If your business sells digital services to the EU from the UK there are significant changes to VAT reporting post-Brexit.
Digital services include things like website hosting, broadcasting, telecommunications services, video on demand, downloadable music, games, apps, software and ebooks. If you supply any of these to EU member states and you forecast to make more than £8,818 of sales (including VAT) in a calendar year, then you must do one of the following:
- register for VAT in each of the countries you trade with, or,
- Register for the MOSS (Mini One Stop Shop) Scheme
My company is already a member of UK MOSS, do I need to register?
You can use your existing MOSS account to declare all sales VAT up to 31 December 2020. But, you will not be able to use the UK’s VAT Mini One Stop Shop (VAT MOSS) service to declare sales and pay VAT due in EU member states after 1st January 2021. After this date you need to re-register.
There are two schemes running under MOSS:
- the union scheme, for businesses established in the EU or with at least one branch based in an EU country
- the non-union scheme, for businesses not established in the EU and without any branches based in the EU
If your business does not have a head office or branch in an EU member state you will need to set up a non-union scheme. Firstly, You have to designate a member state of identification. This can be any EU country you choose and can be done online through your designated member-states identification portal. Once your registration details have been received and validated, they will be stored in a database and forwarded by your member state of identification to all other EU countries. For a list of EU member states and quick links go to: https://europa.eu/youreurope/business/taxation/vat/vat-digital-services-moss-scheme/index_en.htm#outsidetheeu
You will be allocated a VAT number by the EU country you have chosen to be your member state of identification and charge VAT at the rate of the EU countries where your customers reside. You should apply the same invoicing rules as your member state of identification (an invoice is not required in most countries when supplying services under the MOSS scheme). Please remember, these VAT returns are made in addition to your normal UK domestic VAT returns.
For more information about MOSS, please go to: ec.europa.eu/taxation_customs/business/vat/telecommunications-broadcasting-electronic-services/