On 1 December 2016, the European Commission published several proposals relating to the Digital Market. For companies supplying telecommunications, broadcasting and electronic services (ESS) to B2C customers several changes are proposed.
As of 1 January 2015, telecommunications, broadcasting and ESS supplied to non-VAT taxable persons (B2C customers) are (also for EU suppliers) VAT taxable in the Member State in which the customer is established, has his permanent address or usual residence. A supplier of telecommunications, broadcasting and ESS can register for the Mini One Stop Shop (MOSS). The MOSS allows taxable persons supplying ESS to B2C customers in which they do not have an establishment to account for the VAT due on those supplies via a web-portal in the Member State in which they are identified (the so-called Member State of Identification).
The MOSS is available for taxable persons which are established in the EU (the Union scheme), as well as for taxable persons which are not established within the EU (the non-Union scheme). Without the MOSS, the supplier would be required to register in each Member State in which he supplies services to his customers. Proposed changes as of 1 January 2018
• Introduce a threshold of EUR 10,000 below which the place of supply of of ESS (optional) remains in the Member State of the supplier. Small business supplying ESS to B2C customers could therefor opt out of the MOSS;
• Invoicing rules of the Member State of Identification will apply. Currently the supplier of ESS should apply the invoicing rules of every EU Member State to which the supplies are made;
• Non-EU taxable persons with a VAT registration in a Member State can make use of the non-Union scheme. Currently non-EU taxable persons with a VAT registration in a Member State can not apply for the non-Union Scheme. However they can also not make use of the Union Scheme and should therefor register for VAT purposes in all Member States to which they make supplies;
• The period that records should be kept under the Union and non-Union scheme will be the period defined by the Member State of Identification. The current period that records should be kept is 10 years, which exceeds the record keeping requirement of most Member States;
• In case the total value of the ESS supplied does not exceed EUR 100.000 in the current and preceding calendar year, the presumption shall be that the customer is located, has his permanent address or usually resides at the place identified as such by the supplier on the basis of one piece of evidence. Currently the supplier of ESS needs at least two pieces of non-contradictory evidence.
Proposed changes as of 1 January 2021
• Extend the special scheme to other services supplied to non-taxable persons as well as to intra-Community distance sales of goods;
• Extend the deadline to submit the MOSS VAT return from 20 to 30 days following the end of the tax period (i.e. calendar quarter);
• Enable that corrections to previous VAT returns can be made in a subsequent return. Now this can only be done by amending the MOSS return of the tax period to which the corrections relate.