Two changes to the operation of the VAT mini one-stop-shop (VAT MOSS) for supplies of digital services will take effect from 1 January 2019. These changes implement the first part of a package agreed by the EU in December 2017 aimed at improving cross-border e-commerce rules and tackling VAT fraud.
The two changes are:
Businesses for which total supplies of digital services across the EU fall below a threshold of €10,000 (£8,818) 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. Businesses with a total taxable turnover below the UK VAT registration threshold will be able to de-register from VAT.
Non-EU businesses (non-established taxable persons) already registered for VAT will be allowed to use the ‘non-union’ VAT MOSS scheme to account for VAT on sales of digital services to EU member states.
HMRC has published two draft orders for consultation until 8 October:
the Value Added Tax (Place of Supply of Services) (Supplies of Electronic, Telecommunication and Broadcasting Services) Order 2018, introducing a €10,000 threshold into the place of supply rules for VAT for businesses making sales of digital services; and
the Value Added Tax (Special Accounting Schemes) (Supplies of Electronic, Telecommunication and Broadcasting Services) Order 2018, introducing legislation to allow all non-established taxable persons making supplies of digital services to customers in the EU to join the ‘non-union’ VAT MOSS scheme.
Two changes to the operation of the VAT mini one-stop-shop (VAT MOSS) for supplies of digital services will take effect from 1 January 2019. These changes implement the first part of a package agreed by the EU in December 2017 aimed at improving cross-border e-commerce rules and tackling VAT fraud.
The two changes are:
Businesses for which total supplies of digital services across the EU fall below a threshold of €10,000 (£8,818) 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. Businesses with a total taxable turnover below the UK VAT registration threshold will be able to de-register from VAT.
Non-EU businesses (non-established taxable persons) already registered for VAT will be allowed to use the ‘non-union’ VAT MOSS scheme to account for VAT on sales of digital services to EU member states.
HMRC has published two draft orders for consultation until 8 October:
the Value Added Tax (Place of Supply of Services) (Supplies of Electronic, Telecommunication and Broadcasting Services) Order 2018, introducing a €10,000 threshold into the place of supply rules for VAT for businesses making sales of digital services; and
the Value Added Tax (Special Accounting Schemes) (Supplies of Electronic, Telecommunication and Broadcasting Services) Order 2018, introducing legislation to allow all non-established taxable persons making supplies of digital services to customers in the EU to join the ‘non-union’ VAT MOSS scheme.
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