VAT on e-services: get set – it’ll soon be all systems go!

If you are an EU-based provider of electronically-supplied services (e-services) to non-business (private) customers in other EU member states, you should by now be well aware of – and well prepared for – the changing VAT rules. If not, you need to act fast.

The new rules affect providers of e-services such as music and game downloads, e-books, online streaming of music and videos, and website hosting.

“The big VAT rule change is that from 1 January 2015, such e-services will be deemed to be supplied in the customer’s EU member state, not that of the supplier,” says Robert Facer, a Moore Stephens VAT expert. EU suppliers will therefore have to charge VAT at the rate applicable in each individual customer’s jurisdiction, not that of their own country as they do now. “This is a big change with substantial implications and challenges for e-service providers,” Robert warns.

Over the year we have issued a series of articles to help business prepare. If you would like a recap, here’s a reminder of the topics and a link to each one:

Place of supply – the big change is that you have to apply the VAT rate applicable where your (private) customer is located.

Status and location – to apply the new VAT rules correctly, you need to establish the status and location of your customers – not always an easy task, though some assumptions can be made.

Platform providers – the rule changes have a significant effect for intermediaries such as platform operators selling services in their own name.

The VAT Mini One Stop Shop (MOSS) – this new online service has now opened for registration. By opting to use the MOSS, businesses can make VAT payments and declarations to a single elected member state, rather than having to register and account for VAT in each one where they have customers.

Record keeping – the new VAT rules create some record-keeping challenges for e-services providers, so businesses need to make sure they are properly prepared.

If you still have any uncertainties as to how the new VAT rules affect your business, please get in touch. There really is no time to lose. And if you haven’t taken steps to register for the MOSS, now is the time to act.



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