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EU VAT on B2C digital services after 1 July 2021 – MOSS & OSS

The EU’s e-commerce VAT package has now updated the reporting rules for VAT on digital services as well as reform goods reporting via One-Stop Shop (OSS).  EU and non-EU providers of broadcast, telecoms and electronic services (TBE) that have been using the Mini One-Stop Shop (MOSS) return have now been switched to the (OSS) return from 1 July 2021.

Essentially, OSS extends MOSS e-services reporting to now include pan-EU sales of traditional, digital services and distance selling of goods to consumers.

Check our global VAT and GST on digital services tracker to see which other countries have introduced indirect taxes on electronic services to consumers.

EU €10,000 place of supply OSS digital services threshold

Note: EU providers have a single pan-EU reporting threshold of €10,000 on services and goods for reporting. This was first introduced to the MOSS regime in January 2019. If their sales to other EU states (excluding their domestic sales) are below this threshold, they may instead follow their country of residence VAT rules and reporting process.

OSS replaces MOSS for digital services

MOSS has now been withdrawn. Instead, such providers have been automatically switched to the new OSS quarterly reporting. OSS can also be used by facilitating marketplaces for digital services where the transaction payment, fulfilment and terms are controlled by a marketplace. For digital service providers, there are no material changes.

Non-EU suppliers will use the non-Union version of OSS. Like the old MOSS, suppliers are free to elect to chose any EU member state to register for their e-services reporting. This becomes their Member State of Identification. If you need to complete EU OSS returns, our VAT Filer can accurately populate any country submission with verified VAT or GST data from our VAT Calculator or VAT Auditor services.

EU MOSS reporting e-services since January 2015

Since January 2015, providers of TBE services to EU consumer have been required to charge and collect VAT at the rate of their customer’s country of residence. They could (optional) use the quarterly MOSS return to report and remit VAT for all 27 member states in just one country – their EU country of residence or country of identification in the case of non-EU providers. MOSS returns were filed quarterly, and the tax office was then responsible for distributing. It was due by the end of the month following the reporting quarter end. This reporting simplification therefore eliminated the requirement to VAT register in each country. Non-EU providers of BTE services registered under the non-Union MOSS. They are now able to use the non-Union OSS.

Initially, there was not VAT registration thresholds. But following negative feedback, a €10,000 pan-EU e-services threshold was introduced in 2019 (see above).

Reporting MOSS VAT information

The rules amongst the 28 member states (UK was still part of the EU for most of the period of the MOSS return) including submitting the following information by country of sale:

  1. the applicable VAT rate(s),
  2. the total value (VAT excluded) of qualifying supplies carried out during the reporting period,
  3. the total amount of VAT per rate,
  4. the total amount of VAT due for the relevant tax period on a country-by-country basis and
  5. the total amount of the entire VAT due for the relevant tax period.

This information is presented separately for (a) supplies of services, (b) intra-Community distance sales and (c) local distance sales where these sales are facilitated through the use of an electronic interface.

The above information was reported in €, with the European Central Bank rate used for any conversions.

What are Telecoms, Broadcast and Electronic (TBE) services?

The EU scope of TBE services include:

Telephony services Broadcast Services Electronic Services
  • Landline telephone
  • Mobile phone services
  • Internet telephony (e.g. Skype)
  • Data service provided through land or mobile

 

  • Broadcast television
  • Broadcast radio
  • Online provision of the above
  • Cable provision of the above
  • Satellite provision of the above

 

  • App’s
  • Download and online games
  • E-books (e.g. Amazon Kindle)
  • Download and streaming music and videos
  • Cloud computing, including software provided as a service (‘SaaS’)
  • Subscriptions to online journals, newspapers etc
  • Membership fees to online associations, fan clubs or dating service

 

 

Digital services OSS invoice requirements

Provider which chose to use the OSS return for digital services to EU consumers are not obliged under the EU VAT Directive to invoice consumers. However, if the provider is submitting their OSS in a country that has opted to require consumer invoicing, then the provider must follow these rules.

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