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Germany 2015 EU B2C electronic services VAT conflicts with EU Directive

  • Sep 2, 2014 | Richard Asquith

Germany 2015 EU B2C electronic services VAT conflicts with EU Directive

German is one of the latest EU member states to adopt the January 2015 changes to the EU VAT Directive on the place of supply rules for electronic, telecoms and broadcast services to consumers. However, key differences on the use and enjoyment rules have emerged for non-EU suppliers.

The German Parliament approved the changes to the VAT law at the end of July, which includes the creation of a German Mini One Stop Shop (MOSS) portal for German digital consumer services providers to report their EU VAT to. This will help manage the change in the place of supply and VAT liability from the country of the provider to the country of the customers. So, for example, a digital services (online subscriptions sites, downloadable games, music, videos and telecoms and broadcast services etc) will now have to charge the VAT rate of their consumers’ location in the EU instead of German VAT at 19%.

German use and enjoyment rules vary from EU

However, one key difference has emerged in the German rules compared to the intentions of the EU VAT Directive. For Germany, the place of supply may change again for non-EU providers if a customer goes short term to an third country. So for example if a US provider’s customer is normally ordinarily resident in the UK, then 20% UK VAT applies on supplies of digital services. But if the customer goes on holiday to Germany, under the German rules 19% German VAT applies for any services the consumer uses whilst there through their mobile phone or tablet etc.

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 can be contacted at: He is part of the European leadership team which won International Tax Review's 2020 Tax Technology Firm of the Year. Richard trained as an accountant with KPMG in the UK, and went on to work in Hungary, Russia and France with EY.