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 apply. At the same time, entrepreneurs will be able to opt to use the Mini One-Stop-Shop (MOSS) for the supplies of these services to make tax compliance easier (see below).
New Place of Supply Rules
From 1 January 2015, electronically supplied services, telecommunications and broadcasting services will, generally, be taxable at the customer’s location, regardless of whether the customer is an entrepreneur (B2B) or a consumer (B2C).
Entrepreneurs providing services which are covered by these new rules will have to determine where their customer is resident for all supplies. To make compliance easier, standardised procedures apply EU-wide.
Presumptions for Customer’s Place of Residence/Establishment
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 via a landline, it will be presumed that the customer is established or resides where the landline is installed.
The place of supply of services provided via mobile networks is determined by the mobile country code of the SIM card used when receiving such services.
Services for which the use of a decoder or similar device or a viewing card is needed and a landline 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 the viewing card is sent to with a view to being used there.
In all other cases, the customer's location must be identified based on two items of non-contradictory evidence. Such evidence includes– amongst others – the customer's billing address, the IP address, bank details i.e. the location of the bank account used for payment or any other commercially relevant information.
The tax authority can only contest these presumptions if there are indications of misuse or abuse by the supplier.
Presumptions for Determining the Supplier
For electronically supplied miscellaneous services and telephone services supplied over the Internet, it is assumed that an entrepreneur taking part in the supply is acting in his own name but on behalf of the provider of those services (“provider”) and is thus regarded as the service provider to the customer, if the services are supplied via a telecommunications network, an interface or portal (for instance, the App Store). This assumption may be refuted under the following cumulative conditions (Art. 9a of the Council Implementing Regulation (EU) No. 1042/2013 amending Implementing Regulation (EU) No. 282/2011):
- the invoice issued or made available by each entrepreneur taking part in the supply of the electronically supplied services must identify the 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,
- an entrepreneur
- neither authorises the charge to the customer or the delivery of the services
- nor sets the general terms and conditions of the supply
- these requirements are set out 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.
Mini One Stop Shop (MOSS)
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 an entrepreneur exercises the option for MOSS, they do not need to register, file tax returns and issue VAT payments in each Member State where electronically supplied services, telecommunications and broadcasting services are provided.
The MOSS is optional and must be opted for in good time. If the option is exercised, it is applicable for all supplies covered by the special scheme. Depending on whether an entrepreneur 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. An input deduction has to be made by using the the refund mechanism.
FAQs: Mini One Stop Shop (MOSS)
Who is eligible to use MOSS?
MOSS can be used by entrepreneurs who provide electronically supplied, telecommunication and broadcasting services to consumers in EU Member States if the entrepreneur is not established and does not have a fixed establishment there. Moreover, the use of MOSS assumes a VAT identification number and registration in good time.
When is Austria the Member State of identification?
If an entrepreneur is established in Austria, Austria will be its MSI. If an entrepreneur is established outside of the EU but has a fixed establishment in Austria, Austria will also be the MSI. If this entrepreneur has another fixed establishment located in another EU Member State, the entrepreneur may choose a MSI from the Member States where his fixed establishments are located (EU scheme).
If an entrepreneur is established outside of the EU and does not have a fixed establishment in Austria or in any other EU Member State, and is not required to register in a Member State for VAT purposes, he can freely choose Austria as MSI (Non-EU scheme).
An entrepreneur established in Austria provides electronic services to consumers located in Germany and Italy. The entrepreneur has a fixed establishment in Slovakia. If the entrepreneur exercises the option to use the MOSS, Austria will be the Member State of identification (EU scheme).
An entrepreneur who runs his company from Switzerland has a fixed establishment in Austria. If the Swiss entrepreneur wants to use MOSS, Austria is the MSI. If the Swiss entrepreneur also has a fixed establishment in Germany, in addition to the one in Austria, he would be able to choose between Germany and Austria as the MSI. The entrepreneur is bound by his choice for the current and next two consecutive calendar years (EU scheme).
An entrepreneur who is established in Switzerland with no fixed establishments in the EU and no obligation to register for VAT purposes in the EU can 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?
Entrepreneurs established in Austria or entrepreneurs established in third States (i.e. non-EU Member States) with fixed establishments in Austria can choose Austria as MSI (EU scheme). The Non-EU scheme applies where the entrepreneur is not established in the EU does not have a fixed establishment in the EU. In that case, the MSI may be chosen freely.
How to register for the MOSS (EU scheme)?
The registration process for the MOSS (EU scheme) is performed electronically via FinanzOnline.
How to register for the MOSS (Non-EU scheme)?
The registration process for the MOSS (Non-EU scheme) is performed electronically via the Austrian Ministry of Finance Finance: non-eu-moss.bmf.gv.at.
What is the deadline to register for the MOSS (EU scheme and Non-EU scheme)?
If the entrepreneur wants to use the MOSS and all the requirements for exercising the option are met, the MOSS can be used from the calendar quarter following registration.
If an entrepreneur wants to use the MOSS from 1 January 2015, he must file his registration by 31 December 2014 at the latest.
If an entrepreneur supplies services covered by MOSS for the first time, the MOSS can apply from the date of the first supply, provided the entrepreneur informs the Member State of identification that he has started his activities covered by the MOSS no later than the 10th day of the month following the first supply of services.
An entrepreneur starts to supply services covered by the MOSS on 12 October 2015 for the first time. If the entrepreneur registers by 10 November 2015, he may use the MOSS from the date of the first supply.
Which services can be declared using the MOSS?
Only taxed electronically supplied services, telecommunications and broadcasting services provided to consumers located in EU Member States where the entrepreneur is not established and does not have fixed establishments can be filed via the MOSS.
How does the entrepreneur declare services to an EU Member State, where the entrepreneur has a fixed establishment?
In Member States where the entrepreneur is established and in Member States where the entrepreneur has fixed establishments, regular procedures must be followed (monthly/quarterly VAT returns and annual returns if applicable).
How is the VAT return filed?
VAT returns must be submitted electronically. Within the EU scheme, this is done by using the portal FinanzOnline. Within the Non-EU scheme, the specific non-EU Moss Portal established at the Ministry of Finance must be used.
What is the return period for MOSS returns?
The return period for the MOSS VAT returns is the calendar quarter.
All supplies covered by the MOSS provided between 1 January 2015 and 31 March 2015 must be filed in the VAT return for the first calendar quarter 2015.
What is the deadline for handing in the VAT return?
The VAT return must 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 provided?
If an entrepreneur exercises the option to use the MOSS, VAT returns must be filed even if no supplies which are covered by the MOSS are provided (nil return). If nil returns have been submitted for eight consecutive calendar quarters, the entrepreneur will be excluded from the MOSS.
What needs to be included in the VAT return?
The VAT return needs to include:
- the VAT identification number (EU-scheme) or the identification number issued by the competent authority (Non-EU-scheme)
- turnover covered by the MOSS
- applicable tax rates
- VAT due for every Member State
- total VAT due
Turnover of fixed establishments located in other EU Member States must be filed separately in the VAT return.
Which currency should be used?
Amounts must be declared in Euro. In the case of foreign currencies, the entrepreneurs 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 entrepreneur has to use the exchange rate provided by the European Central Bank on the following day.
How can VAT returns be corrected? How to deal with changes of the taxable base?
Corrections of VAT returns are retroactive and must be made within three years following the day on which the initial return was required to be 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.
How are payments made?
VAT due for supplies covered by the MOSS is paid via the Member State of identification. Payments must be made to a special account for the MOSS supplies. When making the payment, the entrepreneur is required to refer to the underlying VAT return.
What is the deadline for payment?
Payment must 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 must be paid at the latest by 20 April 2015.
What are the reporting obligations of entrepreneurs when using the MOSS?
When using the MOSS, entrepreneurs must meet certain reporting and recording obligations. The reporting obligations are:
- information related to the cessation of entrepreneur’s activities covered by the MOSS
- any changes to the activities covered by the MOSS whereby the entrepreneur no longer meets the necessary conditions to use the MOSS, and
- any changes to information previously provided to the Member State of identification.
The reporting obligations have to be fulfilled electronically via FinanzOnline (EU-scheme) or the Ministry of Finance portal (Non-EU-scheme). The entrepreneur must report to the Member State of identification no later than the 10th day of the month following the changes.
What are the record obligations of entrepreneurs when using the MOSS?
The entrepreneur’s records need to enable the determination whether the MOSS VAT return is correct. Records must be kept individually for each Member State and must 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;
- if an invoice is issued, the information contained in the invoice;
- the name of the customer, if known to the entrepreneur;
- the information used to determine the place where the customer is established or has his permanent address or usually resides.
Records must be kept for 10 years and must be recorded by the entrepreneur so that they can be made available electronically immediately and for each service supplied.
Is it possible to stop using the MOSS voluntarily?
An entrepreneur using the MOSS may cease using the MOSS regardless of whether he continues to supply services which are eligible for the special scheme. The entrepreneur 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 from the first day of the next calendar quarter. If the entrepreneur ceases to use the MOSS voluntarily, he will be excluded from using the MOSS in any Member State for two calendar quarters (quarantine period).
When will an entrepreneur be compulsorily excluded?
Besides voluntary cessation, there are certain situations which lead to compulsory exclusion:
- the entrepreneur informs the Member State of identification that he no longer supplies telecommunications, broadcasting of electronically supplied services: quarantine period of 2 calendar quarters;
- the entrepreneur did not provide any supplies under MOSS for eight consecutive calendar quarters: no quarantine period;
- the requirements to use the MOSS are no longer met: no quarantine period;
- the entrepreneur 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).
What are persistent failures to comply with the MOSS rules?
Persistent failures include:
- reminders for submitting a VAT return have been issued to the entrepreneur by the Member State of identification, for three immediately preceding calendar quarters and the VAT return has not been submitted for each one of these calendar quarters within 10 days after the reminder having been sent;
- reminders for payment have been issued to the entrepreneur 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 entrepreneur for each one of these calendar quarters within 10 days after the reminder having 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 entrepreneur has failed to make his records electronically available.
In other cases, it is at the Member State of identification’s discretion to determine whether an entrepreneur persistently fails to comply with the rules relating to the MOSS.
Persistent failures lead to 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.
When will the exclusion apply?
The exclusion decision is sent to the entrepreneur electronically and takes effect from the first day of the calendar quarter following the delivery of the decision.
What happens if an entrepreneur moves his business establishment or fixed establishment?
If the entrepreneur moves his business establishment or fixed establishment from the Member State of identification to another Member State leading to exclusion from MOSS, this exclusion will be applicable on the date of the change. However, the entrepreneur 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 entrepreneur wishes to use the MOSS in the new Member State of identification, the entrepreneur 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 by the 10th day of the month following the change.
Can entrepreneurs use the MOSS to recover input VAT?
Input VAT deduction is not possible via the MOSS. Since input VAT is deductible, the entrepreneur must use the refund mechanism or – if not applicable – must deduct input taxes using the normal VAT system.