Mini One Stop Shop (MOSS) – Digital Services
At present, the place of supply of digital services provided to consumers is where the customer belongs and this will remain so after the transition period ends. As a consequence, suppliers will still have a requirement to register and account for VAT in the country of their customers.
To prevent businesses from having to register in all EU member states when providing these services, the EU implemented the Mini One Stop Shop (MOSS) reporting mechanism. This allows traders to report all of their EU digital service sales to consumers in one MOSS return via either their own EU tax authorities for EU companies or via any EU country via the non-EU suppliers MOSS reporting mechanism.
Once the UK is outside of the EU, UK based suppliers will not be allowed to use the EU-MOSS simplification to report electronic service transactions, therefore the HMRC portal for submitting these returns will close. This will mean that these businesses will need to register in another EU member state and use the non-EU MOSS reporting mechanism. Alternatively, suppliers can register in each EU country where they are supplying electronic services and account for VAT locally.
Non-UK businesses who are selling electronic services into the UK will need to register for VAT and start charging and accounting for UK VAT on their electronic supply transactions.
Non-EU businesses currently using the UK portal for their EU supplies will also need to register in another EU country from 1 January 2021.