Malta: New VAT Rules Applicable From 2015 And The Mini One Stop Shop - Are You Prepared?
28 November 2013
Posted by: Author: PwC Malta
Author: PwC Malta (Mondaq)
From 1 January 2015, all telecommunications, broadcasting and
electronic services will be vatable at the place where the end
customer is established, has his permanent address or usually
resides, irrespective of its VAT status. These changes are likely
to have a substantial impact on businesses falling within the
purport of these rules, including their VAT filing obligations, IT
systems settings, pricing and contractual obligations. The
complexity and extent of the new measures require you to act as
soon as possible prepared for the 2015 VAT changes in time!
Various "Qualifying Businesses" will be
impacted by these changes, including:
1. Does the MOSS scheme apply to you?
- Cloud computing service
- On-line gaming operators
- Payment handlers (e.g. cloud
Currently, telecommunications, broadcasting and electronic
services, when supplied by a business established within the EU to
non-taxable persons (e.g. private individuals, certain charities
and public bodies) are taxed in the Member State where the supplier
is established. However, this VAT treatment will change from 1
January 2015, to be brought in line with identical supplies
provided by businesses established outside the EU.
If your business transacts with customers established in various
EU countries, this is likely to create new administrative and
economic burdens since your business may now need to deal with
multi territorial VAT obligations and VAT rates. To avoid multiple
VAT registrations throughout the EU, the so-called mini one stop
shop ('MOSS') scheme, which shall come into force on 1
January 2015, could be used, reducing the administrative burden
associated with the changes at hand.2. What is the MOSS scheme?
The MOSS scheme, will allow businesses supplying B2C
telecommunication services, television and radio broadcasting
services and electronically supplied services to customers in other
Member States to account for the VAT due on those supplies by means
of a web portal in the Member State in which they are
This scheme, which is optional, is a simplification measure that
therefore allows qualifying businesses to avoid registering for VAT
in each of their customers' countries. Instead, qualifying
businesses which are registered for the MOSS scheme in a Member
State (referred to as the 'Member State of
Identification'), electronically submit quarterly MOSS VAT
returns detailing supplies of telecommunications, broadcasting and
electronically supplied services to B2C customers in other Member
States (referred to as the 'Member States of consumption'),
along with the VAT due. These returns, together with the VAT paid,
are then transmitted by the Member State of Identification to the
corresponding Member States of consumption via a secure
communications network.3. Who can register for the MOSS scheme?
Any business that makes B2C supplies of telecommunications,
television and radio broadcasting services and electronically
supplied services to customers in other Member States (hereinafter
"Qualifying Business") may register for the MOSS scheme.
Once a Qualifying Business registers for the MOSS scheme, its B2C
supplies to customers established in all EU countries, other than
those supplied in an EU country in which the Qualifying Business
has a fixed establishment or a VAT registration, must be reported
in the Member State of Identification under the scheme.
Two different sub-schemes fall under the MOSS scheme. One
sub-scheme applies to non-EU based qualifying businesses (the
"non-Union scheme") and another for EU based qualifying
businesses (the "Union scheme").4. Are there any guidelines to the legislative changes?
The EU Commission has recently amended the Implementing
Regulation 282/2011 to further supplement additional detail
relating to the place of supply of services relating mainly to
telecommunications services, broadcasting services and electronic
services. Such Implementing Regulation includes presumptions on how
businesses are to determine the place of taxation of their
customers. The updated rules can be accessed at
Furthermore, following last year's publication of
legislation on the registration and reporting rules for the 2015
MOSS for businesses making B2C supplies of telecommunications,
broadcasting and electronic services within the EU, guidelines have
now been published by the EU Commission aimed at providing a better
understanding of the legislation, along with functional and
technical specifications of the MOSS scheme.
The aim of these guidelines is to cover various aspects of the
registration and administration process, and to allow Member States
enough time to transpose the EU legislation and to set up their IT
systems in an appropriate way. In doing so, taxpayers have been
provided with the necessary information to adapt to the new rules
ahead of the 2015 deadline. Such guidelines are not legally binding
but constitute practical and informal guidance about how EU law and
EU specifications are to be applied.
These guidelines cover four main aspects:
- The registration process, including deregistration;
- The return process;
- The payment process, including reimbursements;
- Record keeping and other miscellaneous matters.
The guidelines can be accessed at http://ec.europa.eu/taxation_customs/resources/documents/taxation/vat/how_vat_works/telecom/one-stop-shop_guidelines_en.pdf
The EU Commission also announced plans to issue further
guidelines on the audit of the MOSS scheme, and explanatory notes
on the place of supply rules for telecommunications, broadcasting
and electronically supplied services.
This article first appeared in mondaq.com.