The government has laid two Treasury orders making changes to the rules for businesses making supplies of digital services to consumers across the EU from 1 January 2019.
The Value Added Tax (Place of Supply of Services) (Supplies of Electronic, Telecommunication and Broadcasting Services) Order, SI 2018/1194, introduces a €10,000 (£8,818) threshold into the place of supply rules for businesses making sales of digital services from 1 January. Businesses whose total sales of digital services across the EU do not exceed this threshold in the current and preceding year may apply the VAT rules of their home country, rather than those of the country where their customers are located.
The Value Added Tax (Special Accounting Schemes) (Supplies of Electronic, Telecommunication and Broadcasting Services) Order, SI 2018/1197, allows VAT-registered non-EU businesses making supplies of digital services to customers in the EU to join the ‘non-union’ VAT MOSS scheme from 1 January. Under current rules, businesses established outside the EU, who are VAT-registered for reasons other than supplies of digital services, are not permitted to use the scheme.
HMRC consulted on draft versions of both orders during September and October 2018. This legislation implements in the UK an EU directive agreed in December 2017 to simplify the rules on cross-border online sales for micro-businesses and SMEs.
The government has laid two Treasury orders making changes to the rules for businesses making supplies of digital services to consumers across the EU from 1 January 2019.
The Value Added Tax (Place of Supply of Services) (Supplies of Electronic, Telecommunication and Broadcasting Services) Order, SI 2018/1194, introduces a €10,000 (£8,818) threshold into the place of supply rules for businesses making sales of digital services from 1 January. Businesses whose total sales of digital services across the EU do not exceed this threshold in the current and preceding year may apply the VAT rules of their home country, rather than those of the country where their customers are located.
The Value Added Tax (Special Accounting Schemes) (Supplies of Electronic, Telecommunication and Broadcasting Services) Order, SI 2018/1197, allows VAT-registered non-EU businesses making supplies of digital services to customers in the EU to join the ‘non-union’ VAT MOSS scheme from 1 January. Under current rules, businesses established outside the EU, who are VAT-registered for reasons other than supplies of digital services, are not permitted to use the scheme.
HMRC consulted on draft versions of both orders during September and October 2018. This legislation implements in the UK an EU directive agreed in December 2017 to simplify the rules on cross-border online sales for micro-businesses and SMEs.
