Based outside EU and selling online games

Will VAT Digital Rules apply

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UK company with overseas directors selling online games to B2C worldwide including UK and Europe.  

I assume Digital VAT Rules will apply irrespective where the company is being run from ?

Will Digital VAT rules change following Brexit ?

 

Replies (7)

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RLI
By lionofludesch
03rd Dec 2020 14:15

"Will Digital VAT rules change following Brexit ?"

Who knows ? It's taken us four years to agree nothing so far.

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By paul.benny
03rd Dec 2020 14:22

Isn't that one that we do know?
Today, the business is, or should be charging UK standard rate to UK customers and using MOSS to account for VAT in other member states.

From January, the UK MOSS disappears. I think the business will then have to VAT register in an EU member state but can use that country's OSS to account for VAT across the whole of the EU.

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VAT
By Jason Croke
03rd Dec 2020 14:55

Paul is correct.

At present, the UK business is making sales to consumers (B2C) and the MOSS (Mini One Stop Shop) threshold is £8,818 for EU consumers (ie, £5,000 sales to Spanish consumers and £5,000 to Italian consumers = £10,000 and so over the threshold). So it might that sales are under this and so no requirement to register for MOSS.

January, as the UK is no longer in the EU, the £8,818 MOSS threshold is no more, threshold is Nil for non-EU companies selling to EU consumers, so a MOSS registration would be required. As the UK no longer in EU, you cannot register for MOSS in the UK.

This is called "Non-Union" MOSS and you'd register for Non-Union MOSS in an EU member state of choice, maybe Ireland or Malta as they share a common language.

Location of company is irrelevant, MOSS was introduced to capture VAT on the billions of sales of apps, streaming and digital downloads to EU consumers and not subject to VAT as the seller (Google, Apple, etc) was not based in the UK.

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By rmillaree
07th Dec 2020 10:32

As an aside here

Does anyone have info ref goods dispatched to individuls to ec countries from 1st January as to whether there are any de-minimis thresholds under which "import vat" that the buyer would need to pay could be avoided presuming goods are shipped on basis buyer pays import duties. I have been told potentially each eu country could have its own rules in that regard but i am not aware of any such exemptions. Would be really handy if for example items below 25 euros to some countries don't have the associated hassle - particularly as the announced "distance sales" system similar to vat moss that should be live 1/1/2021 has been delayed 6 months - typical how we have like 5 years notice and we/eu still can't come up witha system that works day 1 of new rules.

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Replying to rmillaree:
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By paul.benny
07th Dec 2020 13:14

Ireland has a €22 threshold, below which VAT is not due on goods for personal use sent from outside EU. I don't know for other member states. Note that this figure includes delivery charges.

The threshold for determining whether distance sellers have to register is €35,000 or equivalent in most member states. I would assume that once sales in a country reach that level, it's no longer possible to take advantage of the exemption for low value shipments.

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Replying to paul.benny:
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By rmillaree
07th Dec 2020 16:25

Thanks for that - i have got off my lazy chair and found a nice table via google - seems like the 22 euros is a bit of a recurring theme.

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By MarkUltra
27th Apr 2021 09:02

That's sad to hear. But I don't think that we can anything with that at this point.

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