Place of supply rules Q&A
Big changes to the VAT place of supply rules for businesses supplying digital services came into effect from 1 January 2015. Currently these supplies are taxed in the Member State in which the business is established. However, the place of supply will be determined by the location of the customer who receives the service. This change will mean that businesses who supply these services will be required to register for VAT in every EU Member State where they have customers.
To save the need for businesses affected by these changes to register for VAT in other Member States, a Mini One Stop Shop (MOSS) has also been introduced from 1 January 2015. The MOSS scheme is an electronic system that will allow businesses to register in only one EU member state and submit a single VAT return and payment each quarter for all their cross border supplies of digital services.
HMRC recently held a Twitter Q & A on 27 November and have published a blog post listing with answers to some 50 common questions divided into the following categories:
- What is a digital service?
- Why no minimum threshold on cross-border digital supplies?
- Sales via third-party platforms
- VAT Registration and MOSS
- Evidence of customer’s location
- Admin / keeping records
- Enforcement & Compliance
- Additional Help
- What is meant by minimal human intervention?