Location of customer MOSS 2015

To ensure that the correct country’s VAT rate is applied under the new EU VAT B2C rules on broadcasting, telecommunications and e-services, it is fundamental that the location of the customer – place of supply – is determined.

As the taxable entity, the responsibility of establishing the customer’s location falls to the supplier. Therefore measures must be put in place to capture the necessary information that will help to establish where the digital service has been consumed.

Five Presumptions for choosing location of residency

To limit the burden on the supplier, the 2015 Directive on the changes has provided five ‘presumptions’ to determine the location of the customer. This means that if the supplier can determine just one of these specific locations then they can presume the location is correct without requiring further evidence. They are as follows:

  • If a customer’s presence is required for the service (e.g. a Wi-Fi hotspot or internet café) the customer is presumed to reside at that location.
  • If the services are provided on board transport travelling between EU member states (for example boat or train), the consumer location is deemed to be the place of departure for the journey. [Note that this presumption refers only to the provision of that specific service, ie an internet connection. If for example a consumer used an internet café to download music, the music is not necessarily deemed to be ‘used’ at that location. In this instance – known as an ‘over the top service’ – two pieces of non-contradictory information are required to determine the customer’s location]
  • If the services are provided through a fixed landline, the customer is presumed to reside where the landline is installed.
  • If the services are provided through mobile networks, the customer is presumed to reside in the same country as that of the SIM card code
  • If the services are provided using a decoder / viewing card, the customer is presumed to reside where the decoder / card is located / sent

This information is not submitted to the tax office as part of the MOSS declaration, but the supplier must maintain a record of the one presumption they have used as evidence, and make it electronically available to any EU member state tax office upon request and without delay. This information can be requested retrospectively for a period of ten years, so suppliers must ensure they have the capability to store the relevant data for this length of time.

If these presumptions not available – two pieces non-conflicting information

There are situations where the above presumptions will not be applicable:

  • The information is not available; or
  • If the customer is traveling abroad and uses the services in another country than their normal residence.

In these situations, then the provider must instead capture and retain two pieces of non-contradictory information as evidence of the location of the customer. In practicle terms, because the is a risk that these two pieces of information will conflict as so the transaction be blocked, many providers are planning to capture three pieces of evidence.

Note that if the supplier holds two pieces of non-contradictory evidence, these are sufficient even if another piece of contradictory evidence is found. The supplier must only keep the two non-contradictory pieces on record as evidence.

Examples of evidence that may be used include:

  • The billing address of the debit or credit card used by the customer
  • If a digital service is downloaded through a customer’s telephone landline then the country code of that line will identify the customer’s location
  • The country code of a mobile phone SIM card will confirm the customer’s location.
  • The IP address of a computer will verify the location of the customer
  • Any other form of relevant information, for example, a loyalty card, etc.

Additionally, if the supplier feels that the presumed location is inaccurate then they can rebut the specific presumption with the provision of three non-contradictory pieces of evidence.

In the event that the supplier has difficulty in gathering two or three pieces of non-contradictory information they should nevertheless continue to seek further evidence. As a last resort priority should be given to the location of where the service is consumed.

It may be the case that the evidence collected is conflicting with no defining location provided. In such circumstances priority is given within the information collected with the supplier deciding which of the information is most reliable. For example, the residential address of the individual might be considered the most accurate location of the customer.

It is extremely important to correctly capture the location of the customer as this determines the place of supply and the applicable VAT rate. Failure to do so correctly will result in either an under or overpayment of VAT and potential fines from the Tax Authorities.


To summarize, the supplier must use one of the presumptions to determine the location of the customer with no further clarification required. If the supplier does not have any information from the list of presumptions then they must use two alternative pieces of non-contradictory information instead. Finally, if the supplier has reason to doubt the location given from the presumed list then they must provide three pieces of non-contradictory information as evidence for their rebuttal.