Delivery of Electronic Services to European Union Consumers After 1 January 2015
From 1 January 2015, telecommunications, broadcasting and electronic services will always be taxed in the country where the customer belongs* – regardless of whether the customer is a business or consumer – regardless of whether the supplier based in the EU or outside * For a business (taxable person) = either the country where it is registered or the country where it has fixed premises receiving the service. * For a consumer (non-taxable person) = the country where they are registered, have their permanent address or usually live.
The effects of this are as follows: EU BUSINESSES supplying to:
| 1. Business in another EU country | No VAT charged. Customer must account for the tax (reverse-charge mechanism). |
| 2. Consumer in another EU country | Must charge VAT in the EU country where the customer belongs (not where the business is based). Example A Polish customer downloading an App on his mobile phone from a Finnish supplier. The Finnish company must charge the customer Polish VAT. MOSS available |
| 3. Business or consumer outside the EU | No EU VAT charged. Example A Hungarian company sells an anti-virus program to be downloaded through its website to businesses or private individuals in Australia. NO VAT But if the service is effectively used & enjoyed in an EU country, that country can decide to levy VAT (option for Member States). |
NON-EU BUSINESSES supplying to:
| 1. Business in the EU | No VAT charged. Customer must account for the tax (reverse-charge mechanism). |
| 2. Consumer in the EU (telecoms, broadcasting or electronic services) | Must charge VAT in the EU country where the customer belongs. Example A person living in Barcelona pays a US company for access to American TV channels. The US company must charge the customer Spanish VAT. MOSS available |