If your company sells digital goods or services to individuals in the UK and/or EU countries, it may need to register for VAT. It may need to register even if the business is not based in the UK or its turnover is below the VAT registration threshold.

This is a relatively new requirement that was brought in on 1 January 2015. It means that if your customer is an individual, VAT is to be paid according to the rules of the country where the customer belongs, not the country the seller is based in.

The rule applies to any digital goods and services, including e-books, software, programs and their remote update, telecommunication services and broadcasting. If any of your products come in digital form and can be purchased online in the UK and / or EU countries, it is likely that the company should pay VAT on these sales.

To simplify the procedure, VAT MOSS (which stands for Value Added Tax: Mini One Stop Shop) was introduced so that sellers could just pay VAT in one country (UK), instead of having to register for VAT in every EU country. The business registered on VAT MOSS quarterly submits a single VAT return to the tax authority (HMRC), HMRC then distributes VAT to relevant countries.

How can we help?

If uncertain, we can provide an advice whether your business is liable to this particular VAT. We can help with VAT and VAT MOSS registration. We also provide services on calculating and reporting VAT MOSS for digital businesses. Please call us and we will be happy to help.

Still have questions?

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