Starting 1 January 2015, there are new VAT regulations, aimed at businesses that sell electronic products and services to private individuals within the European Union. From the first day of 2015, the place of taxation will be where the customer lives, rather than where the supplier of the service is established. Here’s what you should know about these incoming changes.
As stated, the rules for telecommunications, broadcasting and electronic services will change. These services will be taxed in the country where your customer is located and it doesn’t matter if that customer is a private individual or an entrepreneur.
Transactions affected by the change
The new VAT regulations are only affecting commercial transactions with a customer who is a resident in the EU. And it’s also a requirement that the service is provided by electronic means. So it’s about services like hosting or streaming offers, fee-based member portals, online databases, music and movie downloads, digital photographs, e-books, online sales platforms and online tutorials.
On its website, the European Union states: “Where the Internet or another electronic network is used simply as a means of communication, this does not necessarily create an electronically supplied service. Any one of the national tax administrations will be happy to provide more guidance on what services are affected.”
You should know that the change also affects businesses from outside the EU providing electronic services within the EU.
Mini One-Stop-Shop (MOSS)
With these new rules, you would be bound to register in every EU member state where you provide services. But that’s not necessary, as the Mini One-Stop-Shop Scheme (or MOSS) will be introduced on 1 January 2015. This enables entrepreneurs who sell digital services to declare the VAT on these services via one EU member state. (These rules already applied to electronic services for companies selling from outside the EU.)
The European Union has published a guide to the VAT MOSS as well as guidelines on auditing under the MOSS. And if you need even more information, the European Commission has published a page about the current and new rules.
If you want more information about the new VAT regulations, please contact the national tax administration:
|Belgium||Federale Overheidsdienst Financiën|
|Bulgary||National Revenue Agency|
|Cyprus||Ministry of Finance, VAT Service|
|Czech Republic||Daňový portál|
|Germany||Bundeszentralamt für Steuern|
|Estonia||Maksu- ja Tolliamet|
|Greece||Γενική Γραμματεία Πληροφοριακών Συστημάτων|
|The United Kingdom||HM Revenue & Customs|
|Ireland||Revenue Online Service|
|Italy||Agenzia Delle Entrate|
|Luxembourg||Administration de L’enregistrement et des Domaines|
|Latvia||Valsts Ieņēmumu Dienests|
|Lithuania||Valstybinė mokesčių inspekcija|
|Portugal||VAT on e-services Portugal|
|Romenia||Ministerul Finanţelor Publice|