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Changes to VAT rules

On 1 January 2015, changes will be made to the European Union's VAT place of supply of services rules. This affects business to consumer (B2C) supplies of broadcasting, telecommunications and e-services (‘digital services’).

There are two changes to consider. The first affects the VAT place of supply rules. This will mean that supplies of telecommunications, broadcasting and e-services made by a business established in one EU member state, to a private consumer located in another member state (“intra EU B2C supplies”), will be taxed in the member state in which the consumer is located. These services are currently taxed where the business supplier is established. This change will ensure that in future they are taxed appropriately where they are consumed.

The second is the introduction of the VAT Mini One Stop Shop (MOSS). MOSS is an online service that will give businesses the option of registering in the UK to account for the VAT due in respect of B2C supplies of these services in all the other Member States (at the appropriate rate of tax in each state), by submitting a single return to HMRC.



The rules are still evolving. The ICAEW Tax Faculty has issued three Helpsheets  and is monitoring the situation. Businesses affected by the rule changes should consult their accountant or VAT advisor.