EU introduces B2C e-services foreign VAT threshold

Tue 21st Aug 2018

Member states of the European Union have been updating their VAT laws to introduce simplified B2C electronic services foreign VAT thresholds.

From 1 January 2019, small providers of digital services will be able to charge the VAT of their home country on sales to other EU states’ consumers below a threshold of €10,000 per annum. This is instead of reporting any sales to consumers in other EU states at the local rate, and declaring the VAT through the single Mini One-Stop-Shop VAT return introduced in January 2015. The provider will also not have to comply with the foreign VAT invoicing rules – instead using their domestic laws.

Electronic services liable to VAT include income from: streaming media; games; e-books; cloud storage; downloads; membership on online sites; apps; and e-journals. The rules also extend to broadcast and telecommunications services.

Countries which have recently passed legislative changes include: Austria; Finland; and Germany.

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