For digital services companies making multiple cross border sales to consumers (B2C), getting your VAT compliance in order can be an all-consuming task. This problem is compounded by Brexit which leaves many UK based businesses unsure, of how to keep on top this. A solution to this is through the VAT “Mini One Stop Shop” (“MOSS”) scheme introduced in 2015. In order to avoid suppliers having to VAT register in each of its customer’s EU Member States, the supplier instead can choose to file quarterly returns and pay the relevant EU-wide VAT due in a single member state. If your sales of digital services to the EU are less than 10,000 Euros, then you cannot register for the VAT MOSS scheme.
Electronic services/digitised goods include the following for VAT purposes:
- Website hosting
- Software & apps
- Online teaching
- Online consulting
- Radio broadcasting
There are two types of VAT MOSS schemes:
- Union VAT MOSS – for businesses based in the EU
- Non-Union VAT MOSS – for businesses based outside of the EU (which now includes the UK from 1st January 2021)
Union VAT MOSS
To use the Union VAT MOSS scheme, your business must:
- be based in the EU or be a non-EU business with a fixed establishment in the EU
- be registered for VAT
- supply digital services to customers in the EU
Non-Union VAT MOSS
To use the Non-Union VAT MOSS scheme, your business must:
- be based outside of the EU (includes the UK from 1 January 2021)
- have no fixed or business establishments in the EU
- supply digital services to consumers in the EU.
Now that the UK is no longer part of the EU VAT system, any non-EU based businesses will no longer be able to use the UK’s VAT MOSS service to report EU sales any longer. Here at Quintas, we provide a full range of VAT MOSS related services including registration, filing of returns as well as dealing with any queries which may arise with various national tax authorities.
If you would like to discuss the applicability of the VAT MOSS scheme for your business please feel free to contact Dave O’Brien (firstname.lastname@example.org), Kevin Canning ( email@example.com ) , Adam McCarthy (firstname.lastname@example.org) or Kyle Baxter (email@example.com).