US B2C digital providers will not get automatic transfer from VAT VoES to MOSS

Wed 14th Jan 2015

US and other non-EU providers of digital services to EU consumers will not be benefiting from automatic transfer of their old VoES EU VAT registrations to the new MOSS portals. This will catch-out non-EU companies already collecting and paying VAT and who had been assured that they would be automatically ‘grandfathered’ to the new MOSS reporting regime as part of the 2015 EU VAT changes on electronic, broadcasting and telecoms services.

2015 EU VAT digital services changes

Under the new 2015 rules, EU providers of digital services must now charge and collect the VAT rate of their customers’ locations. Previously, it had been where the provider was located. So that EU providers do not have to now VAT register in every country to report this change, new reporting portals, Mini One-Stop-Shop (MOSS,  have been launched in each member state where EU providers can register and make one quarterly filing to report and pay all VAT collected across the whole EU.

US and other non-EU providers already under new regime

Non-EU providers of electronic services had been operating under the new place of supply rules since 2003. They had a special single VAT registration regime too, called Vat On Electronic Services (VoES), through which they could file just one VAT return to cover all 28 member states.

Non-EU providers have been repeatedly told that they would be automatically transferred from VoES to MOSS from the start of 2015. However, a number of tax authorities in the past week have now indicated that this will now not happen. Non-EU providers will have to separately apply for a new registration with MOSS – like EU providers. They are free to pick any EU country, provided that they do not already have a permanent establishment in one county – in which case they must register with the MOSS portal of that territory.