Changes to the treatment of business-to-consumer supplies of digital services

Changes to the rules for businesses making sales of digital services to consumers across the EU are covered in draft statutory instruments for technical consultation.

First there will be a threshold of €10 000 or its sterling equivalent for total supplies to the EU in a year of sales of digital services. As a result businesses will be subject to the VAT rules of their home country only if their relevant sales across the EU in a year (and the preceding year) fall below this level. If the business’s total taxable turnover is below the UK VAT registration threshold it will be able to de-register from the tax. Businesses can continue to apply the current rules.

Second non-EU businesses that are registered for VAT will be able to use the mini one-stop shop (MOSS) scheme to account for VAT on sales of digital services to consumers in...