EU 2018 Simplifications of e-services EU VAT compliance

Part of the EU c-commerce VAT reform package agreed in 2017 are simplifications for small businesses selling electronic, telecoms and broadcast services (‘e-services’) to consumers in other EU states. The changes to the place of supply rules were implemented from 1 January 2019, and include two threshold rule changes plus two further simplifications:

1.     Introduction of a €10,000 per annum threshold below which an EU established supplier of e-services may charge and report VAT on sales to EU consumers under the rules of the supplier’s state. This shift’s the place-of-supply to the supplier’s state of establishment and eliminates the requirement to report the sales under the consumer country rules, charge the local correct VAT rate and report the VAT due through the Mini One-Stop-Shop (‘MOSS’) return, a single pan-EU VAT filing for e-services introduced in 2015.

2.     Introduction of single piece of consumer residence evidence threshold requirement for suppliers of pan-EU e-services below €100,000 sales per annum. Generally, at least two non-contradictory pieces of evidence to establish the correct country of residency of the consumer must be collected by the supplier.

3.     The right for e-services suppliers using MOSS to apply the VAT invoicing rules of their country of residency, instead of their consumers’.

4.     Withdrawal of the block to non-EU suppliers of e-services to use the non-Union MOSS scheme if they already have a standard EU VAT registration in place.