Mini One Stop Shop (MOSS)
A MOSS regulation already exists since 2015 for electronic services in a B2C relation. Electronic services, telecommunication services, radio and television services are deemed to be located where the consumer (whether or not a VAT taxable person) is established (domiciled or residing). As a consequence, EU VAT payers need to charge the VAT of the Member state of the consumer.
An optional One Stop Shop regulation allows businesses to account in their own member state for the VAT due in different EU member states, and this without additional VAT registrations.
From 1 January 2019, new simplification measures will apply, based on which EU service providers will still be able to account for the VAT due in their own member states. There are a number of requirements: the service supplier needs to be established in one the EU member states, non-taxable customers need to reside in another member state and the turnover out of these services may not exceed EUR 10,000.00 in a calendar year. EU service providers can, however, still choose to account for the VAT in the member state of the consumer. This choice needs to be maintained for at least two calendar years.
Extension of the MOSS regulation to distance sales
Distance sales of movable goods to private individuals are, in principle, subject to VAT in the member state of arrival of the goods, if the threshold, prescribed by that member state, was exceeded or if the supplier chooses to apply the distance sales regime before exceeding the threshold. This requires a VAT registration in that member state.
From 1 January 2021, the MOSS regulation will also apply to distance sales of movable goods to non-VAT taxable persons.
New simplification rules have also been adopted for EU businesses with a turnover not exceeding EUR 10,000.00 (turnover out of services under the MOSS regulation and the turnover out of distance sales have to be accumulated). Application of the VAT in the member state of consumption remains to be an option.
New portal for distance sales from third countries
From 1 January 2021, a new portal will be established for distance sales from third countries with a value below EUR 150.
Online platforms liable for VAT collection
Online platforms will be liable for collecting the VAT due on the distance sales of goods they have imported with a value of less than EUR 150 or supplies within the EU by a non-EU supplies to private individuals. This should make an end to unfair competition for EU businesses, as most goods that are imported for distance sales currently enter the EU VAT-free.
Elimination of exemption for small consignments from outside the EU
The European Council also decided to remove the exemption for small consignments from outside the EU with a value of less than EUR 22. These small consignments are currently imported free of VAT, but make the VAT system vulnerable for abuse.
Phased entry into force
The new rules will take effect in two different phases.
Ultimately from 2019:
Adoption of simplification measures for the supply of electronic services by EU suppliers, as a consequence of which the VAT rules of the supplier’s member state can be applied. The member states will have until 31 December 2018 to transpose the new rules into national legislation.
Ultimately from 2021:
- Extension of the MOSS regulation to distance sales, both intra-EU and from third countries
- Online platforms become liable for collecting the VAT on the distance sales they facilitate
- Elimination of the VAT exemption for small consignments from outside the EU.
The member states will have until 31 December 2020 to transpose these new rules into national legislation.
Questions regarding this subject can be addressed to one of our VAT specialists, or you can send an e-mail to [email protected] :