On 1 January 2015, new EU VAT rules came into effect with regard to the supply of “TBE” services made to private consumers located in the EU (i.e. supplies of “Telecommunications, Broadcasting and E-Services”).
The term “e-services” is potentially far-reaching, but has been defined for these purposes as only including services that are supplied electronically which are essentially automated with little / no human input. Thus delivering a course via the internet, for example, is an e-service for VAT MOSS purposes if the service is automated and involves no or minimal human intervention to deliver. It is not an e-service for VAT MOSS purposes if it involves online tutors or live webinars .
The new rules have made the place of supply of TBE services B2C to be the place where the consumer resides, as opposed to where the supplier resides. This now means that businesses will have to register and account for VAT in every Member State in which they supply such services to consumers.
The new rules do not affect supplies made to EU business customers (B2B), which should still be rated at 0% VAT provided the customer’s VAT number is obtained and quoted on the sales invoice.
VAT MOSS Scheme
In order to simplify the obligations of suppliers of TBE services, an optional new special scheme known as the Mini One Stop Shop (MOSS) also came into operation on 1 January 2015.
This permits businesses to submit returns and pay the relevant VAT due to various Member States through the Irish Revenue Commissioners instead of having to register for VAT in multiple Member States.
The VAT MOSS scheme provides for the payment of EU VAT only. Recovery of EU VAT incurred must be done separately on ROS by way of an EVR return.
VAT MOSS Registrations & Returns
VAT MOSS registration is optional; businesses could instead choose to register for and account for VAT in every Member State in which they supply such services to consumers.
If a business does choose to register for VAT MOSS, it must do so online via ROS and the VAT MOSS returns must also be made online via ROS; there is no paper service.
Revenue will prepopulate the MOSS VAT return with the basic details such as the MOSS registration number and the relevant calendar quarter. A drop down menu will allow you to select the individual Member States to which you have made supplies and to enter the details relevant to supplies in that Member State.
The EU Commission website provides relevant information on the VAT rates in all Member States: http://ec.europa.eu/taxation_customs/tic/public/vatRates/vatrates.html
The MOSS VAT return covers a calendar quarter commencing on 1 January, 1 April, 1 July or 1 October and must be submitted within 20 days of the end of that quarter.