Changes to VAT Place of supply rules and the VAT Mini One Stop Shop (MOSS)

Telecommunications, broadcasting and e-commerce businesses trading across European Union borders will be affected by changes on 1 January 2015. HMRC is seeking views on these changes and on the MOSS

online service being launched. As a result a Brief detailing these changes has now been published.

There will be are two changes taking effect on 1 January 2015, although businesses will be able to register for the MOSS with effect from October 2014.

The first affects the VAT place of supply rules. This will mean that supplies of telecommunications, broadcasting and e-services made by a business established in one EU member state to a private consumer located in another member state (“intra EU B2C supplies”) will be taxed in the member state in which the consumer is located. These services are currently taxed where the business supplier is established. This change will mean in future they are taxed where they are consumed.

The second change is the introduction of the VAT Mini One Stop Shop (MOSS), an online service that will give businesses the option of registering in the UK to account for the VAT due in respect of B2C supplies of these services in all the other Member States (at the appropriate rate of tax in each state) by submitting a single return to HMRC.

Unless they opt to register for MOSS, businesses that make intra EU B2C of the aforementioned supplies will be required to register and account for VAT in every Member State in which they have customers. MOSS will give these businesses the option of registering in just the UK and accounting for VAT on supplies to their customers in other Member States using a single online MOSS VAT return submitted to HMRC. This is intended to significantly reduce the administrative burden of the new rules.