United Kingdom

Details

  • Service: Tax, Indirect Tax
  • Industry: Communications, Technology
  • Type: Business and industry issue
  • Date: 31/07/2013

VAT place of supply rules change significantly from 2015 

The place of supply rules relating to where VAT is both collected and remitted for certain services will be changing within the European Union with effect from 1 January 2015.

This change will affect businesses providing telecommunications, broadcasting or electronically supplied services to non taxable or private customers in EU Member States.

 

Currently, these services are taxed where the business supplier is established. However, in light of this change, businesses will need to charge and account for VAT in the EU country where the customer belongs/where the service is consumed.  

2015 VAT Changes Survey

 

Businesses need to plan ahead for these changes as time is running out. In an effort to understand how this is impacting UK businesses, we commissioned a survey of decision makers in the online, retail, telecoms and media industries during September and October 2014. 156 businesses responded including small-sized (less than £10m turnover), mid-sized (turnover of between £10m-£500m), and larger businesses (turnover of over £500m). The survey summarises how much the change is costing, plans for pricing and commercial strategy and how businesses will be complying. View the 2015 VAT Changes Survey.

What does this mean in practice?

Compliance/Admin: Whilst it may be an administrative easement for some businesses, MOSS will create its own issues and these must be considered. For example; MOSS audits can stretch back 10 years creating onerous record keeping obligations; some businesses may require complex IT interfaces for data collection and there will be no threshold so all supplies will be captured, no matter how small. As such, other businesses may prefer to use their existing VAT registrations or create new ones across the EU. There will be benefits and drawbacks to each compliance option and businesses will need to evaluate these in advance of 2015.

 

Pricing/Margins: The change will affect the VAT charged to the consumer, and therefore the margins throughout the supply chain.

 

IT/Systems: The changes will also affect the way in which VAT is administered and reported, requiring changes to IT systems and processes. 

 

A list of all the critical questions that businesses need to be asking themselves now can be found in our VAT 2015 e-brochure

Where could #VAT2015 impact your system?

 

The key impacted areas are highlighted below against the different work streams. There will be additional areas that are affected and this will be largely dependent on the type of business and/or the organisational structure of the business. 

How KPMG can help

How KPMG can help

Our team can help you to plan and achieve the steps necessary to be ready by 1 January 2015.  From deciding whether or not the Mini-One-Stop-Shop is the right choice for your business through to registering and submitting returns.

 

For more information on planning for the 2015 changes and how KPMG can help, please look to the right-hand banner of this page where you will find short videos explaining the changes, an e-brochure which explores the issues businesses will face, and useful links to the legislation and other relevant websites.

 

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Contact us

Amanda Tickel

Amanda Tickel

Partner, Indirect Tax

KPMG in the UK

020 7694 3780

amanda.tickel@kpmg.co.uk

Mike Camburn

Mike Camburn

Partner, Indirect Tax

KPMG in the UK

020 7694 8686

mike.camburn@kpmg.co.uk

Essential reading

View our VAT 2015 e-brochure

including useful tools such as:

  • 2015 stakeholder wheel
  • Timeline of legislation development
  • EU map and rates of VAT