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VAT on digital services to consumers

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Did you know that you will have to charge VAT on digital services to consumers from 1st January 2015?

On 1 January 2015, The European Union (EU) VAT place of supply of services rules will change for business to consumer (B2C) supplies of broadcasting, telecommunications and e-services (digital services). A consumer means a private individual.

These changes will affect all businesses that supply digital services to consumers, whether or not they are registered for UK VAT. This is because there are no registration limits for digital service supplies made to consumers outside the UK. Any business supplying digital services to a consumer in another Member State therefore has to charge VAT on the supply in that Member State and register for VAT in that Member State.

If your customer does not provide you with a VAT Registration Number (VRN), and you have no other information that suggests that your customer is in business and VAT registered, you can treat this as a B2C supply.

VAT Mini One Stop Shop (VAT MOSS)

To save you having to register for VAT in every EU Member State where you supply digital services, you may opt to use the VAT Mini One Stop Shop online service (VAT MOSS). This will be available from 1 January 2015, but you will be able to register to use it from October 2015

Remember this affects all businesses not just VAT registered ones. Contact us on 01243 788041 if you need help with this.


1 Comment

  1. The changes in VAT will effect the electronics goods and telecommunication department. Earlier the supply of service was determined as per the member state of supplier nut from 1st January 2015 itself it will be determined as per the member state of consumer.

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