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Telecommunications, broadcasting & electronic services

Rules applicable as from 2015

From 1 January 2015, telecommunications, broadcasting and electronic services will always be taxed in the country where the customer belongs* – regardless of whether the customer is a business or consumer – regardless of whether the supplier based in the EU or outside

* For a business (taxable person) = either the country where it is registered or the country where it has fixed premises receiving the service.

* For a consumer (non-taxable person) = the country where they are registered, have their permanent address or usually live.

For the definition of 'electronic services' see the Explanatory Notes below, in particular under points 1.3; 2.3.3; and 2.4.3.

 

The effects of this are as follows:

EU BUSINESSES supplying to:

Business in another EU country

No VAT charged. Customer must account for the tax (reverse-charge mechanism).

Consumer in another EU country

Must charge VAT in the EU country where the customer belongs (not where the business is based).

Example A Polish customer downloading an App on his mobile phone from a Finnish supplier. The Finnish company must charge the customer Polish VAT. MOSS available

Business or consumer outside the EU

No EU VAT charged.

Example A Hungarian company sells an anti-virus program to be downloaded through its website to businesses or private individuals in Australia. NO VAT But if the service is effectively used & enjoyed in an EU country, that country can decide to levy VAT (option for Member States).

 

NON-EU BUSINESSES supplying to:

Business in the EU

No VAT charged. Customer must account for the tax (reverse-charge mechanism).

Consumer in the EU (telecoms, broadcasting or electronic services)

Must charge VAT in the EU country where the customer belongs.

Example A person living in Barcelona pays a US company for access to American TV channels. The US company must charge the customer Spanish VAT. MOSS available

 

Basic Information for micro businesses

Basic information for micro businesses supplying electronic servicespdf

 

Questions & Answers

VAT changes from 2015

 

The Explanatory Notes for 2015

The Explanatory notespdf Choose translations of the previous link  have been prepared in order to provide a better understanding of the EU legislation relating to the place of supply of telecommunications, broadcasting and electronic services. These notes are not legally binding and only provide practical and informal guidance about how EU law should be understood and applied on the basis of the views of the Commission's Directorate General for Taxation and Customs Union. It is the product of collaborative work between the Directorate General for Taxation and Customs Union, Member States and businesses. These notes are a work in progress: it is not a final product, but it reflects the state of play at a certain point in time in accordance with the knowledge and experience available. Over time, it is expected that additional elements may be needed.

In 2015 the one-time registration scheme (mini one-stop shop) is:
  • extended to telecommunications and broadcasting and
  • made available to EU businesses too

 

One Stop Shop and Audit guidelines for 2015

A practical guidepdf Choose translations of the previous link  has been prepared in order to provide a better understanding of EU legislation relating to the mini One Stop Shop, as well as of the functional and technical specifications of the special schemes, as adopted by the Standing Committee on Administrative Cooperation (SCAC).

This guide is complemented by additional guidelines pdf Choose translations of the previous link  (available in all EU official languages, Russian, Chinese -and Japanese) on the audit of the mini One Stop Shop and IT-informationzip related to a suggested standard audit file for MOSS (mentioned in the additional guidelines under d)).

This guide and the additional guidelines on the audit of the mini One Stop Shop are not legally binding and only provide practical and informal guidance about how EU law and EU specifications are to be applied on the basis of the views of the Commission's Directorate General for Taxation and Customs Union.

These guidelines are the result of collaborative work between the Directorate General for Taxation and Customs Union and Member States.

These guides are work in progress: it is not a final product, but it reflects the state of play at a certain point in time in accordance with the knowledge and experience available. Over time, it is expected that additional elements may be needed.

 

Information on selected national VAT rules

Information on national rules applied in Member States for the use of the mini one-stop shop (MOSS) can be found in this report. Definitions and explanations on the scope of the report can be found in the overviewpdf, which also includes a summary table of applicable VAT rates, as well as information on use and enjoyment rules, and B2C invoicing obligations across Member States. However the Commission cannot guarantee that all the information contained in the report is in conformity with European law.

Additionally the Tax Information Communication database (TIC) provides information on (1) invoicing rules in EU countries, (2) VAT refunds – information requirements in the EU country of refund (3) VAT Rates in EU Countries.

 

National contact points for 2015 EU VAT changes

See the list of contact pointspdf provided by Member States for the 2015 EU VAT changes.

Disclaimer:Member States have designated contact points with a view to the 2015 changes. These points are set up only to facilitate the contact with national administrations on matters relating to the 2015 changes. Such contact will not automatically bring a solution for potential cases of double taxation. The designated contact points should only be used for that purpose and other VAT questions will be disregarded by Member States.

 

Other information

Communication activities of Member States on 2015 VAT changes pdf(88 kB)

 

Rules applicable until the end of 2014

Supplies into or from the EU

Type of service transaction

VAT payable in ("place of supply")

Telecoms/broadcast/electronic services from:

  • outside the EU to a customer in the EU or
  • inside the EU to a customer outside the EU

Country where customer belongs (has their main business or fixed premises, their permanent address or usually lives). In some cases, subject to a 'use and enjoyment' override

 

The effects of this are as follows:

EU BUSINESSES supplying to:

Business or consumer outside the EU

Usually no EU VAT charged. But if the service is effectively used & enjoyed in an EU country, that country can decide to levy VAT.

 

NON-EU BUSINESSES supplying to:

Business in the EU

No VAT charged. Customer must account for the tax (reverse-charge mechanism).

Consumer in the EU - telecoms or broadcasting services

Must charge VAT in the EU country where the service is effectively used and enjoyed.

Consumer in the EU - electronic services

Must charge VAT in the EU country where that consumer belongs (is registered, has their permanent address or usually lives)

 

Supplies between EU countries

Type of service transaction

VAT payable in ("place of supply")

Telecoms/broadcast/electronic services supplied within the EU

B2B – EU country where the customer belongs B2C – EU country where the supplier belongs

 

 

Legislation before and after 1 January 2015

Sales to final consumers – overview

RULES until 31/12/2014Telecommunications, broadcasting & electronic services (1)

Services supplied by/to

EU consumer in EU country 1

EU consumer in EU country 2

Non-EU consumer(3)

EU supplier (EU country 1)

Taxable in EU country 1

Taxable in EU country 1

No EU VAT

EU supplier (EU country 2)

Taxable in EU country 2

Taxable in EU country 2

No EU VAT

Non-EU supplier

Taxable in EU country 1(2)

Taxable in EU country 2(2)

No EU VAT

(1) One-time registration (MOSS) available for electronic services.
(2) Taxable in country of effective use & enjoyment, if this is not the country where the customer belongs.
(3) Unless used in a country that applies the effective use & enjoyment rules.

 

RULES from 2015Telecommunications, broadcasting & electronic services

Services supplied by/to

EU consumerin EU country 1

EU consumerin EU country 2

Non-EU consumer(2)

EU supplier (EU country 1)

Taxable in EU country 1

Taxable in EU country 2(1)

No EU VAT

EU supplier (EU country 2)

Taxable in EU country 1(1)

Taxable in EU country 2

No EU VAT

Non-EU supplier

Taxable in EU country 1(1)

Taxable in EU country 2(1)

No EU VAT

(1) One-time registration (MOSS) available.
(2) Unless used in a country that applies the effective use & enjoyment rules.

 

Changes to one-time registration scheme (MOSS) from 2015

Online declaration/payment For supplies to consumers, both EU and non-EU businesses can use a web portal in the EU country where they are VAT-registered to declare and pay the VAT due in their customer's EU country.

Council Directive 2008/8/EC – place of supply of services (see Article 5)

Council Implementing Regulation (EU) No 1042/2013 – place of supply of services pdfCouncil Implementing Regulation (EU) No 967/2012 – obligations under the one-time registration scheme (MOSS) pdfCommission Implementing Regulation (EU) No 815/2012 - standardised information for registrations and returns

 

Preparing for the change

Report on feasibility of new rules 2015

The European Commission published a reportpdf Choose translations of the previous link  to the Council on the feasibility of applying the new VAT rules for telecom, broadcasting and electronic services as of January 2015. The report describes the action taken in the last six years to prepare the implementation of the new rules, ensure legal certainty and facilitate business compliance.

Events related to the new rules

 

Online presentationon 2015 changes