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Posts Tagged ‘VAT Moss’

What on earth is VAT MOSS? A new species of plant??

Tuesday, February 2nd, 2016

In an attempt to make life easier for businesses who sell digital products into the EU and need to charge VAT at the local EU country rate, the government established the VAT ‘Mini One Stop Shop’. Sounds rather fun I know, rather like a American drive through or drug store. Sadly, it is not quite the case and instead you are offered an online portal aimed at simplifying things by offering you the opportunity to register your business for the VAT scheme just once rather than having to register in every single country you will be supplying your digital products to. You can then submit just a single return.

Note: even if you are below the UK VAT threshold for having to register for VAT ( £81,000 for 2014-15), you still have to charge VAT as above for your cross border sales. However, this does not mean you have to charge your UK customers VAT.

Copyright 2016 Goburo

Picture Copyright 2016 Goburo

Digital on-line sellers: have you got to grips with the new VAT rules?

Tuesday, February 2nd, 2016

The new VAT rules have been in effect for over a year now and yet not many businesses are aware of them. In a nutshell a business may have to pay VAT on its sales even though it is not registered for VAT AND at a higher rate than the UK! How is this possible? In order to stop global companies from basing themselves in countries with lower tax rates, the lawmakers decided to create a level playing field for UK businesses by making them pay VAT on sales of digital products to the EU  at the rate applicable in the country they are selling to!

So how do you know if the rules apply to you? Find out in 5 easy steps:

  1. Determine whether you are supplying a “digital service” (because if it isn’t, the general place of supply of services rules will apply).
  2. Determine the status of your customer ie, business or non-business. If it is a non-business, the rules apply
  3. Determine the place of supply (ie, the member state).
  4. Determine whether the supply must be taxed at the member state’s standard or reduced VAT rate, or whether it is eligible for any VAT exemptions (eg, most member states exempt betting and gaming).
  5. You need to identify the place where your consumer is based, has their permanent address, or usually resides. This will be the member state where VAT on the digital services supply is due. So if, for example, a UK citizen is an ‘expat’ who works or lives most of their time in Spain, then you, as the person supplying digital services to that consumer, should be charging Spanish VAT on those services and not UK VAT.

There is a handy flow chart to help you decide whether the rules apply to you or not here.

For more information go to the government hub here

 

Beginner’s guide to new VAT rules on digital products

Wednesday, January 21st, 2015

You may have recently seen articles in the press regarding the new ‘VAT Moss’ rules and wondered what on earth it is all about. The idea is that where digital services are supplied on a business to consumer basis, the supplier is responsible for accounting for VAT on the supply to the tax authority at the VAT rate applicable,in the consumer’s EU member state. This applies even if the supplier is not VAT registered

VATThe aim is to create a level playing field for UK businesses by removing the current competitive advantage of EU member states with lower rates of VAT.

So how do you know if the rules apply to you? Find out in 5 easy steps:

  1. Determine whether you are supplying a “digital service” (because if it isn’t, the general place of supply of services rules will apply).
  2. Determine the status of your customer ie, business or non-business. If it is a non-business, the rules apply
  3. Determine the place of supply (ie, the member state).
  4. Determine whether the supply must be taxed at the member state’s standard or reduced VAT rate, or whether it is eligible for any VAT exemptions (eg, most member states exempt betting and gaming).
  5. You need to identify the place where your consumer is based, has their permanent address, or usually resides. This will be the member state where VAT on the digital services supply is due. So if, for example, a UK citizen is an ‘expat’ who works or lives most of their time in Spain, then you, as the person supplying digital services to that consumer, should be charging Spanish VAT on those services and not UK VAT.

There is a handy flow chart to help you decide whether the rules apply to you or not here.

For more information go to the government hub here

PS ‘Moss’ stands for ‘mini one stop shop! No moss was harmed in this ruling!