EU VAT registration information – Guide to EU VAT registration

Mon Nov 25, 2013

European legislators hope that the new EU VAT registration system will act as a painkiller to the headaches of doing business in the EU.

EU VAT registration

The new Mini One-Stop Shop (MOSS) system has been set up to enable digital service providers make a single declaration for B2C (business to customer) VAT. From January 1, 2015, digital service providers will charge VAT in accordance with where their customer is located in the EU.

With MOSS the business can then report and pay VAT in one EU member state. The EU member state nominated by the business then distributes the VAT in accordance with where the businesses’ customers are located.

Businesses can still opt for multiple EU VAT registrations as MOSS is an optional scheme. The EU taxation authorities believe that MOSS will eradicate the administrative headaches associated with doing business in the EU, with its various VAT rates.

From January 1, 2015, businesses will have to identify the location of their customers and charge the relevant VAT rate of the EU member state.

Take a look at this blog post of ours for the best methods of geolocating your customers.

EU VAT registration: the mini one-stop shop (MOSS) scheme

MOSS, as stated, is an optional scheme which will allow e-service providers to declare and pay the EU VAT due in one EU member state (for EU businesses, this will be the member state where they are established) rather than where their customers are located.

Through MOSS a supplier will submit quarterly VAT returns to their member state of choice. The VAT payments will be made to that member state, which will then transmit the funds to the respective EU member states.

This scheme is intended to simplify the EU VAT compliance obligations for operators who would otherwise be required to have multiple VAT registrations.

Extension of one-stop shop scheme

The proposed MOSS is an extension of the one-stop shop system which applied (pre-2015) to non-EU suppliers of electronic services to EU consumers.

The pre-2015 system allowed non-EU traders who supply e-services to EU consumers, and which should charge and collect VAT in the country of the consumer, to choose a single EU member state (typically the one with the lowest VAT rate, i.e. Luxembourg) within which to register for VAT and to submit EU VAT payments.

With effect from January 1, 2015, this one-stop shop system (as modified) will apply to non-EU businesses which supply broadcasting and telecom services to EU consumers, and to EU businesses which supply taxable telecoms, broadcasting and digital services to EU consumers.

Note: Taxamo content is created for guidance only, please consult your local tax advisor.

Contact us to find out more about our solution