VAT changes for businesses supplying broadcasting, telecommunications and eservices to private customers

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On 1st January 2015, changes will be made to the European Union (EU) VAT place of supply of services rules. This affects businesses who supply broadcasting, telecommunications and eservices to private customers (“intra EU B2C supplies”).

Currently, these services are taxed where the business supplier is established. From 1st January 2015 the place of supply will be the Member State in which the private customer is located (where he has his permanent address or usually resides). 

EU Businesses making the aforementioned supplies will have to charge VAT in the EU Member State of the customer and at that Member State’s VAT rate.  Local VAT registration is the default scheme but to save registering for VAT in every EU Member State the VAT Mini One Stop Shop online service (VAT MOSS) allows registration in the Member State where your business is established – which will be referred to as the Member State of Identification (MSI). This gives you the option of declaring and paying the VAT due for all Member States on one single return (MOSS can only be used to declare output VAT). The VAT MOSS service will be available on 1st January 2015 but registration for the service is available from October 2014.

Under both registration schemes you will have to:

1)    Identify your customers as Business to Business (B2B) or B2C and then

2)    Identify the location of your B2C customers and charge VAT at the rate of the country in which the customer is located.

Contact Imelda Prendergast, OSK with your comments and queries or call 01 439 4206. Imelda Prendergast is Director OSK Contracting and OSK Small Business Support.

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