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EU VAT MOSS €10,000 threshold

  • 2015 MOSS
  • 04 December 2016 | Richard Asquith

EU VAT MOSS €10,000 threshold

The European Commission has proposed that a VAT registration threshold for cross border sales of electronic services be introduced in 2018.  The move will benefit thousands of micro-businesses who had be drawn into the EU VAT net in 2015 following the introduction of the Mini One-Stop-Shop on B2C e-services rules.

The threshold is likely to be €10,000.  In addition, there will be limited requirements on identifying the country of residence of customers for providers below €100,000 foreign turnover per year.

EU VAT MOSS thresholds

Since 2015, EU companies selling electronic services to EU consumers have been required to charge the VAT rate of their customers’ country of residence. This VAT is then declared and paid through a special ‘MOSS’ online portal with the provider’s tax authorities. This collected revenues are then automatically distributed to the relevant EU countries.

This change however required the provider to be VAT registered in their home country, and there is no VAT threshold for declaring EU e-services VAT. For countries with high thresholds – the UK has a £83,000 registration threshold – this meant micro-businesses had to first locally VAT register to be able to MOSS register too.

This has drawn in thousands of small businesses into the VAT net for the first time with little cost-benefit in terms of their costs compared to the VAT collected.

The new threshold would lift these companies out of the obligation, and encourage further digital trade for small companies.

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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.