Changes to the VAT place of supply rules and the introduction of the VAT Mini One Stop Shop (MOSS)

What is happening?

For businesses supplying digital services such as broadcasting, telecommunications and e-services, on 1 January 2015, changes will be made to the European Union (EU) VAT place of supply of services rules involving business to consumer (B2C) supplies.

The place of taxation for digital services supplies is currently determined by your location as the supplier of the services but from 1 January 2015, the place of taxation will be determined by the location of the consumer.


Will your business be affected?

Because there are no registration limits for digital service supplies made to consumers outside the UK, these changes will affect all businesses that supply digital services to consumers, whether or not they are registered for UK VAT. Any business supplying digital services to a consumer in another Member State therefore has to charge VAT on the supply in that Member State and register for VAT in that Member State.

If you supply digital services to businesses only (including those who are self employed) then these changes do not affect you.

If you supply digital services to a mix of businesses and consumers, then these changes affect you as far as the supplies to consumers are concerned.


What is MOSS?

In summary, MOSS is an electronic system that will allow businesses the option of registering in one EU jurisdiction and accounting for VAT due in other Member States using a single return. The MOSS scheme will allow businesses affected by the changes to avoid registering for VAT in every EU Member State where they make supplies therefore cutting out an administration nightmare.


What you need to do?

HMRC guidance can be found here!! If you think that these changes affect you then please review the information in the link for more comprehensive details of the MOSS system and contact us to discuss it.