This document summarizes the changes to EU VAT regulations for digital services that will take effect on January 1, 2015. Under the new rules, VAT will be collected based on the location of the consumer rather than the service provider. This will require e-commerce merchants to identify each customer's country, apply the correct local VAT rate, and remit VAT payments through a new Mini One Stop Shop system. Non-compliance could result in fines, legal restrictions, or an inability to expand business into other EU countries. Merchants are advised to start planning now to understand how these changes may impact their business.

1. John
McCarthy
CEO
of
Taxamo
2015
EU
VAT
Change
for
eServices

2. PRESENTATION OUTLINE
1
2
3
4
Who
is
affected?
What
are
the
changes?
What
does
this
mean
for
you?
What
do
you
do
next?

3. Who do the changes affect?
v SoEware
and
soEware
upgrades
v Web
design,
data
storage,
hosJng,
VoIP
and
content
v Music,
e-­‐books,
films,
images
and
photographs
v Gambling
&
games
v Marketplaces
v Digital
goods
and
subscripJons
v Distance
teaching
&
training
eService
Providers…

4. The Change
Today
VAT
based
on
where
the
eService
Provider
is
located
Jan
1
2015
VAT
based
on
where
the
Consumer
is
located

5. Numbers
• 34,000
merchants
in
the
UK
• 240,000
merchants
in
the
EU
• +
merchants
selling
into
the
EU

6. What is the Change?
v You
need
to
idenJfy
the
country
of
each
customer
v You
need
to
find
two
pieces
of
non
conflicJng
evidence
v You
must
apply
the
VAT
rate
of
the
country
where
the
consumer
is
based
v You
need
to
remit
this
VAT
through
the
MOSS

7. How do I identify my customer?
Legisla;on
states
v IP
address
v Billing
address
v Bank
Details
v Mobile
country
code
v Other
commercially
relevant
informaJon
✔
✔
✔
✗
✔

8. Apply the VAT rate of the country
28
Member
States
Normal
&
reduced
rates

9. File & settle VAT through MOSS
v Mini
One
Stop
Shop
v Register
with
your
own
Tax
authority
v Log
on
@
h`p://www.hmrc.gov.uk/posmoss/
v Register
from
October
1st
v File
a
return
once
a
quarter
v Se`le
all
VAT
owing
with
your
tax
authority

10. The Gotchas
This
legislaJon
is
the
result
of
a
compromise…
v There
is
no
minimum
threshold
v You
need
to
store
all
data
you
collect
for
10
years
and
be
open
to
an
audit
from
any
country
in
EU
v There
are
different
invoicing
regulaJons
across
the
EU
v This
is
not
SEPA
–
There
will
be
no
extension!

11. NON COMPLIANCE
FINES
FROM
TAX
AUTHORITIES
JAIL
RESTRICTIONS
ON
BUSINESS
EXPANSION

12. What do you do next?

13. What does this mean for you?
You
need
to
start
planning
now…

14. Learn More
Recommend
resources
EU
Commission
website
HMRC
website
Taxamo
taxamo.com
blog.taxamo.com

15. 2 7 W E E K S
TO GO
ONLY