On October 1, 2014, EU Member States launched the Value Added Tax (VAT) Mini One Stop Shop (MOSS) online registration portal for cross-border supplies of electronically supplied services (such as software and website hosting), broadcasting and telecommunications services.
The MOSS regime was introduced to help suppliers of these services comply with new VAT rules on the place of supply of these services, which will come into effect from January 1, 2015. Businesses are advised to register as soon as possible to prepare for the new rules.
Place of supply rules are central to Europe’s harmonized value added taxation regime because supplies are subject to VAT only in the Member States in which they are deemed to take place. As of 2015, all broadcasting, telecommunications, and electronically supplied services supplied to EU non-business customers will be deemed to take place in the Member State where the customer “belongs” -- meaning generally, in the case of individual customers, their Member State of residence.
Heretofore, the place of supply rules were more complex, and differed depending on whether the supplier was established within or outside the EU. These rules generally enabled both EU and non-EU businesses to structure their affairs so as to be liable for VAT only in the Member State where they were established or set up a permanent establishment.
As this is no longer possible, the new rules affect both EU and non-EU businesses.
The MOSS regime eases the compliance burden for suppliers who would otherwise have to register and pay VAT in all their customers' Member States. Suppliers can register for the MOSS in one EU Member State, and, with effect from January 1, 2015, pay all VAT due in connection with supplies to EU-resident final customers to that State's Tax Authority. The supplier must also submit a quarterly declaration providing information about the amount of VAT payable to each Member State, and the Tax Authority then distributes the VAT remittance to the other Member States in accordance with the declaration.
An EU business must generally register for the MOSS in the Member State where it has its principal place of business or head office. A non-EU business with a fixed establishment in the EU can register for the MOSS in any Member State in which it has a fixed establishment. A non-EU business with no fixed establishments in the EU can register for the MOSS in any Member State of its choice.
Note that not all Member States have launched a MOSS Portal as at October 1, 2014. For example, the UK MOSS information portal invites suppliers to register for the UK MOSS as of October 20, 2014. Therefore, the website of each MOSS Tax Authority should be consulted to ascertain whether MOSS registration is currently available.
By Joanna Norland, Technical Editor, VAT Navigator
Further information about the MOSS is provided in Bloomberg BNA's VAT Navigator. Access even more in-depth analysis and expertise with a free trial to the Premier International Tax Library.
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