What is the VAT MOSS scheme? How does it apply to the supply of B2C digital services in the EU? 

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This is a freeview 'At a glance' guide to the VAT Mini One Stop Shop (MOSS).

At a glance

  • Since 1 January 2015, the Place of supply for business-to-consumer (B2C) supplies of digital services has been the place where the customer who receives the service lives or is located.
    • Sellers must account for VAT at the applicable rate in the relevant member state.
  • Therefore, suppliers would need to register for VAT in all EU member states where they have customers.
  • As there are no minimum thresholds, supplying a single customer within one member state would require VAT registration in that state.
  • Prior to 31 December 2020, to avoid the need to register for VAT in each EU member state, UK businesses supplying digital services to the EU could opt to use a Mini-One Stop Shop (MOSS) online service. 
    • UK MOSS was withdrawn following the end of the UK's transition period.
  • Since 1 January 2021, UK businesses supplying digital services to the EU can take advantage of Non-Union MOSS, by registering in an EU member state. 
    • This avoids VAT registration in all EU member states to which relevant services are provided. 

The Non-Union MOSS Scheme

  • You have to designate a member state to register in: this can be any EU country you choose.
  • Registrations will start on the first day of the calendar quarter after you request to join the scheme unless otherwise requested.
  • There are specific registration deadlines. 
  • VAT is charged on supplies at the rate which applies in the country the supply is made: not the rate which applies in the country of registration (unless the supply is made to that country). 
  • Non-Union MOSS returns must be submitted online, within 20 days of the end of each return period. 
  • Records must be kept for 10 years after the end of the year in which the service was supplied. 

What are digital supplies?

Digital supplies include:

  • Broadcasting.
  • Telecommunications.
  • Electronically supplied services.

The list is not exhaustive, especially in a fast changing environment such as digital services.

Electronically supplied services

Electronically supplied services are those which are automatically delivered over the internet, or an electronic network, where there’s minimal or no human intervention.

Identifying where the consumer is located

In order to comply with the rules it will be necessary to identify the place where the consumer is established. This will normally be their permanent address, or where they usually reside, and that will be the place where VAT on digital services is due.

Useful guides on this topic

Place of supply: Mini One Stop Shop (MOSS)
The place of supply of B2C digital services is where the customer is based. Where supplies are made to the EU, this can mean multiple VAT registrations are required. How does MOSS with assist this? What is the position post-1 January 2021?

Place of supply: Services
The place of supply (POS) of a service determines whether the supply is within the scope of UK VAT and whether VAT is payable on that supply.

Online Marketplaces: Selling goods in the UK
When do you have to register for UK VAT? When is UK VAT payable? What amount is VAT payable on? What information do you have to give the marketplace provider? What will it do with that information?

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