical goods, EU VAT law has no minimum sales threshold for digital services sold to consumers - in principle, even one sale can create a VAT question, and which country's VAT rate applies depends on where your customer is, not where you are.
• There is a EUR 10,000 per year cross-border threshold for EU-based sellers: below it, you can generally just charge your home country's VAT rate on all your EU sales; above it, you're expected to charge each customer's local VAT rate and report it, usually through the EU's OSS (One Stop Shop) scheme so you don't have to register in every country separately.
• A newer EU-wide small business VAT exemption scheme (introduced in 2025) may let very small cross-border sellers stay VAT-exempt below a higher combined threshold - but the exact numbers and conditions change and vary by country, so verify the current figures rather than trusting any specific number you read anywhere, including here.
• Marketplaces like Gumroad may already handle some or all of this VAT collection and remittance for you as the "deemed supplier" under EU rules - check your specific platform's own documentation on this before assuming you need to register for anything yourself.

3. Expect identity verification - it's not optional or unusual

• Payment processors are legally required to verify who they're sending money to (KYC - "know your customer"). Expect to upload a government ID and possibly a proof of address at some point before your first payout.
• Only ever upload identity documents directly into your payment processor's own official site - never to a third party, and never paste ID numbers or document images into a chat, email, or anywhere else "to save time."
• Payouts are typically sent to a bank account, sometimes to a debit card depending on your country - have your IBAN ready before you start this step so you're not hunting for it mid-form.

4. Know what a customer might legally need from you

• Some business buyers (not casual individual customers) may ask you for a proper invoice, sometimes with a VAT number on it, for their own accounting. Decide in advance whether you're equipped to provide one.
• Keep basic records of your sales regardless of your status - most countries require you to be able to show your income history if asked, even for modest side income.

A short summary checklist

• Chosen a legal selling status (individual / sole trader / company) and confirmed it's actually allowed for how often you plan to sell
• Checked whether your home country requires a trade license for occasional personal digital sales
• Understood that digital products follow destination-based VAT rules, not your home country's rules by default, once you're above the cross-border threshold
• Checked whether your selling platform already handles VAT for you
• Confirmed what your specific payment processor needs for identity verification before you need the money
• Have your bank account/IBAN ready for payouts
• Decided whether you can produce a proper invoice if a business customer asks for one

This is an orientation checklist, not tax or legal advice - rules differ by country and change over time. Use it to know which questions to bring to an accountant or your national tax authority, not as a final answer to any of them.

Where to go deeper

• Your national tax authority's own website (for Slovakia: financnasprava.sk) is the authoritative source for your specific obligations - always more current than any third-party guide.
• The European Commission's own pages on VAT for digital services explain the OSS scheme directly from the regulator, not a summary of it.
• Your payment processor's own help center (Stripe, Gumroad) documents exactly what they require for verification and payouts, since that's platform-specific and changes over time.