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.  

 

A “Mini One Stop Shop” (MOSS) will be introduced, giving both EU and non-EU businesses the option of VAT registering in just one Member State, through which they will account for VAT on supplies to their customers in other EU Member States. The alternative is for businesses to register and account for VAT (at the appropriate rate of tax) in every Member State in which they have customers.

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

How KPMG can help

How KPMG can help

We understand that there are many issues to consider with respect to 2015. KPMG is thinking about these changes from all angles, drawing expertise from across the firm’s services to provide issues-led offerings which are bespoke to your business.

 

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

Tools to help you plan for 2015

Tools to help you plan for 2015
View our VAT 2015 e-brochure including useful tools such as:
  • 2015 stakeholder wheel
  • Timeline of legislation development
  • EU map and rates of VAT