Businesses providing Electronic Services – VAT Consequences

We have provided below a quick synopsis of the recent changes to VAT for telecommunications, broadcasting and electronically supplied services but you can obtain more detailed information on the Irish tax office website.


Since the 01 January 2015, supplies of telecommunications, broadcasting and electronically supplied services made by EU suppliers to private, non-taxable individuals and non-business customers will be liable to VAT in the customer’s Member State.


Suppliers of such services will need to determine where their customers are established or where they usually reside.  They will need to account for VAT at the rate applicable in that Member State.  This is a requirement regardless of the E.U. state in which the Supplier is established or is VAT registered.


Consequently, suppliers may need to register for VAT in every EU Member States in which they have customers. As there are no minimum thresholds for VAT registration, making supplies to a single customer in one Member State will require VAT registration in that Member state.


In order to avoid suppliers having to VAT register in each of those countries, the supplier can choose to use the “Mini One Stop Shop” (“MOSS”) simplification system. Some of key features about “MOSS” are:


  • Under Moss, the supplier would submit returns and pay the relevant VAT due to each member state through the electronic web portal of one member state e.g. ROS in Ireland.
  • The Member State in which the MOSS registration is made is known as the Member State of Identification or “MSI”. This means the supplier is designating the MSI to be its single contact point for VAT identification, submitting VAT returns and paying the VAT due in all Member States for the supply of services following under MOSS. A business opting to use the scheme will register for MOSS in the MSI and will submit a quarterly return and the related VAT payment to the MSI. The MSI will then distribute the VAT due to the various Member States in accordance with the information on the return.
  • As already outlined, the MOSS returns are filed on a quarterly basis. Where a business opts to use MOSS, the business must retain records for 10 years from the end of the year in which the B2C transaction was made, regardless of whether the business subsequently stops using the MOSS scheme.


The above is a general commentary on the modifications to VAT for telecommunications, broadcasting and electronically supplied services.  If you think the above might be relevant for you, specialist advice should be obtained. OMB, Chartered Accountants has considerable experience in this area and we would be happy to discuss the various issues with you.