From 1 January 2015 the VAT place of supply for telecommunications, television / radio broadcasting and electronically supplied services (TBE Services) provided to non-taxable customers will be where that customer is established.
The objective is to ensure VAT is charged as much as possible in the country where services are consumed.
Non-taxable customers cannot self-account for VAT and so EU companies providing services will need to determine:
- If the services they are providing fall under the definition of TBE services
- The status of their customer (taxable / non-taxable)
- Where their customer is established
- What the appropriate VAT rate is in the country where the customer is established
- That their accounting, billing and IT systems will be able to meet the new requirements
An EU company can register for VAT in each Member State of the EU in which its customers are established. However, this would place a considerable administrative burden on the business, so the EU Commission has proposed a Mini One-Stop Shop (MOSS). This will allow an EU company to submit quarterly returns and pay VAT due to each relevant Member State using the web portal of one Member State, where the business has its place of establishment (the Member State of Identification).
Non-EU businesses are already subject to place of supply rules which ensure VAT is charged where the services are consumed. The current VAT on E-Services scheme will be replaced by MOSS. The Member State of Identification for businesses which are established outside the EU, but have a fixed establishment(s) in the EU, is any Member State in which it has a fixed establishment or, where it has no fixed establishment, any Member State.
The place of supply for non-TBE services provided to non-taxable customers will continue to be the place where the supplier is established.
The Irish Revenue is currently working on its MOSS system and it is expected that registration for MOSS will open from 1 October 2014.