Digital services suppliers get one-stop EU VAT service
9 Jun 2014 01:05 PM
Businesses supplying
digital services across the European Union will be able to use a one-stop VAT
service from January.
This will mean that the
businesses - including those supplying broadcasting, telecoms and e-services
such as smartphone games and other apps - will not have to pay the tax
separately in each country where they do business.
Businesses affected 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.
From 1 January next year, the
place of supply – and therefore the place of taxation – for
business-to-consumer suppliers of digital services will change to the place
where the customer who receives the service lives or is
located.
So that UK businesses supplying
digital services do not have to register forVAT in
every EU member state where they have customers, an
optional VATMini One Stop Shop online service
– VAT MOSS – has been set up by HM Revenue and
Customs (HMRC). Other EU member states will be building their own
systems.
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.
Between 27,000 and 42,000 UK
businesses are expected to register with the service, most of them
small-to-medium-sized enterprises (SMEs).
These changes, under
the EU VAT directive, must be implemented by member states
before the end of 2014. The UK implementing legislation is contained in the
2014 Finance Bill.
Businesses will be able to
register for VAT MOSS from October 2014. The service will be
available to use from 1 January 2015.