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  • EU VAT: the new mini one-stop shop

    Thursday 03rd of April 2014 2:58:05 PM

    The mini one stop shop – or MOSS – has been created by the new EU VAT rules. The plan as set out in the EU’s VAT Directive is to have a MOSS available in each of the 28 EU member states.

     

    Why create the mini one-stop shop?

    The MOSS system was created as the EU authorities realised that it would be an administrative nightmare for companies to deal with all 28 EU tax authorities. The MOSS system, therefore, allows a company to choose one tax authority to register with. The company files its quarterly returns and declares all its B2C sales in the EU. The selected tax authority will then proceed to distribute the relevant VAT to the other EU member states where B2C sales took place.

    Who operates the MOSS?
    A company with broadcasting, telecommunications or electronic services B2C sales in the EU must register with one member state’s MOSS. This member state is known as the Member State of Identification (MSI). The MSI controls their own MOSS thus collecting and distributing VAT to other member states based on the amount of e-service sales there. Once registered the MSI does the rest. For example, if you register with the UK MOSS and you have e-service sales in France, Germany and Belgium then the UK tax authorities will distribute the VAT due to the French, German and Belgian tax authorities on your company’s behalf.

    So, when registered, what information must be provided to the MOSS?
    As already stated quarterly returns must be filed with the selected MOSS. The tax authority does the rest in relation to distributing the correct VAT to the correct EU member state. Once registered with a MOSS the company does not have to worry about this which is a great weight off their shoulders in pure compliance terms.

    Anything else?
    When a non-EU company registers with a MOSS they will receive a VAT Identification number. EU companies continue to use their existing VAT numbers and can use a web portal for registration.

    UK applications for their MOSS will be accepted from October 2014.
    Registration will take effect in the first quarter after an application. Applications in February 2015 will be registered from April 2015; applications in May 2015 will be registered from July 2015, etc.

    Can I opt out?
    The new EU VAT rules also make allowances for de-registration. If a decision is made to de-register then the company must inform their selected tax authority (or member state of identification) 15 days before the end of the calendar quarter. Once de-registered a company cannot use the MOSS for two calendar quarters thereafter. Remember, registration with the MOSS is optional. It is, though, highly recommended. If you have sales in numerous EU member states then it is preferable to have one return rather than declaring in several EU tax jurisdictions.

    The tax authority in the UK, HM Revenue & Customs, have allowed registration with their MOSS from October. This is a sensible undertaking as it is an attempt to avoid a bottleneck of registrations come January 1, 2015 when the new EU VAT rules kick in. In his Budget 2014 speech the Chancellor of the Exchequer George Osborne revealed the introduction of the UK MOSS and outlined just how important a service it can be for companies that decide to register.

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