What is VAT MOSS?
By Alan Rajah, Lawrence Grant, Chartered Accountants
Effective 1 January 2015, if your business sells digital services (broadcasting telecommunications & e-services) to EU consumers, you have to account for local VAT based on the rules of the jurisdiction where the customer used the service.
Historically, VAT on BTE services was due at the rate applicable in the seller’s country. This enabled certain businesses to save money by locating themselves in countries with low VAT rates. The aim of the new rule is to create a level playing field. This change only affects B2C supplies.
However, to relieve businesses of having to register for VAT in every EU member state in which they have a relevant customer, they can now register instead for VAT MOSS (Mini One Stop Shop).
There are separate MOSS schemes for businesses based outside the EU and those within.
Identifying (and solving) the appropriate tax rules to deal with digital business has also become the top priority in the Base Erosion and Profit Shifting (BEPS) Action Plan.
VAT MOSS in the UK
Instead of registering for VAT with all the different EU member states, you can choose to register with HM Revenue & Customs (HMRC) to use their “MOSS”, and report and pay the VAT you charge under these rules.
MOSS returns are prepared each calendar quarter. VAT MOSS returns can only be used to reclaim VAT incurred attached to VAT MOSS qualifying sales.
The VAT MOSS return does not include any UK sales as these are declared on a UK VAT return.
Once the MOSS return is submitted and paid, HMRC will then send documentation and payment to the relevant country’s tax authority.
Alan RajahLawrence Grant, Chartered Accountants, London, UK
T: +44 208 861 75 75
Lawrence Grant, Chartered Accountants provides UK and international accountancy and tax services to companies and individuals considering UK investment opportunities. They combine a thorough evaluation of your business with expert advice, planning and projections to help create a tax-efficient business.
Alan Rajah has over 20 years’ experience of working on international tax, consulting on a wide range of clients from large multinational corporations to SMEs and individuals. Alan’s focus is on international structuring but he also advises individuals coming to or leaving the UK, as well as VAT and BEPS. His main focus is assisting individuals and corporate organisations in minimising their tax bills and providing strategic analysis and business development techniques in increasing revenue streams. Alan also deals with both corporate and personal tax planning for UK and international clients and specialises in implementing onshore and offshore tax structures for clients by the utilisation of offshore trust and companies. Alan is a member of the GGI International Tax Practice Group and the Global Chairperson of the GGI Business Development & Marketing Practice Group.
Published: Spring 2017 l Photo: Colourbox.de - Mark Agnor