Presentation from HMRC giving details about the changes in VAT laws across Europe.

1. 2015 VAT Rule Change for Digital
Service Supplies and
Mini-One Stop Shop (MOSS)
Andrew Webb
HM Revenue & Customs
UKIE Board Meeting
25 July 2014

2. Project Name: VAT Package | | 2
Content
1. 2015 VAT rule change for cross border supplies of digital
services
2. Issues arising from 2015 B2C rule change
3. VAT Mini-One Stop Shop (MOSS) Special Schemes
4. MOSS Registration and Functioning
5. Conclusions

3. Project Name: VAT Package | | 3
1. 2015 VAT rule change for cross-border supplies of digital
services
• Final step in implementing a series of VAT rule changes
which will embed the principle of taxation at the place of
consumption (destination) to cross-border supplies
• Rule already in place for Non-EU to EU business to
consumer (B2C) electronic service supplies (2003 VAT on E-
Services Scheme (VoES))
• From 1 January 2015 EU rules will change for intra-EU
cross-border supplies of digital services (ie
telecommunications, broadcasting and e-services) so VAT
will be due where customer is located
• To minimise potential VAT accounting administrative
burden, EU introducing a Mini-One Stop Shop (MOSS)

4. Project Name: VAT Package | | 4
2. Issues arising from 2015 B2C Rule Change
a) Definition of digital services (telecommunications,
broadcasting and e-services) - scope
Examples, which are not exhaustive, provided in Articles
6a, 6b and 7(3) of Regulation 282/2011 as amended by
Implementing Regulation
b) Who is making the supply (Article 9A of Imp Regs)
Where digital services are supplied through a telecomms
network, an interface or portal such as a marketplace for
applications, the presumption is that intermediary is acting
in their own name but on behalf of the service provider

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2. Issues arising from 2015 B2C Rule Change
b) Who is making the supply? (Continued)
The presumption is that the intermediary (eg the network provider) is
acting in his own name, but on behalf of the service provider UNLESS:
(a) the provider is explicitly indicated as the supplier, and this is reflected
in contractual arrangements;
(b) Any invoice issued/made available by each taxable person taking
part in the supply identifies the services and the supplier;
(c) Any bill or receipt issued/made available to the customer identifies
the services and the supplier.
BUT a taxable person who authorises the charge to the customer,
authorises the delivery of the services, or sets the general terms and
conditions of the supply, shall not be permitted to explicitly indicate
another person as the supplier.

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2. Issues arising from 2015 B2C Rule Change
c) Determining status of the customer (non taxable person)
•Supplier may regard the customer as a non-taxable person
when no VAT Registration Number (VRN) provided and
there is no evidence to the contrary
d) Determining “place of consumption” (Reg 282/2011)
•The customer’s “permanent address” (in population
register), or where person “usually resides”
•However, presumptions for supplies via: (i) Telephone box
or internet café, where these are located; (ii) land line, where
land line located; (iii) mobile networks; mobile country code
of the SIM card, (iv) Viewing card or decoder; where card or
decoder posted

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2. Issues arising from 2015 B2C Rule Change
e) Evidence to support taxing decision
• For most supplies, place of consumption is determined by
reference to 2 pieces of non-contradictory evidence
• Evidence: Billing address; Internet Protocol (IP) address;
bank details; SIM Card; fixed land line, other commercially
relevant information
• With presumptions at (d), they can be disregarded only if
supplier holds 3 pieces of non-contradictory evidence that
customer located elsewhere
• In all cases a tax administration can rebut a presumption,
but only where there are indications of misuse or abuse by
the supplier

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3. EU VAT Mini-One Stop Shop (MOSS) Special
Schemes
• Changes to VAT place of supply rules means businesses
that make B2C supplies of services to other Member States
would have to register for VAT in all those Member States
•To reduce the burdens and costs on businesses, EU VAT
MOSS will allow suppliers of telecommunications,
broadcasting and e-services the option of registering for
VAT in one Member State (the Member State of
Identification (MSI), and to submit a single electronic MOSS
VAT return and a single payment in respect of all their EU
B2C supplies
• The MSI tax authority will disaggregate return data and
payments, and transmit them to the relevant Member State
(s) of Consumption (MSC) tax authority

9. Project Name: VAT Package | | 9
3. EU VAT Mini-One Stop Shop (MOSS) Special
Schemes
• Implementation of a VAT MOSS Scheme for intra-EU
Business to Consumer (B2C) supplies of digital services will
align arrangements with those which have been in place
since 2003 for Non-EU to EU supplies of digital services-the
VAT on E-Services (VoES Scheme)
• Current VoES scheme only covers e-services, but from 1
January 2015 the scope will be extended to cover
broadcasting and telecommunications and it will be renamed
the Non-EU MOSS Scheme
• HMRC will support existing VoES registered businesses to
migrate to Non-EU MOSS Scheme if they wish to stay
registered for the scheme and to have the UK as their MSI

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4. MOSS Registration & Functioning (Registration)
• Use of schemes is optional
• If business decides to register for (Union-Scheme) MOSS,
they must do so in the Member State in which they are
‘established’. Can only have one EU MOSS registration
• Business completes MOSS VAT registration application
form (see Annex to Regulation 815/2012) and sends it to the
tax authority
•Businesses can register with tax authority (HMRC) from
October 2014, so they are able to use MOSS from January
2015. Otherwise MOSS registration takes effect from
beginning of calendar quarter
• If approved, business will be identified for MOSS with the
same VAT Registration Number as for domestic VAT

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4. MOSS Registration & Functioning (Returns)
• For in scope supplies, MOSS registered businesses must
submit, by electronic means, a MOSS VAT return, to their
tax authority within 20 days of end of each calendar quarter.
‘Nil’ returns are required.
• MOSS return (see Annex to Regulation 815/2012 of 13
September 2012) contains details of sales made in each
MSC by the taxable person
• Single related MOSS VAT Return payment must be made
within the same time period.
• Non-Euro countries may require payment in their national
currency. If supplies in other currencies, conversion shall be
made by applying European Central Bank rate published on
the last day of calendar quarter

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4. MOSS Registration & Functioning (Audit &
Control)
Following EU level discussions between the Commission
and Member State tax administrations the following MOSS
taxpayer audit and control arrangements, which aim to
balance Member States need to protect VAT revenues with
avoiding imposing administrative burdens on business, have
been agreed. They have the support of almost all Member
States:
• Member State tax authorities will create network of MOSS
co-ordinators to facilitate management of new schemes
• Initial contact and engagement with MOSS business
should, where possible, be routed through the MSI tax
authority (although acknowledged that MSC has legal right
to contact MOSS business if it wants to do so)

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4. MOSS Registration & Functioning (Audit &
Control)
• MSIs should use their normal national procedures when
contacting businesses registered for Union Scheme, and e-
mail for non-Union scheme
• Where the MSC tax authority wants to contact the MOSS
business this should be initiated via the businesses contact
e-mail address
• All Member States will accept SAF-MOSS format (in XML)
if a business chooses to use this format to supply requested
information to tax authorities
• MSI tax authority will normally co-ordinate MOSS audits to
avoid imposing unreasonable administrative burdens

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4. MOSS Registration & Functioning (Record
Keeping)
The records which a MOSS business must keep are those
specified in paragraph 63 (c) of Regulation 967/2012. They
include:
-Member State of consumption to which service
supplied and information used to determine
location of customer
-type of digital service supplied
-date of supply
-VAT rate applied; and
-amount of VAT payable and the currency used.
The records must be kept for a period of 10 years

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5. Conclusions
In recent months the main issues which have generated
discussion and debate include the following:
• Article 9 of the place of supply implementing regulations
defining who is deemed to be making the supply
• Use of ‘presumptions’ to determine the place of
consumption, and the evidence which businesses will need
to support their taxing decisions
• Will Member States MOSS systems be ready on time?
• the requirement that to register to use the MOSS schemes
a business must already be ‘identified’ (registered) for VAT
• audit and compliance of MOSS businesses

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5. Conclusions
• On 1 January 2015 important changes to EU VAT place of
supply rules for digital services
• Need to begin planning for changes now, as they will
impact on contractual terms and conditions
• EU VAT MOSS a potentially beneficial simplification
scheme for businesses making B2C supplies to other EU
Member States
• Provided MOSS is successful, it will pave the way for
incremental developments including extending its scope to
B2C supplies of goods and eventually B2B supplies.

17. Thank you
HM Revenue & Customs
100 Parliament Street
London
SW1A 2BQ
andrew.webb@hmrc.gsi.gov.uk