Electronic, telecommunications, and broadcasting services – Mini One Stop Shop (MOSS)
From 1 January 2015, new place of supply rules for electronically supplied services, telecommunications and broadcasting services to consumers located in the EU will be applicable. Simultaneously, taxpayers will have the possibility to opt for the use of the Mini One Stop Shop (MOSS) for these supplies of services in order to minimize their tax compliance burden (see further down).
Table of contents
- New Place of supply rules
- Mini One Stop Shop (MOSS)
- FAQs: Mini One Stop Shop (MOSS)
- Who is eligible to use MOSS?
- When is Austria Member State of identification?
- When does the EU scheme (Art 25a of the Austrian VAT Act) or the Non-EU scheme (Sec. 25a of the Austrian VAT Act) of the MOSS apply?
- How to register for the MOSS (EU scheme)?
- How to register for the MOSS (Non-EU scheme)?
- What is the deadline to register for the MOSS (EU scheme and Non-EU scheme)?
- Which services may be declared using the MOSS?
- How does the taxable person declare services to an EU Member State, where the taxpayer has a fixed establishment?
- How is the VAT return filed?
- What is the return period for MOSS returns?
- What is the deadline for handing in the VAT return?
- Is there an obligation to file VAT returns in periods where no supplies that are covered by the MOSS are carried out?
- What needs to be included in the VAT return?
- Which currency has to be used?
- How can VAT returns be corrected? How to deal with changes of the taxable base?
- How are payments facilitated?
- What is the deadline for payment?
- Which reporting obligations do taxpayers face when using the MOSS?
- Which record obligations do taxpayers face when using the MOSS?
- Is it possible to stop using the MOSS voluntarily?
- When will a taxpayer be excluded mandatorily?
- What are persistent failures to comply with the MOSS rules?
- When will the exclusion apply?
- What happens if a taxpayer moves his business establishment or fixed establishment?
- Can taxpayers use the MOSS to recover input VAT?
From 1 January 2015, electronically supplied services, telecommunications and broadcasting services will – in general – taxable at the customer’s location irrespective whether the customer is a taxable person (B2B) or a consumer (B2C).
Taxpayers providing services which are covered by these new rules will have to determine for every supply where their customer is resident. To minimize the resulting compliance burden, standardized presumptions are enacted EU-wide.
If electronically supplied services, telecommunications and broadcasting services can only be received at a certain location and the physical presence of the recipient of the service at that location is needed for the service to be provided to him (e.g. telephone boxes, access to internet for consideration via WIFI hotspots, internet cafés etc.), it is assumed that the customer is established or resides there.
If services are provided through a fixed land line, it shall be presumed that the customer is established or resides at the place of installation of the fixed land line.
The place of supply of services provided through mobile networks is determined by the mobile country code of the SIM card used when receiving those services.
Services for which the use of a decoder or similar device or a viewing card is needed and a fixed land line is not used, it is presumed that the customer is established where that decoder or similar device is located, or if that place is not known, at the place to which the viewing card is sent with a view to being used there.
In all other cases, the customer location has to be identified on the basis of two items of non-contradictory evidence. Such evidence is conceived to be – amongst others – the billing address of the customer, the IP address, bank details such as the location of the bank account used for payment or any other commercially relevant information.
The tax authority may contest these presumptions only where there are indications of misuse or abuse by the supplier.
Where electronically supplied services are supplied through a telecommunications network, an interface or a portal such as a marketplace for applications (e.g. Appstores), a taxable person taking part in that supply is presumed to be acting in his own name but on behalf of the provider of those services unless that provider is explicitly indicated as the supplier by that taxable person and that is reflected in the contractual arrangements between the parties. Similarly, this applies for telephone services provided through the internet (VoIP) (see further Art. 9a Implementing Regulation (EU) No 282/2011 as amended by Implementing Regulation (EU) No 1042/2013). This presumption may be rebutted under the following requirements which have to be fulfilled cumulatively:
- the invoice issued or made available by each taxable person taking part in the supply of the electronically supplied services must identify such services and the supplier thereof,
- the bill or receipt issued or made available to the customer must identify the electronically supplied services and the supplier thereof,
- a taxable person
- neither authorizes the charge to the customer or the delivery of the services
- nor sets the general terms and conditions of the supply
- these requirements are reflected in the contractual arrangements between the parties.
Such a supplier would be, e.g. a telecommunications company charging electronically supplied services to a consumer and simultaneously offering the telecommunications network.
MOSS provides the opportunity to register in one EU Member State (Member State of identification, MSI), declare all supplies covered by the special scheme and pay the VAT due on these supplies. If a taxpayer exercises the option for MOSS, there is no obligation to register, file tax returns and issue VAT payments in each Member States where electronically supplied services, telecommunications and broadcasting services are carried out.
The MOSS is optional and has to be opted for in due time. If the option is exercised, it is applicable for all supplies covered by the special scheme. Based on the fact whether a taxpayer is established within the EU, either the scheme (Art 25a VAT Act) or the Non-EU scheme (Sec. 25 VAT Act) may be used.
Input taxes cannot be deducted by using MOSS. Input deduction has to be effected by generally using the refund mechanism.
MOSS may be used by taxpayers who provide electronically supplied, telecommunication and broadcasting services to consumers in EU Member States if the taxpayer is neither established nor has a fixed establishment there. Moreover, the use of MOSS presupposes a VAT identification number and a registration in due time.
If a taxpayer is established in Austria, Austria will be its MSI. If a taxpayer is established outside of the EU but has a fixed establishment in Austria, similarly, Austria will be the MSI. If this taxpayer has another fixed establishment located in another EU Member State, the taxpayer may choose a MSI from the Member States where his fixed establishments are located (EU scheme).
If a taxpayer is established outside of the EU and neither has a fixed establishment in Austria, nor in any other EU Member State nor is he obliged to register in a Member State for VAT purposes, the taxpayer may freely choose Austria as MSI (Non-EU scheme).
A taxpayer established in Austria provides electronic services to consumers located in Germany and Italy. The taxpayer has a fixed establishment in Slovakia. If the taxpayer exercises the option to use the MOSS, Austria will be the Member State of identification (EU scheme).
A taxpayer established in Switzerland (=not an EU Member State) has a fixed establishment in Austria. If the Swiss taxpayer wants to use the MOSS, Austria will be the MSI. If the Swiss taxpayer had another fixed establishment in Germany – next to the fixed establishment in Austria – the taxpayer would be able to choose either Germany or Austria as MSI. The taxpayer will be bound by his choice for the current and two the two consecutive calendar years (EU scheme).
A taxpayer who is established in Switzerland with no fixed establishments in the EU and no obligation to register for VAT purposes in the EU may choose Austria as MSI (Non-EU scheme).
When does the EU scheme (Art 25a of the Austrian VAT Act) or the Non-EU scheme (Sec. 25a of the Austrian VAT Act) of the MOSS apply?
Taxpayers established in Austria or taxpayers established in third states (i.e. non-EU Member States) with fixed establishments in Austria may choose Austria as MSI (EU scheme). The Non-EU scheme applies where the taxpayer is neither established in the EU nor has a fixed establishment in the EU. In that case, the MSI may be chosen freely.
The registration process for the MOSS (EU scheme) is facilitated electronically via FinanzOnline.
The registration process for the MOSS (Non-EU scheme) is facilitated electronically via the portal established at the Austrian Ministry of Finance: non-eu-moss.bmf.gv.at.
If the taxpayer wants to use the MOSS and all requirements for exercising the option are met, the MOSS may be used from the calendar quarter following the registration.
If a taxpayer wishes to use the MOSS from 1 January 2015, he has to file his registration at the latest on 31 December 2014.
In case a taxable person supplies services covered by MOSS for the first time, the MOSS can apply as from the date of that first supply, provided the taxable person informs the Member State of identification of the commencement of his activities to be covered by the MOSS no later than on the tenth day of the month following that first supply of services.
A taxpayer commences to supply services covered by the MOSS on 12 October 2015 for the first time. If the taxpayer registers until 10 November 2015, he may use the MOSS from the date of that first supply.
Only taxed electronically supplied services, telecommunications and broadcasting services provided to consumers located in EU Member States where the taxpayer is not established and does not have fixed establishments may be filed via the MOSS.
How does the taxable person declare services to an EU Member State, where the taxpayer has a fixed establishment?
In Member States where the taxpayer is established and in the Member States where the taxpayer has fixed establishments, the regular procedures have to be followed (monthly/quarterly VAT returns and annual returns if applicable).
VAT returns have to be submitted electronically. Within the EU scheme, this is done by using FinanzOnline. Within the Non-EU scheme, the specific portal established at the Ministry of Finance has to be used.
The return period for the MOSS VAT returns is the calendar quarter.
All supplies covered by the MOSS which are carried out between 1 January 2015 and 31 March 2015 have to be filed in the VAT return for the first calendar quarter 2015.
The VAT return has to be submitted within 20 days following the end of the return period, i.e. by the 20th day of the following month.
The VAT return for the first calendar quarter 2015 has to be submitted at the latest on 20 April 2015.
Is there an obligation to file VAT returns in periods where no supplies that are covered by the MOSS are carried out?
If a taxpayer exercises the option to use the MOSS, VAT returns have to be filed even if no supplies which are covered by the MOSS are carried out (nil return). If such nil returns have been submitted for eight consecutive calendar quarters, the taxpayer will be excluded from the MOSS.
The VAT return needs to include:
- the VAT identification number (EU-scheme) or the identification number issued by the competent authority (Non-EU-scheme)
- the turnover covered by the MOSS
- the applicable tax rates
- VAT due for every Member State
- total VAT due
Turnover of fixed establishments located in other EU Member States have to be filed separately in the VAT return.
Amounts have to be declared in Euro. In the case of foreign currencies, the taxpayer has to use the exchange rate provided by the European Central Bank on the last day of the declaration period. If no exchange rates are available for that date, the taxpayer has to use the exchange rate provided by the European Central Bank on the following day.
Corrections of VAT returns take retroactive effect and have to be made within three years following the day on which the initial return was required to have been submitted. After the expiry of this three year period, it depends on the rules of the respective Member State of consumption whether and how corrections can be made.
VAT due for supplies covered by the MOSS is paid via the Member State of identification. Payments have to be made to a special account designated for the MOSS supplies. When making the payment, the taxpayer is required to refer to the underlying VAT return.
Payment has to be made when submitting the return, at the latest, however, by the 20th day of the month following the return period.
VAT due for the first calendar quarter 2015 has to be paid at the latest on 20 April 2015.
When using the MOSS, taxpayers have to meet certain reporting and recording obligations. The reporting obligations comprise:
- Information connected to the cessation of taxpayer’s activities covered by the MOSS
- any changes to his activities covered by the MOSS whereby the taxpayer no longer meets the conditions necessary for using the MOSS, and
- any changes to the information previously provided to the Member State of identification.
The reporting obligations have to be met electronically via FinanzOnline (EU-scheme) or the portal provided by the Ministry of Finance (Non-EU-scheme). The taxpayer has to report to the Member State of identification no later than the 10th day of the month following the changes.
The taxpayer’s records need to enable the determination whether or not the MOSS VAT return is correct. The recordings have to be kept individually for each Member State and need to contain the following information (Art. 63c Implementing Regulation (EU) 282/2011 as amended by Implementing Regulation (EU) 967/2012):
- the Member State of consumption to which the service is supplied;
- the type of service supplied;
- the date of the supply of service;
- the taxable amount indicating the currency used;
- any subsequent increase or reduction of the taxable amount;
- the VAT rate applied;
- the amount of VAT payable indicating the currency used;
- the date and amount of payments received;
- any payments on account received before the supply of service;
- where an invoice is issued, the information contained on the invoice;
- the name of the customer, where known to the taxable person;
- the information used to determine the place where the customer is established or has his permanent address or usually resides.
The records have to be kept for a period of 10 years and need be recorded by the taxable person in such a way that they can be made available by electronic means without delay and for each single service supplied.
A taxpayer using the MOSS may cease using the MOSS regardless of whether he continues to supply services which are eligible for the special scheme. The taxpayer shall inform the Member State of identification at least 15 days before the end of the calendar quarter prior to that in which he intends to cease using the MOSS. Cessation is effective as of the first day of the next calendar quarter. Where the taxpayer ceases to use the MOSS voluntarily, he will be excluded from using the MOSS in any Member State for two calendar quarters (quarantine period).
Next to the voluntary cessation, there are certain situations which lead to a mandatory exclusion:
- the taxpayer informs the Member State of identification that he no longer supplies telecommunications, boradcasting of electrinically supplied services: quarantine period of 2 calendar quarters;
- the taxpayer had made no supplies under MOSS for eight consecutive calender quarters: no quarantine period;
- the requirements to use the MOSS are not met anymore: no quarantine period;
- the taxpayer persistently fails to comply with the rules relating to the MOSS: quarantine period of 8 calendar quarters (exclusion effective for both the EU-scheme and the Non-EU-scheme).
Persistent failures arise when:
- reminders for submitting a VAT return have been issued to the taxpayer by the Member State of identification, for three immediately preceding calendar quarters and the VAT return has not been submitted for each and every one of these calendar quarters within 10 days after the reminder has been sent;
- reminders for payment have been issued to the taxpayer by the Member State of identification, for three immediately preceding calendar quarters and the full amount of VAT declared has not been paid by the taxpayer for each and every one of these calendar quarters within 10 days after the reminder has been sent, except where the remaining unpaid amount is less than EUR 100 for each calendar quarter;
- following a request from the Member State of identification or the Member State of consumption and one month after a subsequent reminder by the Member State of identification, the taxpayer has failed to make electronically available the records.
In other cases, it is at the Member State of identification’s discretion to determine whether or not a taxpayer persistently fails to comply with the rules relating to the MOSS.
Persistent failures lead to the exclusion from the MOSS and to the application of a quarantine period of eight calendar quarters which applies to both the EU scheme and the Non-EU scheme.
The exclusion decision is sent to the taxpayer electronically and takes effect as from the first day of the calendar quarter following the delivery of the decision.
Where the taxpayer moves his business establishment or fixed establishment from the Member State of identification to another Member State leading to the exclusion from MOSS, this exclusion will be applicable at the date of the change. However, the taxpayer may use the MOSS in the new Member State as of the date of change, if he wishes to continue using the MOSS. If the taxpayer wishes to use the MOSS in the new Member State of identification, the taxpayer is required to inform both Member States (the old Member State of identification and the new Member State of identification) of the change no later than on the 10th day of the month following the change.
Input VAT deduction is not possible via the MOSS. Insofar as input VAT is deductible, the taxpayer has to use the refund mechanism or – if not applicable – needs to deduct input taxes within the regular VAT regime.