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Potential MOSS threshold to be implemented

Posted: December 3, 2015

Following on from the fairly clumsy introduction of the ‘Mini One Stop Shop’ (‘MOSS’) at the start of the year there has been much comment, criticism and confusion from various sources as to how effective and efficient the new VAT system has been.

By way of a quick reminder, the new regulations mean that anyone providing ‘BTE’ services (Broadcasting, Telecommunications and E-commerce) within the EU to non-business customers must account for the relevant amount of VAT in the country of their customer. This means either registering and accounting for VAT in up to 28 different countries, or alternatively using the MOSS system in any one of those countries.

Reports to date show that the number of registrations is substantially lower than expected, bringing into question the validity and credibility of the system. Another of the main criticisms – particularly from the UK – is that there is no threshold applied, so ANY business making such supplies at any value must account for VAT.

This criticism appears to have paid off in that there is now talk of introducing such a threshold, but not at the €100,000 area that the UK were asking for, but more around €5,000. Apparently Denmark and Belgium were amongst the Member States arguing against any threshold being applied.

Donato Raponi, the commission’s head of VAT, struggled to explain the reasoning behind this at a recent EU VAT Conference in Dublin, and hinted that that the limit might be raised but certainly not above €20,000.

This will anger and frustrate many who see the system as being unworkable, unliked and stifling entrepreneurship by imposing a heavy taxation and reporting burden on small businesses, many of whom decide against venturing out into the world of commerce as a result. Any threshold announcement is likely to be made in the New Year.