From 1 January 2015 the VAT rules for place of supply changed in the EU for sales of digital services from businesses to consumers (B2C).
The rules created a new system called the Mini One-Stop Shop (MOSS) for the declaration of VAT collected on these digital service supplies. This system enables a business to register in one EU Member State for the purpose of declaring all of the VAT collected on their digital service supplies during each quarter. This means you only need to send a single VAT MOSS Return, each calendar quarter. You don’t have to declare the VAT due separately in each EU member state.
There are 2 types of VAT MOSS schemes:
Union VAT MOSS
To use the Union VAT MOSS scheme in the UK, your business must meet the following criteria :
What to do if business turnover is below UK VAT threshold?
If your business turnover is below the UK VAT threshold you still need to register for UK VAT to use the Union VAT MOSS scheme. If you only register for UK VAT so you can use the VAT MOSS scheme, you’ll only need to submit nil UK VAT Returns.
If you need to reclaim VAT paid on business expenses though, these can be claimed only by using the UK VAT Returns (instead of submitting a nil return). You can’t reclaim these on your VAT MOSS Return.
Registration and return submission timelines
You must register for VAT MOSS by the 10th day of the month after your first digital service sale.
The deadlines for filing the VAT MOSS returns are:
The rules created a new system called the Mini One-Stop Shop (MOSS) for the declaration of VAT collected on these digital service supplies. This system enables a business to register in one EU Member State for the purpose of declaring all of the VAT collected on their digital service supplies during each quarter. This means you only need to send a single VAT MOSS Return, each calendar quarter. You don’t have to declare the VAT due separately in each EU member state.
There are 2 types of VAT MOSS schemes:
- Union VAT MOSS - for businesses based in the EU, including the UK
- Non-Union VAT MOSS - for businesses based outside of the EU
Union VAT MOSS
To use the Union VAT MOSS scheme in the UK, your business must meet the following criteria :
- be based in the UK, or be a non-EU business with a fixed establishment in the UK
- be registered for UK VAT
- supply digital services to consumers in the EU
What to do if business turnover is below UK VAT threshold?
If your business turnover is below the UK VAT threshold you still need to register for UK VAT to use the Union VAT MOSS scheme. If you only register for UK VAT so you can use the VAT MOSS scheme, you’ll only need to submit nil UK VAT Returns.
If you need to reclaim VAT paid on business expenses though, these can be claimed only by using the UK VAT Returns (instead of submitting a nil return). You can’t reclaim these on your VAT MOSS Return.
Registration and return submission timelines
You must register for VAT MOSS by the 10th day of the month after your first digital service sale.
The deadlines for filing the VAT MOSS returns are:
- 20 April - for first quarter ending 31 March
- 20 July - for second quarter ending 30 June
- 20 October - for third quarter ending 30 September
- 20 January - for fourth quarter ending 31 December
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