Let’s say you’re a EU based company that has sold a digital product priced at €25.
Your invoices should have VAT included (€25 + VAT based on customer location) when:
Your customer lives in your country.
Your customer lives in another EU country and doesn’t have a VAT number.
Your invoices should have VAT exempted when:
Your customer lives in another EU country and does have a VAT number.
Your customer lives outside EU.
If your business stays below €10,000 in cross-border sales of digital goods per year, throughout the EU, then you can charge the VAT rate of your home country on all those cross-border sales, keeping your tax scheme simple.
The taxes of a digital product have to be applied in a exclusive way, othwerwise you’re assuming dynamic pricing based on customer location.
B2C and B2B have different implications in terms of VAT.