Change to place of supply of digital services & new MOSS scheme

On 1 January 2015 the VAT place of supply rules for business to consumer supplies of telecommunications, broadcasting and e-services will change from the member state where the supplier belongs to the member state in which the consumer resides.  The current VAT rule for business to business supplies is unaffected under this change.


Legislation was announced in Finance Bill 2014 to tax intra-EU business to consumer supplies of telecommunications, broadcasting and e-services according to the EU country where the customer is located.  This will result in VAT being chargeable at the applicable rate in every member state in which a business makes supplies to.  To comply with these new rules businesses will either have to register for VAT in every EU country where they have customers or elect to register under the EU VAT Mini One Stop Shop (MOSS) simplification scheme.

The types of services covered are as follows:

  • Broadcasting includes the supply of television or radio programs to a schedule by the person that has editorial control of those programmes.
  • Telecommunications include the service of sending or receiving signals by wire, radio, optical or other systems. It includes fixed and mobile telephony, fax and connection to the internet.
  • E-services include: video on demand, downloaded applications (or ‘apps’), music downloads, gaming, e-books, anti-virus software and on-line auctions


The optional MOSS scheme has been set up to save businesses having to register for VAT in every member state where they have customers.  The scheme will be available for use from 1 January 2015, although registrations can be started now.  MOSS is an online “bolt on” to the regular VAT return system that will allow businesses to account for VAT due in other EU countries by submitting a single return to HMRC.
Registration for MOSS was available in the UK from 1 October 2014.  If businesses do not wish to register for MOSS, they will be required to register in every member state applicable.  There is no de-minimis turnover threshold, therefore registration will be required regardless of the value of applicable supplies in each EU country.

If your business supplies digital services to consumers in the EU, this change will affect you and action should be taken to ensure you are prepared for these changes.

If you consider that this might be relevant to your organisation and would like to discuss this development in more detail, please do not hesitate to contact our Senior VAT Manager Iain Masterton for further information on 0131 558 5800 or at


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