Broadcasting, telecommunications and e-services; rule changes from 1 January 2015

[Phil H]

Early Xmas present? Think again

In case anyone out there sells downloads, online services, or software which I believe are classed as digital services, the VAT rules change on the 1st January 2015. This is important so if you sell say mp3 downloads or plug ins which given SellerDecks digital technology capability will no doubt be of interest to many SellerDeck Customers.

I would appreciate any discussion on likely impacts and how SellerDeck will respond to these requirements.

A summary heads up is

Who will be effected by the change?
- Providers of telecommunication services (sms/phone/internet access, etc)
- Providers of broadcasting (television and radio)
- Providers of electronic services (software downloads, cloud business, online gaming, certain e-learning, online payment services, etc)

What is going to change per 1 January 2015?
Based on this new VAT rule, your EU company must pay VAT in the EU country of establishment of your customers. In the above example, your Dutch company will have to pay different VAT rates applicable in each of the EU countries where your private customers are located. This means for example that your Dutch company will need to pay 21% Dutch VAT for the fees collected from your Dutch private customers, 25% Swedish VAT from your Swedish private customers and 19% German VAT from your German customers, etc. In principle this new rules mean that if you have private customers in each of the 28 EU countries, you will need to register for VAT in each of the 28 EU countries, file VAT returns in each of these 28 countries and charge local VAT with different rates in each of the 28 countries, etc.
This reference is explained here
http://www.foreigninvestments.eu/en/...ronic-services

HMRC info
You will need to register at the mini one stop shop (MOSS).
VAT Mini One Stop Shop (VAT MOSS)
To save you having to register for VAT in every EU Member State where you supply digital services, you may opt to use the VAT Mini One Stop Shop online service (VAT MOSS). This will be available from 1 January 2015, but you will be able to register to use it from October 2014.
Information
http://www.hmrc.gov.uk/posmoss/index....ac=VAT_POSjan

Where to register for MOSS
https://secure.hmce.gov.uk/ecom/voes...1F72B8FEEF98DA.)

If you have overseas operations (where you supply your services - please check) you may have to register separately in those countries if you already pay vat in the those countries.

Time to buy a box of asprin.

Good luck to all affected.

Phil Howell

[Paul Bulpit]

Based on this new VAT rule, your EU company must pay VAT in the EU country of establishment of your customers.

Similarly, out of interest and the opposite of your point, eBay Seller Fees (both listing and final) are to include VAT at the seller's country of residence rate, not Luxembourg 15% as at present.

This means that UK Seller Fees will increase for individual sellers and non-VAT registered traders: If a seller fee is currently £1.15 (including Luxembourg tax) from January that fee is to increase to £1.20 in UK & £1.23 in Eire.

Presumably (dunno?) G-AdWords may also be affected as they are invoiced from Dublin @ 23%, so the cost to non-registered UK advertisers may in fact fall.
______
Paul

[philrothwell]

Hi All,

Thanks for this.

I've asked someone to look into it to see if we should be making any recommendations or offering technical advice.

It will take a few days.