German parliament adopts changes to VAT place of supply of services and mini one-stop shop rules

German parliament has adopted a law to implement the provisions of the EU VAT package into German legislation, i.e. as from 1 January 2015, new rules will apply to supplies of services of broadcasting, telecommunications and electronically provided services.

The German parliament finally adopted a law on 11 July 2014 to implement the provisions of the EU VAT Package into German legislation. The VAT package changes the place of supply rules for supplies of services involving supplies of broadcasting, telecommunications and electronically provided services (i.e. e-services). The legislation was necessary because EU member states are required to implement the VAT package before 1 January 2015.

The new rules will affect supplies made to private individuals and non-business customers (“B2C supplies”) who are based in an EU member state other than the state in which the supplier is established.

Suppliers of broadcasting, telecommunications and electronically provided services will need to determine where their customers are established or usually reside and will need to change and account for VAT at the applicable rate in that country. The new rules will apply regardless of where the supplier is established or registered for VAT purposes.

While a number of services are easy to identify as services falling under the new rules such as download of software or other electronically provided content, businesses should make sure to carefully examine all services provided in the light of the new regulations.

As part of the changes, B2C service providers may be able to opt to account for VAT across the EU via a single electronic declaration (“mini-one-stop-shop scheme - MOSS”), which is designed to simplify compliance requirements by avoiding the need for multiple-country VAT registrations that otherwise would be required. The Federal Tax Office shall open a registration portal for German business willing to apply MOSS as from October 1st, 2014.

More information

Webcast: EMEA Dbriefs - 2015 Changes to EU VAT Place of Supply of Services Rules: The Final Countdown 11. September 2014