VAT Guides Industry-specific

Electronic and Digital Services

With the increase in commercial services and revenue streams occurring digitally, there are special rules in the European Union which govern how such services must be treated from a VAT perspective.

The new rules implemented in 2015 apply to telecoms, broadcast and electronic services supplied within the EU to consumers.

The European Union includes the following services within this definition:

  • Download and online games
  • E-books (e.g. Amazon Kindle)
  • Download and streaming music and videos
  • Cloud computing, including software provided as a service (‘SaaS’)
  • Mobile phone services
  • Internet telephony (e.g. Skype)
  • Streaming television (e.g. Netflix)

Because of these rules, online digital services retailers will have to track where their buyers are, and then charge the appropriate VAT rate of the country of the consumer.  

In order to simplify the VAT compliance requirements, and to alleviate the need for businesses to VAT register wherever their customers are, a single VAT reporting portal was set up online. It is known as the ‘Mini One-Stop-Shop’ (MOSS) and it enables quarterly filings by companies who provide e-services covering all EU countries.

The MOSS applies to e–services provided to private individuals, not business customers (i.e. B2C sales as opposed to B2B)

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