Menu visibility control

Video

Events

Startup Surgery

Most Recent

FinTech

New FinTech VC Motive Partners to launch in London

Investments

ClickMechanic lands $1m in funding round led by Forward Partners

News

Deliveroo to hire over 300 UK tech workers in London

Press Releases

Chimni calls for the UK proptech community to work more closely with the housebuilding industry
Blockchain Conference: Blockchain Expo announces Berlin and North America dates
Neyber calls on government to cut excessive credit costs for UK employees

If I sell online across the EU, are there any VAT issues?

European Union

Dear Doctor, If I sell online to customers in other countries in the EU, are there any VAT issues I need to consider?

Michael O'Brien says...

twitterlinkedinFacebookgoogle_plustwitterlinkedinFacebookgoogle_plus

If you sell B2B, no UK VAT should be due on the sale. The sale will be outside the scope of UK VAT and the customer will have the responsibility to self-account for VAT in its own EU country under what is called the ‘reverse charge’. Ideally you should obtain and quote your customer’s EU VAT registration number on your sales invoice to demonstrate that the supply is to a business customer. EC Sales Lists will need to be filed as well as your usual VAT return declarations.

However, if you are selling to the general public or entities not in business in EU countries, VAT will need to be charged by you in the country where your customer belongs. This affects anyone providing services in the BTE sector – that’s Broadcasting, Telecommunications and E-commerce – where the customer is in another EU Member State and is not a business. The first issue therefore for a supplier is to determine whether the service supplied is one which falls within this new rule, introduced in January this year.

Supplies caught by this rule mean that a B2C supplier must either register for VAT in each country it supplies, no matter its turnover there, or use a simplification option. This simplification is called ‘MOSS’, the Mini One Stop Shop. The supplier has to apply for a MOSS registration and can then accesses a portal on HMRC’s VAT registration site, accounting for any sales to other Member States through this portal.

Doctor, doctor, I’ve just registered for VAT, can I reclaim VAT I incurred before I registered?

The plus side of MOSS is that it should make it easier to account for the VAT on such sales rather than having to register in what could be 27 other countries. The downside of the new rule is that it applies to ANY such qualifying services supplied to non-business customers, so charities, educational establishments and possible certain government departments for example could be regarded as B2C supplies and so give suppliers liability to apply the rules. Can your system determine whether your customer is in business?

One final point to make is that suppliers of some digital services such as apps might sell through an intermediary such as App Store or Google Play, rather than directly to the customer in another country. If that is the case, unless the intermediary makes it absolutely clear that the supplier is making the sale to the customer, the intermediary will be responsible for accounting for the appropriate VAT on the sale.

Michael O’Brien is a partner at accountancy firm Kreston Reeves looking after accounts, outsourcing, technology and international 

Enter your e-mail address to receive updates straight to your inbox

* indicates required
Send me news on...
twitterlinkedinFacebookgoogle_plustwitterlinkedinFacebookgoogle_plus

Editor's picks

London skyline

New FinTech VC Motive Partners to launch in London
posted 2 hours ago

ClickMechanic

ClickMechanic lands $1m in funding round led by Forward Partners
posted 5 hours ago

November 27th 2015


Photo by  ©Vicki Couchman 
07957226911
vicki@vickicouchman.com

Deliveroo to hire over 300 UK tech workers in London
posted 5 hours ago

Business

Sheffield-based Faradion raises £1.3m from Mercia Technologies
posted 6 hours ago

swansea

Tech in Wales: The December 2016 roundup
posted 8 hours ago

Juro image 1

LegalTech startup Juro gets $750,000 in Seed funding
posted 16 hours ago