New rules have just come into force which will impact companies providing digital services to other EU member states. Digital services comprise the following:
e-services
video on demand
download applications (apps)
music downloads
gaming
e-books
anti-virus software
online auctions
broadcasting – the supply of tv or radio programmes
fixed and mobile telephones
The big change is that the sale is deemed to take place where the customer is located rather than the supplier. This means that the supplier needs to charge VAT which then needs to be reported and paid to each EU state that they make sales in.
To avoid having to register for VAT in each individual member state, HMRC have set up the “Mini One Stop Shop” or “MOSS”. Once you have registered for a UK VAT MOSS scheme, you submit, each calendar quarter, a single MOSS VAT Return and single VAT payment to HMRC. HMRC will then forward the relevant parts of your return and payment to the tax authorities in the member states where your customers are located.
Please contact us for further assistance on this and we will be happy to help.
