Finally, the VAT One-Stop Shop arrives

09.2014

From 1 January 2015, companies providing telecommunications, broadcasting, and electronic services across multiple EU Member States could benefit from the new VAT Mini One-Stop Shop (MOSS) system. This mechanism eliminates the need to submit separate VAT returns in each Member State where the company operates; a single VAT return filed in one registered Member State suffices.

Previously, a business active in 15 EU countries would require 15 different VAT numbers and corresponding administrations, incurring substantial administrative costs to submit the relevant VAT returns. The MOSS system is voluntary; however, once a Member State of registration is chosen, the selection is binding for the current and the two subsequent tax periods.

This regime shifts the place of taxation for these services to the location of the customer, requiring the application of local invoicing rules, exemptions, and rates. Companies must therefore be aware of the tax regulations in all countries in which they operate, even though they submit returns in only one Member State. In short, this reform provides a partial but significant simplification for specific types of business, marking a positive first step.

++ Published at the tax newsletter of the German Chamber of Commerce in Spain related to VAT news ++