On the 1st January 2015 the European Union introduced new legislation, changing the way VAT is charged on telecommunications, broadcasting and electronic (TBE) services. This change will greatly affect businesses that provide TBE services to consumers in the European Union whether those businesses are from the E.U. or outside of it. The process of recording and charging VAT has been completely updated for these companies.
The change in legislation does not affect businesses who sell to other businesses, only to those that supply services to non-business customers in member states other than their own.
At the heart of the law change is the ‘place of supply’. From 1st January 2015 the place of supply for TBE services has been changed to be the same as the country in which the customer is receiving the service. This now means that businesses have to register and account for VAT in every E.U. member state that they supply paid services to non-business customers.
This can of course means a lot of administration and bookkeeping heartache. However, the online VAT MOSS (Mini One Stop Shop) system has been set up by Revenue to make it easier to handle all of this from one easy portal. If you’re a TBE service provider across Europe you should go a check it out right now. The longer you wait before making the change, the more you’re going to pay your accountant for your next VAT return.
If you are unsure about whether or not this applies to you, get some advice from Revenue HMRC or your accountant. Maybe take a look at this informational flow chart drawn up by HMRC, it might give you an idea if VAT MOSS is something that will be relevant to your business.
More information about the legislation change can be found online through Article 9A of Council Implementing Regulation 1042/2013 along with the accompanying explanatory notes provided by the European Union.
