HMRC has announced new measures affecting digital services
An introduction to the Mini One Stop Shop (MOSS) here
The measures make two changes to the rules for businesses making sales of digital services to consumers across the EU. They will:
- Introduce a (sterling equivalent) €10,000 threshold for total supplies to the EU in a year of sales of digital services. This change means that businesses will only be subject to the VAT rules of their home country if their relevant sales across the EU in a year (and the preceding year) falls below this threshold. If the businesses total taxable turnover is below the UK VAT registration threshold they will be able to de-register from VAT. Businesses can continue to apply the current rules if they so choose.
- Allow non-EU businesses, which are registered for VAT for other purposes, to use the MOSS scheme to account for VAT on sales of digital services to consumers in EU Member States. This group are currently excluded from using MOSS.
Operative date
The measure will have effect from 1 January 2019.
Current law
Introduction of a threshold – current law is contained in Schedule 4A, para 15(1) of the VAT Act 1994.
Inclusion of Non-Established Persons in MOSS – current law is contained in Section 3A of the VAT Act 1994 and in Schedule 3B of the VAT Act 1994.
Please contact us should you have any queries.