On 1st January 2015 there was an important change to the VAT rules for businesses involved in the supply of digital services (telecommunications, broadcasting and electronically supplied services) to private individuals and non-business customers within the EU.
Now the ‘place of supply’ of these services to individuals and non-business customers is the country where the customer is located as opposed to the previous rules which stated that it was the country where the supplier was based.
UK businesses will now have to register for VAT in each EU member state or take advantage of the VAT Mini One Stop Shop (VAT MOSS). A business registered for VAT MOSS will have to submit a quarterly VAT return detailing its sales of these services in other EU member states. The MOSS returns will be calendar quarterly (March. June, September and December) and will be due along with any payment by 20th day after the quarter end. This will be in addition to the requirement for businesses to submit their normal VAT return and therefore increases the administrative burden for business owners but much less than if they had registered in each EU member state.