Businesses in the electronic services, broadcasting and telecoms sectors are being told to prepare for changes to EU VAT rules, which come into effect at the start of next year.<\/p>\n
The new regulations that will come into power from 1 January require suppliers of telecoms, broadcast and electronic services to charge VAT to non-business customers at the rate applicable in the country of consumption, rather than the country of supply.<\/p>\n
For many firms, including many of the UK\u2019s emerging tech start-ups, this would effectively mean registering and paying VAT in every country where they have a customer.<\/p>\n
To help manage this process HM Revenue and Customs have set up the Mini One Stop Shop which simplifies the complicated VAT process by allowing suppliers to register once in their own country and account for VAT in other EU countries where they have customers, but no business establishment.<\/p>\n
Firms can choose to either employ the MOSS option or go through the process of local VAT registration, depending on their business, but either way they need to take action now or potentially incur penalties and interest payments when the regulations comes into force.<\/p>\n
The changes are most likely to affect companies who provide services such as music and video downloads, electronic books,; online betting, gaming and auctions; automated training and any services where content is delivered over the internet; broadcast supply of television or radio programs and telecommunications services.<\/p>\n
But it could also affect small developers of apps sold via online market places, such as iTunes or Google Play, who have previously not had to worry about VAT charges in different countries.<\/p>\n
There have also been a number of warnings from people in the technology industry about the potential for fraud and abuse under the new system, which requires companies to identify where their customer is and apply VAT correctly.<\/p>\n
Some experts have even suggested that it might be possible for a customer to change their IP address in order to hide their true location in order to make savings, potentially leaving the supplier at risk of penalties for getting VAT charges incorrect.<\/p>\n","protected":false},"excerpt":{"rendered":"
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