My understanding is it is to remove the loophole of companies being based in a country where VAT is lower then selling to consumers - where they need to charge VAT - and the total cost is lower.
Apple sells all apps through its Luxemburg subsidiary, meaning Luxemburg's low 15% VAT rate applied.
On the buyer side, am I right to assume that as a VAT-registered company/freelancer I will be able to deduct VAT paid on apps purchased through the App Store?
Also countries want to collect the VAT on digital purchases their citizens make. That is understandable, I suppose. The implications looks like a potential nightmare for small businesses though.
