VAT Mini One Stop Shop (MOSS)

From 01 January 2015 the VAT rules across Europe changed for businesses which provide digital services to private customers in the EU which are supplied electronically.

Prior to the change a supplier of digital services would account for VAT at the rate of where the supplier is established. Now, a supplier has to account for VAT at the rate of the EU member state where the customer is based. This means that a UK business providing digital services to private customers in Spain would have to account for Spanish VAT.

Digital Services include broadcasting, telecommunications and e-services. For example videos on demand, online apps, downloading music, gaming, e books etc. The key point to consider is where the digital sale is automated with very little or no human involvement in completing the sale.

There are two ways in which HMRC has advised a business can approach this issue:

  1. To register for VAT in each EU member state where supplies are provided and submit separate VAT returns for each state.
  2. To register for the MOSS scheme in the EU member state where the business is based.

The MOSS scheme allows a UK business to submit a single online return and make just one payment in respect of their EU supplies to HMRC. HMRC then pay the relevant member state based upon the data submitted.

If you are unsure of whether your supplies are digital services that would be caught by these changes please don’t hesitate to contact our VAT Advisors.