VAT Penalties Blog

16.01.2015

VAT and MOSS – New EU Regulations have nothing to do with rolling stones!

MOSS

In the first of two blogs on this subject, we look at what MOSS is and why it has been introduced. A subsequent blog will examine how MOSS will work and what the implications are for UK traders.

There has recently been a fair amount of press coverage, some more accurate than others, regarding some recent EU legislation that has changed the way that certain supplies are treated for VAT purposes .Generally, the only reason that VAT is covered in the press is when there has been a tribunal decision concerning food and an amusing story can be concocted from it. In this case, those affected will definitely not be laughing.

Prior to this year, a UK VAT-registered business charged UK VAT at all times when selling digital services to EU private customers, regardless of where they belonged. That was straightforward, if the customer was a private individual and not a business, and they lived anywhere in the EU, no further information was required.

Coming into force on 1 January 2015, the new legislation affects businesses selling digital services, such as music downloads, e-books, or online courses, to members of the public in other EU countries. VAT is now chargeable in the country where the products are bought, rather to the country where the seller is located which has been the case up until now. Business to business supplies are not affected. These new regulations have been put in place to stop larger companies such as, Amazon, Apple and Google from selling out of Luxembourg, which has the lowest VAT rate in the EU. However the new rules may have the greatest impact on small businesses that lack the administrative support available to large companies.

Businesses can choose between registering for VAT in each EU country where they have private customers, and registering to use MOSS (Mini One Stop Shop), which allows one return to be completed in one country with a separate entry for each country to which supplies have been made. The VAT has to be declared at the correct VAT rate for each country concerned.

If you would like any further information regarding this subject, please contact gill.yates@vat-penalties.com, or phone 08458 502360 and ask for Gill

VAT-Penalties Team

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