Be careful, from 1st January 2015, tax rules for telecommunications, broadcasting and electronic services will change !
From 1st January 2015, the new regulation for VAT on telecommunications, broadcasting and electronic services in the European Union, will come into effect.
Businesses in the EU will now have to account for the VAT in the EU country where the consumer is based, no matter where the customer belongs.
For example, if a French company sells Videos on Demand on its website to consumers in Belgium, the VAT rate will be the current VAT rate in Belgium, being 21 %. The French company will have to declare and pay the VAT to Belgian administration.
The aim of this regulation is to regulate competition between electronic services providers, not only inside the European Union but also worldwide. Indeed, low tax countries will no longer be given advantage, and American providers, which previously did not have to pay VAT, will now be taxed.
What kind of products are concerned ?
Telecommunications, broadcasting & electronic services are concerned by this new regulation.
For example, telephony services, Internet service providers, audiovisual programs, downloaded applications, music and dematerialized games, e-books etc.
What about B to B supplying ?
EU and non-EU businesses that supply to business in another EU country will not have to charge VAT.
But the customer will have to account for the tax (reverse-charge mechanism).
EU businesses that supply to non-EU businesses will not have to not charge VAT, but if the service is used in an EU country, that country can decide to levy VAT.
How will Businesses declare VAT ?
A web portal, the « Mini one Stop Shop », also called MOSS, was set up.
This simplified procedure allows EU and non-EU businesses to register for VAT in one EU country, regardless of how many other EU countries they are supplying. That country collects and distributes the VAT on behalf of all the other countries – charged at the applicable national rate depending where the customer belongs.
Businesses can register since 1st October 2014, and will have to declare VAT on the « MOSS » in accordance with the following agenda, and note later :
– 20th April 2015 for the first trimester (period from 1st January to 31st March)
– 20th July 2015 for the second trimester (period from 1st April to 30th June)
– 20th October 2015 for the third trimester (period from the 1st July to 30th September)
– 20th January 2016 for the fourth trimester (period from the 1st October to 31st December)
More information about :
– the Mini one Stop Shop
– the Directive 2008/8/CE (see article #5)