HMRC publishes guidance on EU digital VAT rules


The latest VAT guidance for businesses who make cross-border supplies of digital services to consumers in other EU member states has been published by HMRC

From 1 January 2015, the rules on EU VAT charges for digital sales to consumers, covering anything from ebooks to music and video games, online library services and newspaper websites, will fall under the new regulations.

This means that the place of taxation for these digital services will be the location of the consumer, not the location of the business supplying the service.

The HMRC guidance explains the scope and application of these rules, as well as the options businesses have to account for the VAT involved.

Small businesses with turnover below the UK VAT threshold of £81,000 will have to register for UK VAT to be able to access HMRC's central payment system, MOSS, the so-called Mini One Stop Shop, which allows companies to pay transeuropean VAT online once a year.

Under the new rules, where digital services are supplied on a business to consumer (B2C) basis, the supplier is responsible for accounting for VAT on the supply:

  • to the tax authority in the consumer's EU member state; and
  • at the VAT rate applicable in the consumer’s EU member state.

The guidance, VAT: businesses supplying digital services to private consumers, is available at

Essential reading

To read our exclusive article on the ten steps to achieving EU digital VAT compliance, by VAT experts Nicholas Hallam and Rob Janering of Accordance, click here

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