Important changes to the VAT Mini One Stop Shop (“MOSS”)

Digital services within the EU

Where a business supplies digital services (media, apps, online books, etc) to consumers in EU countries, it is required to account for local country VAT based on where the consumer is located. It would therefore be necessary for a business to register in each Member State where digital sales to consumers arise. To simplify this process and avoid large compliance costs, a company can register for the Mini One Stop Shop scheme (MOSS) instead.

MOSS means that companies do not need to register with tax authorities in every EU country it sells to. Instead, the company registers for VAT, files VAT returns and makes payments in one single EU country. The business must apply the rules of the MOSS scheme to all consumer sales in all EU.

Changes to MOSS following Brexit

MOSS is an EU scheme and therefore as the UK has left the EU, MOSS registrations for services will no longer be available in the UK. UK service providers selling to EU consumers must register in one of the EU countries to continue using MOSS under the Non-Union scheme. This can be done in any EU state, however as with many VAT processes, there are countries where this process is quicker which may be crucial given the end of the transitional period.  

When the UK was part of the EU, UK companies were able to make use of the €10,000 / £8,818 threshold. Following Brexit this is no longer available and therefore any sale of digital services to consumers in the EU may require a company to register for the Non-Union VAT MOSS scheme.

If your business is making supplies of digital services within the EU and you would like to discuss these rules further, contact us on 01903 234094 to speak to a member of our tax team.