Changes to EU VAT rules relating to broadcasting, telecommunications and e-services are set to come into force from 1 January 2015.
Under the new place of supply services rules, businesses in these sectors will need to keep records about the range of electronic services they supply, as well as details of their customers and where they are based.
At present, the place of taxation for broadcasting, telecommunications and e-services is determined by the business’s locations as a supplier of services. However, this will be determined by the customer’s location from the beginning of 2015.
Areas affected businesses will need to consider when keeping records under the new rules include:
- Who provides the service to the customers – is it the company themselves or is there an intermediary acting in their own name but on the company’s behalf?
- Is the customer classed as a taxable or non-taxable person?
- The ‘place of consumption’ of the service – is it at the customer’s residential address, or is it provided to other businesses (where different rules apply)?
- Keeping evidence to support the decision on the ‘place of consumption’, such as a customer’s billing address or bank details.
Instead of having to register for VAT in every EU member state, businesses affected by the rule change can opt to use the VAT Mini One Stop Shop (VAT MOSS) online service, allowing them to complete a single return covering broadcasting, telecommunications and e-services sales in any member state where they do not have a place of business. This will also be available from 1 January 2015, although businesses can register to use it from October 2014.
At Milsted Langdon, our tax team have particular expertise in the complex area of VAT and can help ensure you understand your obligations. To find out how we can help, please contact us.