What is the definition of electronic services - 2015 B2C EU VAT

The 1 January 2015 changes to the EU place of supply rules on electronic, broadcast and telecoms services require EU providers of these services across borders to change to the VAT rate of their customer’s country of residence. Previously, the provider used the VAT rate of their country of residence.

EU definition of e-services for VAT

The EU VAT Directive was modified by an implementation regulation which contains the standard definition of e-services. This characterises e-services based on the following criteria for a supply for a fee / subscription:

  • A service – as opposed to physical goods
  • Information technology-based
  • Provided electronically – through the internet, copper or fibre optic cable and satellite
  • The supply is fully automated – only minimal human intervention

Examples of e-services

The implementing regulation provides detailed examples and guidance on the types of paid-for services which are considered electronic, and split into five categories:

1. Supply of video, music, games, lotteries and other games of chance

  • Downloads of films or broadcasts to PC’s, laptops and phones
  • Online or downloads of games, including remote players
  • Supply of music, films, betting, broadcasting
  • Jingles, ringtones and music

2. Website services

  • Self-help website services
  • Automated maintenance and support of sites
  • Hosting of sites
  • Internet service providers
  • Online data warehousing and memory services
  • Banner ad blockers

3. Software services

  • Software services provided over the internet (Software as a Service ‘Saas’) through downloads on cloud-based distribution
  • Downloads of printer and other peripheral drivers
  • Firewalls and other filters for computers
  • Antivirus software downloads
  • Accountancy and anti-virus packages

4. Supply of distance teaching

  • Automated Distance learning and teaching
  • Automated learning programs over the internet
  • Workbooks completed by students online

5. Provision of text, images and databases

  • Downloads of designs – components, knitting patterns etc.
  • E-books (e.g. Amazon Kindle)
  • Online banner ad’s
  • Subscriptions to online blogs, journals or newspapers
  • Membership fees to online clubs, journals or dating websites
  • Online market places for goods and services – listings
  • Phone or PC download images, screensavers and photography
  • Downloads of reports, financial analysis or market data and guides
  • Data manipulation and calculations via the internet or other electronic networks

What is not an e-service for VAT purposes?

The European Commission has also provided some guidance on what is not an e-service. Crucially, the use of e-mails to deliver the service does not automatically qualify the service as electronic.

The implementation regulation singles out the following services provided for a consideration as not being e-services for the new VAT regime:

  • Services provided to EU VAT registered businesses
  • Telecoms and broadcasting services
  • Physical goods where the ordering is done by the internet or e-mail
  • DVDs, CD-ROMs, CDs, memory sticks etc for information, games or books
  • Professional advice given via e-mail or the internet
  • Designing covers or contents for eBooks, brochures and other literature
  • Live teaching provided over the internet
  • Offline data services
  • Tickets bought for live events, theaters, restaurants etc. purchased through the internet


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