In case your company has converted a huge amount of EU-people to paying customers for your IT and online products and services, we truthfully wish you to retain them and continue growing. Yet, you should consider that commencing January 01, 2015 a new European VAT regulation is effective for all companies providing so called “electronically supplied services” to citizens or residents of the EU member states, regretfully regardless of the number of customers.

List of Applicable Services

To all of you who will ask what stays behind “electronically supplied services” and whether my company is a qualified provider: if you find your company’s business in the list of services below, start getting seriously interested:

  • Website hosting and webpage hosting;
  • Automated, online and distance maintenance of programmes;
  • Remote system administration;
  • Online data warehousing where specific data is stored and retained automatically;
  • Online supply of on-demand disc space;
  • Accessing or downloading software (including procurement/accountancy programmes and anti-virus software) plus updates;
  • Software to block banner adverts showing otherwise known as Bannerblockers;
  • Download drivers, such as software that interfaces computers with peripheral equipment (such as printers);
  • Online automated installation of filters on websites;
  • Online automated installation of firewalls;
  • Accessing or downloading desktop themes;
  • Accessing or downloading photographic or pictorial images or screensavers;
  • Digitized content of books and other electronic publications;
  • Subscription to online newspapers and journals;
  • Weblogs and website statistics;
  • Online news, traffic information and weather reports;
  • Online information generated automatically by software from specific data input by the customer, such as legal and financial data (in particular such data as continually updated stock market data in real time);
  • The provision of advertising space including banner ads on a website/web page;
  • Use or search engines and Internet directories;
  • Accessing or downloading of music on to computers or mobile phones;
  • Accessing or downloading of jingles, excerpts, ringtones, or other sounds;
  • Accessing or downloading of films;
  • Downloading of games on to computers and mobile phones;
  • Accessing automated online games which are dependent on the Internet, or other similar electronic networks, where players are geographically remote from one another;
  • Automated distance reaching dependent on the Internet or similar electronic network to function and the supply of which requires limited or no human intervention, including virtual classrooms, except where the Internet or similar electronic network is used as a tool simply for communication between the teacher and student;
  • Workbook completed by pupils online and marked automatically, without human intervention.

Application of the New VAT Regulation

One may say “It is not applicable to us, we are not an EU company and we shouldn’t comply” and this one will be so wrong. Yes, exactly, the place of actual consumption of those electronic services is what matters from now on and the providers are liable regardless of the place they are established.

For instance, if you run a US company that supplies electronic services to citizens or residents of the EU, you will be required to designate a Member State of identification as a single point of electronic contact for VAT identification and VAT declarations. In order to facilitate compliance with your company’s fiscal obligations, a special “non-Union” scheme has been put in place or so called “VAT Mini One Stop Shop”. Under this scheme, once you have the VAT MOSS registration in a Member State, you will be able to electronically submit on a quarterly basis via a web portal and a secure communication network, the MOSS VAT returns detailing the supplied services in all Member States along with the VAT due. Note that without the MOSS, your company as a supplier will be required to register in each Member State in which supplies services.

VAT MOSS applies as well to EU established companies for their customers – citizens or residents of another Member State under the so called “Union scheme”.

Yes, you are correct thinking that different VAT rates will apply for each Member Country you supply services in, so this could be the end of the unified price list, the next opening issue for your currency risk management discussions or new hedging policy options and a significant reason for new additions and adjustments to your ERP/accountancy software. In addition, as you will be collecting the VAT from your customers per quarter and after the end of the reporting quarter you will be requested to report and transfer the collected amounts, a new variable in your cash flow management policy may be adopted.

Let’s say your company is blessed to have Slovak, German and Belgium customers and your SAAS product net price (excluded VAT) amounts to EUR 100. Because of the different VAT rates that apply in each of the above mentioned countries your final price chargeable to the different customers would be:

  • For Slovakia – EUR 122 (current VAT rate – 22%)
  • For Germany – EUR 119 (current VAT rate – 19%)
  • For Belgium – EUR 121 (current VAT rate – 21%)

Nevertheless, scarring you out was not the intention of this article, so if it could provide any comfort, you should know that the above mentioned regulations are applicable to the telecommunication and broadcasting service providers too, so cheer up.

Since the “keep-it-simple” beloved principle is not usually applicable to tax related issues, we kindly advise you to contact the financial professionals who take care of your tax matters for all the details.



  1. Council Directive 2006/112/EC on the common system of value added tax (as amended by Council Directive 2008/8/EC);
  2. Council Regulation (EU) No 904/2010 on administrative cooperation and combating fraud in the field of value added tax (recast);
  3. Council Regulation (EU) No 967/2012 amending Implementing Regulation (EU) No 282/2011 as regards the special schemes for non-established taxable persons supplying telecommunications services, broadcasting services or electronic services to nontaxable persons;
  4. Commission Implementing Regulation (EU) No 815/2012 laying down detailed rules for the application of Council Regulation (EU) No 904/2010, as regards special schemes for non-established persons supplying telecommunications, broadcasting or electronic services to non-taxable persons;
  5. Commission Implementing Regulation (EU) No 815/2012 laying down detailed rules for the application of Council Regulation (EU) No 904/2010, as regards special schemes for non-established persons supplying telecommunications, broadcasting or electronic services to non-taxable persons;
  6. MOSS functional and technical specifications as adopted by the Standing Committee on Administrative Cooperation (SCAC);
  7. Guide to the VAT mini One Stop Shop by the European Commission, Directorate General Taxation and Customs Union, Indirect Taxation and Tax Administration, VAT.


Rangel Hristov is an experienced Finance, Accountancy and Taxation professional. In addition to his Masters in Accountancy and Controlling he graduated in parallel Finance and was part of a Ph.D project in Finance Management of Holding Structers. His over 14 years of experience include Finance, Taxation, Accountancy and International Operations consultancy in IT, Telecommunication, Project Management, Construction and Pharmaceutical Research companies, involving multidisciplinary projects and cross-fields expertise application.