VAT on digital services in the EU
From 1 January 2015 there are new place of supply rules for value added tax (VAT) on the supply of digital services by businesses to consumers in the EU.
VAT on digital services will be paid in the consumer’s country, not the supplier’s country. It will be charged at the rate that applies in the consumer’s country.
What you need to do
As a supplier of digital services to EU consumers you can either:
- register for VAT in each EU country you supply to
- register to use the VAT Mini One Stop Shop (VAT MOSS) online service
Using VAT MOSS, you can account for the VAT due on your business to consumer (B2C) sales in other EU countries by submitting a single quarterly return and payment to HM Revenue and Customs (HMRC).
HMRC will send an electronic copy of the appropriate part of your return, and any payment, to each relevant country’s tax authority.
‘Digital services’ includes:
- broadcasting – the supply of television or radio programs
- telecommunications – fixed and mobile telephony, fax and connection to the internet
- e-services – video on demand, downloaded applications (or ‘apps’), music downloads, gaming, e-books, anti-virus software and online auctions
This is a fast-changing area. These are examples rather than a complete list of digital services.