VAT - 2015 Changes - Mini One Stop Shop

VAT mini one stop shop (MOSS)

A simplification scheme relating to the changes to the place of supply rules

for business to consumer (B2C) supplies of digital services.

VAT mini one stop shop | June 2014

© 2014 Grant Thornton UK LLP. All rights reserved. 2

Contents

Background to the MOSS 3

Digital services 4

Place of supply 5

MOSS registration 6

MOSS returns 7

Payments 8

Compliance 9

Key considerations 10

Contacts 11



MOSS background

HANGE:

On 1 January 2015 the place of supply rules for business to consumer (B2C) supplies of telecommunications, broadcasting and electronically supplied services (TBES) will change from where the supplier of the services is located to the location of the consumer.

ONSEQUENCE:

VAT will be chargeable, at the applicable rate, in each of the Member Sates in which TBES are made.

HOICES:

Suppliers of TBES have a choice to either:

1. Register for VAT in each member state, potentially 27 registrations, or

2. Elect to register under an EU-wide scheme known as the MOSS.


© 2014 Grant Thornton UK LLP. All rights reserved. 4 4

Broadcasting

• Television programs

• Radio programs

E-services

• Video on demand

• Apps

• Music downloads

• Gaming

• e-books

• anti-virus software

• on-line auctions

Telecommunications

• Sending or receiving signals by wire, radio, optical or

other systems.

• Fixed and mobile telephony, fax and connection to the

internet.

What are digital services? Digital services include supplies that can be defined as broadcasting, telecommunications and e-services. HMRC acknowledge that

this is a rapidly evolving sector and so has provided a list of illustrative examples as follows:



Establishing the place of supply To enable VAT to be accounted for in the correct Member State, it is crucial to identify the place where the consumer is established.

This can be complicated in the realm of digital services.

Location

When determining the place of supply for digital services, the following presumptions can be made:

• telephone box / telephone kiosk = where located

• wi-fi hot spot / internet café = where located

• Restaurant or hotel lobby = where located

• on board transport = the place of departure

• telephone landline = where landline located

• Mobile phone = county code of sim card

• decoder = postal address where sent/installed

Evidence

• If the place of supply determined by presumption must retain

evidence confirming location

• If rebut presumption then alternative evidence is required,

three pieces of non-contradictory commercial evidence

• If services not on presumption list then two pieces

Examples of accepted evidence include:

• Billing address of customer

• IP address of device

• Location of bank

• Country code of sim card

• Location of land line

• Other commercially relevant information



Multiple establishments

• Business that have establishments in multiple

Member States can register and operate MOSS in

whichever Member State they choose

• MOSS cannot be used for supplies in any

Member State where a business establishment

already exists

• Instead, VAT will need to be accounted for

through that establishment's local VAT return

General

• Two schemes will be available:

–Union Scheme for EU based suppliers

–Non-Union Scheme for no-EU based suppliers

• Registration for both schemes will be available in

the UK from 1 October 2014

• Registration is voluntary

Alternative

• If decide against MOSS, will be required to

register for VAT in any Member State where a

supply of TBES services is made

• There is no de-minimis turnover threshold

• Therefore, required to register irrespective of the

value of supplies

VAT groups

• VAT groups entitled to register

• As a single taxable entity, supplies made by

members will be regarded as made by

representative member

• Law relating to VAT groups will be different in

each Member State

• Particular rules in relevant countries will need to

be examined in detail

De-registration from MOSS

• Wherever a business registers, it will have to

remain registered for a minimum of two years

• Businesses can voluntarily choose to leave the

MOSS scheme at any time, however will not be

allowed to re-join for two quarters

• If fail to meet the legal requirements for use,

automatically de-registered and excluded from

using MOSS for two years

Small businesses

• Businesses must already be registered for VAT

• Unregistered businesses trading below the VAT

threshold will not be able to use MOSS

• Instead, have to register and account for VAT in

the customers country

• Voluntarily registering for VAT in the UK could

be an option however will then need to account

for UK VAT on UK sales

MOSS registration

Wm Morrison Supermarkets PLC | March 2014


MOSS returns

The currency

for UK returns

will be GBP.

Must only be used for

accounting for VAT on

the supply of TBES

services.

The electronic portal will allow

part completion of a return and

allow this to be saved for any

later amendments.

In periods where no

TBES services have

been supplies, nil

returns are required to

be submitted.

If using UK scheme, must

declare B2C TBES supplies

made from the UK to other

Member States. If have

registered fixed establishments,

a separate declaration is

required for supplies made

from such establishments.

The exchange rate used to

convert monetary values

to other EU currencies

will be published by the

European central bank.

Must only include

B2C supplies of

TBES.

Must be submitted

electronically within 20

days of calendar

quarter.

When the return is

submitted the system

will generate a unique

reference number.

Must not be

submitted before

the end of return

reporting period .

Must include the

total supplies for

each Member State

at their standard and

reduced rates.



MOSS payments

Payments accepted electronically.

To be made by 20th of the month following

the quarter end.

Only deemed to have been made when

reached Member State's account in country of

MOSS registration.

One off payment only.

No payment plans or deferred payment

mechanisms.

No option of direct debit facility.



MOSS compliance

MOSS returns will be subject to periodic audits by tax authorities in each

Member State where supplies are made. These audits will be co-ordinated

by Member State within which supplier is registered for MOSS and will

likely take place alongside ordinary VAT inspections. However inspectors

from Member State of consumption may attend.

MOSS records must be kept for a period of ten years from 31

December of the year during which the transaction was carried out.



Key considerations

Are your supplies affected?

To register or not to register for MOSS?

Which Member State to register in?

How will you identify where your consumer is located?

What evidence will you be able to provide?

How will this affect your VAT compliance reporting?

Are your accounting systems ready for the changes?

Do your staff have the capacity to complete the additional reporting?

Grant Thornton has a Europe-

wide VAT service with over 100

experienced staff who can help

with the '2015 changes'.



Contacts Should you have any questions regarding the changes to to the place of supply rules for business to consumer (B2C)

supplies of digital services or wish to discuss any aspect of the Mini-One Stop Shop simplification scheme please get

in touch with your usual Grant Thornton contact or one of our specialists below.

Karen Robb

VAT Partner

T 020 772 82556

E [email protected]

Stuart Brodie

VAT Partner

T 0141 223 0683

E [email protected]

Mike Sheppard

VAT Partner

T 0121 232 5419

E [email protected]

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VAT - 2015 Changes - Mini One Stop Shop

Economy & Finance

Transcript of VAT - 2015 Changes - Mini One Stop Shop