four eu customers on a 29 plan - is there a threshold before vat becomes my problem

The 10,000 threshold is the source of most of the confusion here and it is not yours. It is an EU-wide threshold for businesses established in the EU selling cross-border to consumers in other member states - under it they can keep charging their home country rate, over it they charge the customer's rate.

A business established outside the EU supplying digital services to EU consumers does not get that threshold. The obligation starts at the first sale to a consumer, at the VAT rate of the country that consumer is in.

The simplification for someone in your position is the non-Union one stop shop: you register in a single member state of your choosing, charge each consumer their own country's rate, and file one quarterly return through that portal covering all of them rather than registering in each country separately.

Your two customers with valid VAT numbers are a different case. Business to business inside the EU is normally handled by reverse charge - you do not charge VAT, the customer accounts for it. But you have to validate the number rather than trust the form, keep evidence that you did, and put the right note on the invoice. An invalid number that you accepted at face value leaves the VAT with you.

Do the maths for your actual size rather than for the size you hope to be.

Merchant of record: roughly 5% plus a fixed fee per transaction on the base plans across the well known ones, one of them discounts the percentage if you pay a monthly platform fee. On 1,400 a year of EU revenue that is somewhere around 90 to 100 including the fixed fees, but note it applies to all your revenue, not just the EU part, unless you split providers.

Doing it yourself: card processing you are already paying, a tax calculation add-on charged as a percentage on top, plus registration and quarterly filings. The filings are where the money goes - the fee itself is small but somebody has to prepare and submit four returns a year, and that somebody is either you on a Sunday or an accountant charging real money.

At four EU customers the merchant of record is cheaper than one hour of an accountant's time. At 500 customers the percentage becomes a serious line item and doing it properly wins. The mistake is not picking wrong now, it is not knowing where your own crossover point is.

Everyone over-rotates on this at four customers. The honest practical answer is that you will either use a merchant of record or you will not, and either way you must not build tax logic yourself. Rate tables change, thresholds change, evidence requirements change, and none of that is your product.

What I would actually do this week: keep selling, switch the plan to a merchant of record, and spend the saved evenings on getting to forty customers. Just do not tell yourself you are compliant when you are only postponing.

Moved to a merchant of record last year, here is what visibly changed for customers, because I had not thought about most of it beforehand.

The seller on the receipt is the platform, not me, with their entity name and address. Their name shows on the card statement, which generated a few what is this emails in month one until I added a line about it in the welcome email. Refunds go through them so I lost the ability to just click refund in my own dashboard. Invoices got better - they generate proper ones with tax breakdown and a VAT number field the customer can fill in themselves, which killed a whole category of support requests.

On balance a clear win at my size, but it is a real change to the customer relationship rather than a plumbing swap.

No threshold for you, first sale creates the obligation, non-Union OSS is the simplification, and reverse charge only counts if you validate the number and keep the proof. Use a merchant of record until it hurts.

Since you will hit it eventually: the US works on a completely different principle. There is no national registration, each state has its own economic nexus rule, and the common pattern is around 100,000 of sales into that state or a couple of hundred transactions, with several of the bigger states using higher figures.

The trap is that crossing a threshold and owing tax are separate questions. Nexus means you may have to register there. Whether your product is taxable at all varies by state - software delivered as a service is taxable in some and not in others. So the answer to do I owe sales tax in the US is genuinely it depends on which state, and that is exactly the kind of question a merchant of record exists to absorb.