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VAT rates on 2015 electronic bundled, mixed and composite supplies

  • 2015 MOSS
  • 28 November 2014 | Richard Asquith

VAT rates on 2015 electronic bundled, mixed and composite supplies

Suppliers of bundled or mixed supplies of different types of products or services should be alert to applying the correct VAT rate. For the 2015 EU VAT B2C changes on electronic services this is particularly important.

Bundled VAT rates is the group term for the two different categories of mixed product or service supplies. These help sellers understand which VAT rates they should apply where there are different types of supplies in the same transactions, but subject to different VAT rates.  You can review 2015 EU VAT rates here.

Two types of bundled VAT rates:

  1. Composite – this is where a product is provided as a purely ancillary part of the main supply. For example, printed instruction books (0% in UK; 4% in Italy) provided with software (20% in UK; 22% in Italy). The instruction books would have no value alone, so the entire supply is classified at the full standard VAT rate.
  2. Mixed – where two or more parts of the supply are quite distinct. For example, an online subscription (20% UK VAT; 21% Belgian VAT) with a print edition magazine (nil UK VAT; 6% Belgium). Since these have equal use as separate supplies, the VAT amount must be separated and calculated at the correct VAT rates.

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.