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10,000 Euro VAT MOSS Registration Threshold

B2C Digital Sales to EU - is advice to not register for MOSS correct?

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Just when I was getting there, I've become thoroughly confused by the following interpretation of the VAT Place of Supply Threshold for Digital Services (from an article dated 3rd January 2021):

"What is VAT MOSS and does it affect UK Businesses after Brexit?

If your sales of digital services to the EU are less than 10,000 Euros, then you can’t register for the VAT MOSS scheme. Your business will need to follow the VAT rules for the country your business is based in. So a UK company will add 20% to its digital sales and report the amount of VAT using normal VAT arrangements."

https://www.crunch.co.uk/knowledge/tax/what-is-vat-moss-and-does-it-affe...

Surely a business making B2C EU digital sales can (and should) register for Non-Union VAT MOSS? Come to that is there any longer a Euro 10,000 registration threshold for UK businesses, given that we're now outside of the EU?  Is it me, or have Crunch got the wrong end of the stick? 

 

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By Matrix
06th May 2021 20:13

My understanding is also that the threshold is now nil. So it would be necessary to register for non union Moss by 10th of the next month following a digital sale to an EU consumer.

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By I'msorryIhaven'taclue
06th May 2021 20:50

Thank you Matrix, that's reassuring. I'm very grateful.

HMRC's guidance is quite silent on the matter, although I suspect that may be because their scribe didn't necessarily feel the need to state the obvious. By contrast, the EU VAT advice site lays down three very clear conditions (for reliance upon the Euro 10,000 exemption), one of which is that the supplier business must be established in a EU member state (and that's no longer us Brits!). Crunch's article appears to fly in the face of that.

Moot point (in my particular client's case), but I'm dubious about the article's later pearl of wisdom to the effect that in order for a UK business to register for VAT MOSS in (say) Eire or Malta that UK business must first of all be VAT registered in the UK. Based upon my trawl through the EU and HMRC VAT advice sites today I harbour doubts regarding the validity of that rudiment .

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Replying to I'msorryIhaven'taclue:
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By Matrix
06th May 2021 21:04

You are probably right, while you had to register for VAT to submit VAT MOSS returns, I don’t see why you would need to register for UK VAT before registering for non union VAT MOSS.

They should probably take down the article given they already say they don’t advise on this. I know enough to tell clients that I don’t either.

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Replying to Matrix:
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By I'msorryIhaven'taclue
06th May 2021 21:28

It's pants, isn't it?

Is it legal? I guess that's the Crunch question :)

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Jason Croke
By Jason Croke
06th May 2021 22:45

Agree with Matrix, for a UK trader there is a nil threshold, so a UK trader selling to an EU consumer triggers requirement to register for MOSS, and registration is in an EU member state, not the UK.

HMRC guidance is vague because MOSS is nothing to do with the UK. Would Spanish taxman known a UK business has sold €5 of apps to a Spanish consumer? Would HMRC care and/or report you to the Spanish?

No requirement to register for UK VAT either, that was an old rule that no longer exists post Brexit.

The article appears to be wrong, but as it was published on 3rd January 2021, there was still so much up in the air at that time.

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Replying to Jason Croke:
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By I'msorryIhaven'taclue
07th May 2021 09:37

Thanks Jason, that's very reassuring to hear.

The client had been lulled by the Crunch article, and I only compounded the problem by steering them towards HMRC's (non-) exposition of the matter. I'm looking forward to calling the client later, and might even let them choose between Ireland or Malta.

I guess the scenario will repeat itself for goods when OSS kicks-in this July.

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