VAT on digital services

UK businesses that sell digital services (such as eBooks or software) to nonbusiness customers in EU countries are now required to register for VAT in each of the EU countries where their customers belong and apply the correct local VAT rate to the sales. Alternatively, the business may register for VAT in just one EU country and use that VAT number to access the non-Union VAT MOSS scheme to report VAT charged on those sales.

There is no de minimis turnover threshold for non-Union VAT MOSS, so a UK business must report VAT due, even if it only makes one digital services sale to a non-business customer in an EU country. The VAT MOSS registration must be completed within ten days of the end of the month in which the first sale is made.

Action Point!
Register for VAT in the EU if you sell digital services to EU customers.