B2C 2015 VAT changes

Changes to the VAT place of supply rules and the introduction of the VAT Mini One Stop Shop (MOSS)
Q & A Guidance 12 July 2013
This briefing provides answers to common questions about:
• changes to the VAT place of supply rules affecting telecommunications, broadcasting and e-services from 1 January 2015
and
• the introduction of the VAT Mini One Stop Shop (MOSS).

Expressions of interest are also sought from smaller sized businesses to join a stakeholder group or to suggest issues to be covered in the full guidance. Please see Question and Answer 7 for details.

Changes to the VAT place of supply rules and introduction of the VAT Mini One Stop Shop (MOSS)
Q1
What are the changes?
A1


There are two changes. The first affects the VAT place of supply rules and 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 ensure that in future they are taxed appropriately 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.

Q2
When do these changes take effect?
A2


On 1 January 2015, although businesses will be able to register for MOSS with effect from October 2014.

Q3
Why change the place of supply rules for telecommunications, broadcasting and e-services?
A3


The change ensures that supplies of telecommunications, broadcasting and e- services are appropriately taxed in the member state where they are consumed. This means that businesses that provide these services to UK customers will charge and account for UK VAT.

Q4
Why introduce MOSS?
A4

Unless they opt to register for MOSS, businesses that make intra EU B2C supplies of telecommunications, broadcasting and e-services 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 will significantly reduce their administrative burdens.

Q5
How will these changes be implemented?
A5

The EU legislation for these changes is already in place and this will be incorporated into UK primary legislation by Finance Bill 2014.

Q6
Is HMRC consulting on these changes?
A6

Yes, HMRC has set up a 2015/MOSS Working Group with a number of large businesses from the relevant sectors or their representatives. The Working Group meets regularly to discuss a wide range of practical implementation issues arising from these changes.
HMRC will also publish, in autumn 2013, draft legislation and a Tax Information and Impact Note as part of the consultation on draft Finance Bill clauses.

Q7
I run a smaller sized business (SME) that makes supplies of affected services to private individuals in other Member States. Can I discuss the impact of these changes with HMRC?
A7

Yes, HMRC is very keen to establish a second 2015/MOSS stakeholder group to represent the views of SMEs. If you are interested in joining this group please provide brief details about the type of activities you are involved in, or the types of businesses that you represent. Alternatively, if you would prefer not to join the group, HMRC would still like to hear about any issues that you have so that they can be considered when drafting public guidance – see Q10.
In both cases please e-mail: This email address is being protected from spambots. You need JavaScript enabled to view it. by 30 August 2013. Unfortunately, it may not be possible to respond to every e-mail or deal with specific queries at this time.

Q8
I run a small VAT registered business that supplies affected services (e.g. online information service) which I sell to private individuals located in the UK, France and Germany. Will I be affected?
A8

Yes. While you will continue to account for VAT on your supplies to UK customers in the normal way, you will also be required to register and account for VAT in France and Germany. Alternatively, you have the option of registering for MOSS. This will save you the need to register for VAT in France and Germany, and allows you to account for any VAT due in these countries by submitting a single return to HMRC (on which you will account for the VAT due in each member state in which you supply affected services, using their appropriate rate of VAT).

Q9
What are telecommunications, broadcasting and e-services?
A9

A full description of these services will be set out in guidance.
Examples of telecommunications services include: fixed and mobile telephone services; videophone services; paging services; facsimile, telegraph and telex services; access to the internet and worldwide web.
Examples of broadcasting services include: radio and television programmes transmitted over a radio or television network, and live broadcasts over the internet. Examples of e-services include: video on demand, downloaded applications (or “apps”), music downloads, gaming, e-books, anti-virus software and online auctions.

Q10
Where can I get more information about these changes?
A10

HMRC will publish full guidance about the changes well in advance of their taking effect on 1 January 2015.

www.hmrc.gov.uk/budget2013/vat-place-supply-rules.pdf

April 4: The European Commission today released explanatory notes intended to help businesses prepare for the new value added tax (VAT) rules for telecom, broadcasting, and electronic services that will be effective in 2015.

Beginning in 2015, VAT will be charged to the location where the customer is based—rather than where the seller is located—in cross-border business-to-consumer transactions.

Today’s explanation —Telecommunications, broadcasting & electronic services—focuses on the “place of supply” implementing measures that will apply across all EU Member States.

This information is to help businesses in preparing for and complying with the new tax rules from day one.

Table of Content

1. Current rules
2. New rules from 2015
3. The Explanatory Notes for 2015
4. One Stop Shop guidelines for 2015(available in 27 languages)
5. Events related to the new rules
6. Legislation now and after 2015

April 4: The European Commission today released explanatory notes intended to help businesses prepare for the new value added tax (VAT) rules for telecom, broadcasting, and electronic services that will be effective in 2015.

Beginning in 2015, VAT will be charged to the location where the customer is based—rather than where the seller is located—in cross-border business-to-consumer transactions.

Today’s explanation —Telecommunications, broadcasting & electronic services—focuses on the “place of supply” implementing measures that will apply across all EU Member States.

This information is to help businesses in preparing for and complying with the new tax rules from day one.

Table of Content

1. Current rules
2. New rules from 2015
3. The Explanatory Notes for 2015
4. One Stop Shop guidelines for 2015(available in 27 languages)
5. Events related to the new rules
6. Legislation now and after 2015