It seems like every VAT consultant, in the US and in the EU, has jumped on the new EU VAT rules that kick in on January 1, 2015. I have not paid as much attention to the changes, simply because the impact on U.S. companies is rather limited.
As a reminder, this is about the supplies of online services (downloads of all sorts of automated supplies, like video, games, music etc) to EU based individuals. VAT is due at the rate of the country of the buyer. See http://tinyurl.com/n9hv2qo for more information.
For a U.S. based company there are really only two things to keep in mind:
1. If the U.S. company has a branch or subsidiary that – then the rules that used to apply to the U.S. parent company now apply to the EU branch or subsidiary as well.
2. If these online supplies to EU individuals are only made from a U.S. based company, then the U.S. company was required to register for VAT. Under certain conditions, the U.S. company could register for VAT in a single country (in practice this was mostly the UK). From January 1, the U.S. company will have to change its registration to the so-called mini-one-stop-shop (“MOSS”) registration. See http://www.hmrc.gov.uk/posmoss/index.htm for the guidance of the UK tax authorities.
Here is an email that one of my clients recently received from HMRC. It is a tough read, but the gist is that the US company has the change the VOES registration into a MOSS registration… Yes, it sounds weird, but they say that this swap is painless.
Download (PDF, 65KB)