VAT – Mini One Stop Shop
From 1 January 2015 changes will come into effect for businesses supplying digital services such as broadcasting, telecoms and e-services. Currently these supplies are taxed in the Member State in which the business is established. However, from 2015, 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 not have 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) will be introduced. The MOSS scheme will allow businesses affected by the changes to avoid registering for VAT in every EU Member State where they make supplies.
The MOSS will be 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. Businesses will be able to register for VAT MOSS from October 2014 and the service will be available from 1 January 2015. The use of the MOSS will be optional.
Businesses affected by the changes will include those selling apps (including smartphone games), e-books, streaming services (of sports/ film/ tv/ music), radio broadcasting, dating services and journals, newspapers and magazines that are subscribed to electronically.
There will be two schemes, one for businesses established within the EU and one for businesses that are not established in the EU. For EU businesses the submission of an MOSS return would be an additional responsibility on top of their regular domestic VAT return. The current VAT on e-Services (VoES) scheme for non-EU businesses will be replaced by the MOSS and existing VoES users may transfer to the new scheme.
Sally Beggs, Deputy Director Indirect Tax, HMRC, said:
‘The VAT MOSS is a tool that saves digital services suppliers from having to register for VAT in every member state in which they sell such services. Businesses with their main operation or headquarters in the UK will register with HMRC to use the service. They can register for the online service and then authorise an agent to act on their behalf.’