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Electronic services value added tax (VAT) system

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. How does the registration procedure start?

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. Within the EU we have 28 countries. That implies quarterly an additional 28 VAT returns to be filed with each EU member state.

The EU SCAC institute agreed that each entrepreneur can also file for all 28 EU member states the VAT return in one EU country. The registration procedure for this so called one stop shop solution has started already and the system is up and running coming January 1.

Where to register? We prefer that you register in the Netherlands, as the Netherlands has proven to have a highly advanced automated tax filing system, also for the VAT. However, you do not always have a choice.

If you have a registration already in the EU for VAT purposes, then you are bound to have your one stop shop registration in that country. This also applies to permanent establishment registrations. Only NON EU companies selling the above mentioned products in the EU that do not already have an EU registration can decide where to register.

Yes, also NON EU companies selling electronic services within the EU have become EU VAT entrepreneurs.

Please contact us as soon as possible to set up the registration in such a way that it takes it effect as of January 1, 2015.

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