VAT on digital services (MOSS scheme)

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The Mini One-Stop-Shop (MOSS Scheme) allows you to supply the following services within the EU without the need to register in each EU country you supply to:

• telecommunication services
• television and radio broadcasting services
• electronically supplied services

Even if your business is based outside the EU you can benefit from the scheme, as there are two types of schemes offered: those based within the EU (Union Scheme) and outside the EU (non-Union Scheme).

Some of the rules are different for the Union Scheme and the non-Union Scheme.

Member state of identification

Union scheme

To register for the scheme, you must choose a member state of identification. This should be the EU country where your business is based (where the head office is located).

If your head office is located outside the EU and you have branches within the EU, you can choose any EU country where you have a branch established to be your member state of identification.

You can't include sales made to the member state of identification within the scheme; they must be accounted for using the normal taxation rules for domestic sales.

Non-Union scheme

This can be any EU country you choose.

Member state of consumption

The EU countries where you supply services to are known as member states of consumption.

Union scheme

When you supply a service, you must apply the rules (invoicing, cash accounting and bad debt relief etc.) from the member state of consumption.

Non-Union scheme

This can also include the country you have chosen as your member state of identification.
When you supply a service, you must apply the rules (invoicing, cash accounting and bad debt relief etc.) from the member state of consumption.

Member state of establishment

Union scheme

If your business has branches in other EU countries these are referred to as the member states of establishment. Supplies from these branches to a member state of consumption must also be included in the Mini One-Stop-shop tax return.

Supplies to the member state(s) of establishment cannot be included under the Union Scheme. They must be accounted for using the normal taxation rules for domestic sales.

Registration

You don't have to register for the MOSS Scheme, but registering allows you to supply certain services to EU countries without the need to register separately in each EU country.

If you do join, you have to apply the rules of the scheme for all EU countries that you supply to. You can't just choose to include some member states.
You can register for both of the schemes online via your member state of identification's portal.

Once your registration details have been received and validated, they will be stored in a database and forwarded to the relevant EU countries.

Normally registration starts on the first day of the calendar quarter after you request to join the scheme. For example, if you join MOSS on 20 July, your registration will start on 1 October. If needed, you can bring this date forward as long as you inform the member state of identification before the 10th day of the following month. For example, if you are already trading and supply a service on 5 March, you must inform the member state of identification that you wish to join the scheme before 10 April. If this is done, all the services you supply from 5 March will be covered by the scheme.

Deregistration

If you want to deregister from the scheme, you need to inform the member state of identification. This should be done at least 15 days before the end of the calendar quarter (Calendar quarters are January to March, April to June, July to September and October to December). You will be notified electronically when your request has been accepted. From this moment you can't use the scheme in any member state for 6 months.

Change of member state of identification

If you want, you can change your member state of identification. For the Union Scheme the new member state of identification must already be listed as one of your member states of establishment. For the non-Union Scheme, you can choose any EU member state.

You can make the switch on the same day but you must inform both the old and new member states of identification about your choice. This has to be done before the 10th day of the month after you make the change.

Exclusion from the scheme

You will be excluded from the scheme if:

• You notify the member state of identification that you no longer supply the relevant services
• You don't make any relevant supplies for 2 consecutive years
• You no longer meet the necessary conditions of the scheme
• You persistently fail to comply with the rules of the scheme

Quarantine period

In certain situations you may be excluded from using one or both of the Mini One-Stop-Shop schemes (known as a quarantine period), these include:

• if you decide to stop supplying services covered by the scheme – 6 months
• if you decide to voluntarily leave the scheme – 6 months 
• if you persistently fail to comply with the rules – 2 years

VAT number

Union Scheme

You should use the same VAT number you currently use for domestic VAT returns.

Non-Union Scheme

You will be allocated a VAT number by the EU country you have chosen to be your Member State of identification.

VAT returns

You have to submit detailed online quarterly VAT returns. Your VAT return should be submitted within 20 days of the end of each return period (calendar quarter). You can't submit a VAT return before the end of the return period. The information is then securely transferred from your member state of identification to the relevant member state of consumption.

These VAT returns are made in addition to your normal domestic VAT returns.

Check VAT rates

You can check VAT rates for the supply of telecommunications, broadcasting and electronically supplied services using the Tax Information Communication database.

Keeping records

You must keep a record of your activities under the MOSS Scheme, and you should be able to make the records available electronically without delay. You should keep a record of your returns for 10 years from the end of the year in which the service was supplied.

The following information must be included in the records you keep:

• the member state of consumption to which the service is supplied
• the type of service supplied
• the date of the supply of the service
• any subsequent increase or reduction of the taxable amount
• the VAT rate applied
• the amount of VAT payable indicating the currency used
• the date and amount of payments received
• any payments on account received before the supply of the service
• where an invoice is issued, the information contained on the invoice
• the name of the customer, where known to the taxable person
• the information used to determine the place where the customer is established or has their permanent address or usually resides.

More information about the MOSS Scheme is available in the VAT MOSS portal.