Consultation: Draft legislation - VAT supplies of electronic, telecommunication and broadcasting services

Released 11 September 2018

HMRC is seeking comments on draft legislation making changes to the rules for businesses making sales of digital services to consumers across the EU.

HMRC have published two draft statutory instruments for technical consultation. The draft statutory instruments make two changes to the rules for businesses making sales of digital services to consumers across the EU:

To introduce a (sterling equivalent) €10,000 threshold for total supplies to the EU in a year of sales of digital services. This change means that businesses will only be subject to the VAT rules of their home country if their relevant sales across the EU in a year (and the preceding year) falls below this threshold. If the businesses total taxable turnover is below the UK VAT registration threshold they will be able to de-register from VAT. Businesses can continue to apply the current rules if they so choose.

To allow non-EU businesses, which are registered for VAT for other purposes, to use the Mini One Stop Shop (MOSS) scheme to account for VAT on sales of digital services to consumers in EU member states. This group are currently excluded from using MOSS - a business facilitation system.

The consultation closes at 5pm on 8 October 2018. Responses should be sent by email to: marie.williams@hmrc.gsi.gov.uk. A tax information and impact note has also been published at Policy paper VAT: changes to the supply of digital services 2019.

For more information, see Open consultation Draft legislation: VAT supplies of electronic, telecommunication and broadcasting services orders 2018.

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