VAT place of supply of digital services

New rules regarding the taxation of cross border business to consumer (B2C) supplies of digital services, such as broadcasting, telecommunications and e-services (BTE), came into effect on 1 January 2015.

VAT on these supplies must now be charged and accounted for in the consumer's, rather than the supplier's, Member State using the VAT rate in force in the consumer's Member State. Business to business (B2B) supplies are unaffected by this change to EU legislation.

The new voluntary Mini One Stop Shop (MOSS) provides a helpful simplification measure for those businesses affected by the 2015 VAT place of supply changes. It allows a business to register with HM Revenue & Customs (HMRC) and make a single declaration every calendar quarter covering all the VAT due in every other Member State.

HMRC wants to encourage UK businesses to register to use it, and has indicated it would adopt a light touch in enforcing the registration deadlines.