The EU is to introduce a voluntary system for VAT accounting in respect of the B2C supply of digital services on 1 January 2015

1. VAT mini one stop shop (MOSS)
A simplification scheme relating to the changes to the place of supply rules
for business to consumer (B2C) supplies of digital services.

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Contents
Background to the MOSS 3
Digital services 4
Place of supply 5
MOSS registration 6
MOSS returns 7
Payments 8
Compliance 9
Key considerations 10
Contacts 11

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MOSS background
HANGE:
On 1 January 2015 the place of supply rules for business to consumer (B2C) supplies of
telecommunications, broadcasting and electronically supplied services (TBES) will change from where the
supplier of the services is located to the location of the consumer.
ONSEQUENCE:
VAT will be chargeable, at the applicable rate, in each of the Member Sates in which TBES are made.
HOICES:
Suppliers of TBES have a choice to either:
1. Register for VAT in each member state, potentially 27 registrations, or
2. Elect to register under an EU-wide scheme known as the MOSS.

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Broadcasting
• Television programs
• Radio programs
E-services
• Video on demand
• Apps
• Music downloads
• Gaming
• e-books
• anti-virus software
• on-line auctions
Telecommunications
• Sending or receiving signals by wire, radio, optical or
other systems.
• Fixed and mobile telephony, fax and connection to the
internet.
What are digital services?
Digital services include supplies that can be defined as broadcasting, telecommunications and e-services. HMRC acknowledge that
this is a rapidly evolving sector and so has provided a list of illustrative examples as follows:

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Establishing the place of supply
To enable VAT to be accounted for in the correct Member State, it is crucial to identify the place where the consumer is established.
This can be complicated in the realm of digital services.
Location
When determining the place of supply for digital services, the
following presumptions can be made:
• telephone box / telephone kiosk = where located
• wi-fi hot spot / internet café = where located
• Restaurant or hotel lobby = where located
• on board transport = the place of departure
• telephone landline = where landline located
• Mobile phone = county code of sim card
• decoder = postal address where sent/installed
Evidence
• If the place of supply determined by presumption must retain
evidence confirming location
• If rebut presumption then alternative evidence is required,
three pieces of non-contradictory commercial evidence
• If services not on presumption list then two pieces
Examples of accepted evidence include:
• Billing address of customer
• IP address of device
• Location of bank
• Country code of sim card
• Location of land line
• Other commercially relevant information

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Multiple establishments
• Business that have establishments in multiple
Member States can register and operate MOSS in
whichever Member State they choose
• MOSS cannot be used for supplies in any
Member State where a business establishment
already exists
• Instead, VAT will need to be accounted for
through that establishment's local VAT return
General
• Two schemes will be available:
–Union Scheme for EU based suppliers
–Non-Union Scheme for no-EU based suppliers
• Registration for both schemes will be available in
the UK from 1 October 2014
• Registration is voluntary
Alternative
• If decide against MOSS, will be required to
register for VAT in any Member State where a
supply of TBES services is made
• There is no de-minimis turnover threshold
• Therefore, required to register irrespective of the
value of supplies
VAT groups
• VAT groups entitled to register
• As a single taxable entity, supplies made by
members will be regarded as made by
representative member
• Law relating to VAT groups will be different in
each Member State
• Particular rules in relevant countries will need to
be examined in detail
De-registration from MOSS
• Wherever a business registers, it will have to
remain registered for a minimum of two years
• Businesses can voluntarily choose to leave the
MOSS scheme at any time, however will not be
allowed to re-join for two quarters
• If fail to meet the legal requirements for use,
automatically de-registered and excluded from
using MOSS for two years
Small businesses
• Businesses must already be registered for VAT
• Unregistered businesses trading below the VAT
threshold will not be able to use MOSS
• Instead, have to register and account for VAT in
the customers country
• Voluntarily registering for VAT in the UK could
be an option however will then need to account
for UK VAT on UK sales
MOSS registration

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MOSS returns
The currency
for UK returns
will be GBP.
Must only be used for
accounting for VAT on
the supply of TBES
services.
The electronic portal will allow
part completion of a return and
allow this to be saved for any
later amendments.
In periods where no
TBES services have
been supplies, nil
returns are required to
be submitted.
If using UK scheme, must
declare B2C TBES supplies
made from the UK to other
Member States. If have
registered fixed establishments,
a separate declaration is
required for supplies made
from such establishments.
The exchange rate used to
convert monetary values
to other EU currencies
will be published by the
European central bank.
Must only include
B2C supplies of
TBES.
Must be submitted
electronically within 20
days of calendar
quarter.
When the return is
submitted the system
will generate a unique
reference number.
Must not be
submitted before
the end of return
reporting period .
Must include the
total supplies for
each Member State
at their standard and
reduced rates.

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MOSS payments
Payments accepted electronically.
To be made by 20th of the month following
the quarter end.
Only deemed to have been made when
reached Member State's account in country of
MOSS registration.
One off payment only.
No payment plans or deferred payment
mechanisms.
No option of direct debit facility.

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MOSS compliance
MOSS returns will be subject to periodic audits by tax authorities in each
Member State where supplies are made. These audits will be co-ordinated
by Member State within which supplier is registered for MOSS and will
likely take place alongside ordinary VAT inspections. However inspectors
from Member State of consumption may attend.
MOSS records must be kept for a period of ten years from 31
December of the year during which the transaction was carried out.

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Key considerations
Are your supplies affected?
To register or not to register for MOSS?
Which Member State to register in?
How will you identify where your consumer is located?
What evidence will you be able to provide?
How will this affect your VAT compliance reporting?
Are your accounting systems ready for the changes?
Do your staff have the capacity to complete the additional reporting?
Grant Thornton has a Europe-
wide VAT service with over 100
experienced staff who can help
with the '2015 changes'.

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Contacts
Should you have any questions regarding the changes to to the place of supply rules for business to consumer (B2C)
supplies of digital services or wish to discuss any aspect of the Mini-One Stop Shop simplification scheme please get
in touch with your usual Grant Thornton contact or one of our specialists below.
Karen Robb
VAT Partner
T 020 772 82556
E karen.robb@uk.gt.com
Stuart Brodie
VAT Partner
T 0141 223 0683
E stuart.brodie@uk.gt.com
Mike Sheppard
VAT Partner
T 0121 232 5419
E mike.sheppard@uk.gt.com
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