VAT MOSS and 'digital services'

From 1st January 2015 there are new place of supply rules for value added tax (VAT) on the supply of digital services by businesses to consumers in the EU. VAT on digital services will be paid in the consumer’s country, not the supplier’s country. It will be charged at the rate that applies in the consumer’s country.

The change only applies to “digital services” that are “electronically supplied”, such as:

• images or text, such as photos, screensavers, e-books and other digitised documents e.g. pdf files
• music, films and games, including games of chance and gambling games, and of programmes on demand
• on-line magazines
• website supply or web hosting services
• distance maintenance of programmes and equipment
• supplies of software and software updates
• advertising space on a website

“Electronically supplied” means they are delivered over the internet, or an electronic network, where there is minimal or no human intervention. In practice, this means where the sale of the digital content is entirely automatic - for e.g. a customer clicks the ‘buy now’ button on a website and the:

• content downloads onto their device; or
• customer receives an automated e-mail containing the content

If you’re struggling to get to grips with the new rules, your local TaxAssist Accountant would be happy to discuss this further with you. Or alternatively, they could manage your VAT affairs for you. 

Date published 2 Jan 2015

This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.