Online merchants should be relieved that there is some help on the way before the new EU VAT changes kick in at the start of 2015. Help is coming in the form of the mini One-Stop Shop (or MOSS as it has become to be known) system.
The new EU VAT rules mean that merchants with B2C sales of digital services in the EU will now have to account for 28 different tax jurisdictions. That means updating systems to calculate and levy the correct VAT rate on their sales in the EU.
What is MOSS?
MOSS aims to ease the administrative burden for merchants. MOSS enables merchants to make just one VAT declaration per quarter that will cover all their sales in the EU. An EU merchant must register with their local tax authority for MOSS purposes. The member state will then become their member state of identification (MSI). The merchant - via a web portal - will then declare all the VAT collected on their EU sales per quarter.
The MSI will then distribute the relevant VAT to other member states on behalf of the merchant. A non-EU merchant can join MOSS as well. They just need to nominate one EU member state tax authority to be their MSI.
Cutting red tape
MOSS eliminates the need for a merchant to register with and declare the VAT collected with each and every EU tax authority. If a merchant decides against using MOSS, remember it is optional, then the above scenario is the only other avenue open to them.
Registering with every EU member state will require extensive knowledge of the 28 tax jurisdictions. Merchants will also require foreign exchange currency conversion on their payment pages. Remember that not all 28 EU member states are part of the Eurozone, ten member states still use their local currency.
All merchants - EU and non-EU - have the options of using the MOSS system. Once a merchant - no matter their size - has a B2C sales of a digital service in the EU then they come under the scope of the 2015 VAT changes.
The new EU VAT rules mean that merchants with B2C sales of digital services in the EU will now have to account for 28 different tax jurisdictions. That means updating systems to calculate and levy the correct VAT rate on their sales in the EU.
What is MOSS?
MOSS aims to ease the administrative burden for merchants. MOSS enables merchants to make just one VAT declaration per quarter that will cover all their sales in the EU. An EU merchant must register with their local tax authority for MOSS purposes. The member state will then become their member state of identification (MSI). The merchant - via a web portal - will then declare all the VAT collected on their EU sales per quarter.
The MSI will then distribute the relevant VAT to other member states on behalf of the merchant. A non-EU merchant can join MOSS as well. They just need to nominate one EU member state tax authority to be their MSI.
Cutting red tape
MOSS eliminates the need for a merchant to register with and declare the VAT collected with each and every EU tax authority. If a merchant decides against using MOSS, remember it is optional, then the above scenario is the only other avenue open to them.
Registering with every EU member state will require extensive knowledge of the 28 tax jurisdictions. Merchants will also require foreign exchange currency conversion on their payment pages. Remember that not all 28 EU member states are part of the Eurozone, ten member states still use their local currency.
All merchants - EU and non-EU - have the options of using the MOSS system. Once a merchant - no matter their size - has a B2C sales of a digital service in the EU then they come under the scope of the 2015 VAT changes.
