Guide to VAT rules for supplies of digital services to consumers in the EU

UK businesses selling digital products and services to consumers in the EU must account for the EU VAT due based on the country of the consumer. 

From the 1st January 2021, it is possible to register for a Non-Union VAT MOSS (mini one stop shop) scheme in an EU member state (of your choice), which enables you to report all of your EU VAT sales in a single VAT return. 

A common option is to register in the Republic of Ireland due to the English language benefits.

Under the Non-Union VAT MOSS, UK businesses must record for each country the total sales made and VAT collected in that EU country, along with the rate of VAT that has been applied. Note that the rate of VAT depends on the rate that applies in the EU country where supplies are made and not the EU country of registration.

The Digital Services Threshold (which was £8,818) is no longer available to UK suppliers of B2C Digital Services from 1st January 2021. This means as soon as a covered digital service is provided to an EU consumer, the UK business will need to account for the EU VAT (either by the Non-Union VAT MOSS) or direct with the relevant EU country.

We have many clients selling digital services to EU consumers. Whilst we don’t offer a Non-Union VAT MOSS service ourselves, we can refer you to a company who offers this service. 

Please contact us if you would like further information.