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EU regrets no VAT registration threshold on digital services MOSS


EU regrets no VAT registration threshold on digital services MOSS

An EU European Commissionaire has confirmed that the introduction of a VAT registration threshold for the new 2015 EU VAT changes on digital services would have been practical.

Andrus Ansip, Vice President for the Digital Single Market on the European Commission, explained that when the new rules were agreed to in 2008, a small minority of member states blocked plans for a threshold. He is drawing up new proposals for review after the summer, which could mean the introduction of the Euro 100,000 per annum threshold in 2016.

The admission came as latest figures for the number of companies registered for MOSS (see below) at only 12,000 across the entire EU. That is a tiny fraction of the target of 1 million.

Micro-businesses suffer with new e-services VAT rules

The lack of VAT registration threshold has mean many micro-businesses have had to VAT register for the first time in their own countries to collect VAT for sales in other countries. The problem is particularly acute for countries with relatively high registration thresholds, such as the UK with a threshold of GBP 82,000 per annum.

2015 EU VAT changes

The 2015 changes affected cross-border providers to consumers (B2C) of digital services such as apps, streaming videos or music and subscriptions to membership sites, dating sites and journals. From 1 January, such providers had to start using the VAT rate of the country of their consumer rather than their own country. So that providers didn’t then have to register in each country around Europe, the member states launched Mini One-Stop-Shop online portals (MOSS), where a provider can report and pay all VAT charged in a single, quarterly VAT return.


VP Global Indirect Tax
Richard Asquith
VP Global Indirect Tax Richard Asquith
Richard Asquith is VP Global Indirect Tax at Avalara, helping businesses understand their compliance obligations as they grow globally. He is part of the European leadership team which this year won International Tax Review's Tax Technology Firm of the Year. Richard qualified as an accountant with KPMG in the UK, and went on to work in Hungary, Russia and France with EY.