Brexit is having a major impact on digital businesses both in the UK and outside.

The VAT Mini One Stop Shop (MOSS) system is a simplification measure used by digital businesses supplying telecommunications, broadcasting and electronic services throughout Europe to consumers.

The VAT MOSS service is used to declare VAT due on sales to EU-based customers and to remit the VAT to the relevant tax authority. The scheme that was introduced in January 2015 when the EU amended its rules so that cross-border B2C digital supplies are taxed in the member state of consumption. Rather than requiring the supplier to register for VAT in each country, MOSS allows the supplier to submit a single return for each quarter to the Member State in which it is registered.

US and other non-EU companies without an EU presence providing these services are required to register and account for VAT under a non-union MOSS registration. As a non-union member, they can opt to register in any EU country.

Many non-EU companies have registered in the UK for the system. However, once the Brexit transitional period ends on 31st December 2020 those businesses will not be able to use the UK’s VAT MOSS service to report EU sales any longer.

The final return period for the UK’s VAT MOSS system should be the period ending December 31, 2020. Note that digital businesses registered with UK VAT MOSS should only include sales made before January 1, 2021, in their final UK return.

For sales made after the transitional period, these businesses will need to register for either:

  • VAT MOSS in any EU member state by the 10th following the month of their first sale (i.e. February 10 if sales in January) to an EU customer (this registration cannot be made before January 1, 2021), or

  • Register for VAT in each EU member state where they sell digital services to consumers, where applicable.

If you are a non-EU business currently operating a non-union MOSS registration through the UK then you need to plan for action in January 2021.

For assistance in preparing to register Ireland for non-union MOSS contact us today.