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Value Added Tax (Supplies of Electronic, Telecommunication and Broadcasting Services) Order 2018

Friday, 21 December 2018

The Treasury advises that the above Order has been made and comes into operation on 1 January 2019, making changes to the rules for businesses making supplies of digital services to consumers across the EU. 

This Order makes amendments to Schedules 3B and 4A to the Value Added Tax Act 1996 and makes consequential amendments to the Act.

The Order will allow VAT-registered businesses, who are not established in the Island or EU and who make supplies of digital services to customers in the EU, to join the VAT Mini One Stop Shop (MOSS) scheme from 1 January 2019. Under current rules, businesses established outside the EU, who are VAT-registered for reasons other than supplies of digital services, are not permitted to use the scheme.

The Order also introduces a £8,818 threshold into the place of supply rules for businesses making sales of digital services. Businesses whose total sales of digital services across the EU do not exceed this threshold in the current and preceding year may apply the VAT rules of their home country, rather than those of the country where their customers are located.

The amendments make changes that correspond to those made to the equivalent United Kingdom legislation (the Value Added Tax Act 1994).

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