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Electronic services value added tax (VAT) change in 2015

The VAT system will change for electronic services provided to private individuals in the European Union (EU). Products such as Itunes, apple software, apps, Vodafone, Orange, T Mobile and all other phone services, downloading films, music, e-learning are regarded electronic services.

The rule till the end of 2014 is that these services are taxed for VAT purposes in the country where the provider is situated. This will change to the country where the consumer is living. So the service providers need to find out where their clients are living.

VAT due in 28 EU countries

Within the EU we have 28 countries, we do not have 28 different VAT rates, but there are a lot of different rates going from low to high. In each country the correct amount of VAT is due. So not only the service provider needs to find out where the consumer is living, also he needs to charge the correct tax. Will this affect the margin, yes it will, unless you can charge different prices in different countries.

Will it be a night mare to file in all 28 EU countries the VAT return? Yes it will. The answer is that you can opt to file for all 28 countries in one EU country of your choice.

May we suggest you chose the Netherlands/Holland? We do have a sophisticated VAT filing system already, the Netherlands is too small not to operate regional wise. The Dutch tax office is not your enemy, not your friend, but it is your partner in complying with the obligations. That implies the tax office is willing to assist you where necessary, especially in this new situation.

If you chose the Netherlands/Holland to file your EU VAT for electronic services provided to private consumers that reside in the EU, we will be glad to assist you.

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