Taxation on Supplies of Digital Services in the EU – VAT MOSS

Effective 01 January 2015:

If you are based in the UK and supply digital services such as e-books and software to consumers in the EU, VAT will be payable in the consumer’s country, not in the UK, and it will be charged at the rate that applies in the consumer’s country.

To fulfil your obligations, you can either:

1. register for VAT in each and every EU country you supply services to

OR

2. register to use the new VAT Mini One Stop Shop (VAT MOSS) service.

VAT MOSS is clearly a better option as it allows you to account for the VAT due on B2C sales to other EU countries by submitting just one quarterly return and payment to HM Revenue and Customs (HMRC). HMRC then corresponds with the other countries on your behalf.

Note:

If you want the VAT MOSS option, you must register for the service by the 10th day of the month that follows your first digital services supply.

If you are late by even a day, registration will begin at the start of the next quarter and you will have to account for the missed period’s VAT by registering in all countries that services were supplied to.

More details can be found here.

If you are affected by the above and need help making sense of it all, get in touch with us. The initial chat is free.

[Latest notification – 10 Dec 2014]