Invoicing of services in the Mini One Stop Shop procedure

2015 will bring further changes to the Value Added Tax Act. The scope of the amendment to the regulations will include the issue of determining the place of provision of telecommunications, broadcasting and electronic services. As a result, the place of taxation of these services will change, as will the method of invoicing such sales. Due to the changes, an intra-Community special procedure for VAT settlement will also be implemented - the Mini One Stop Shop system, which is intended to mitigate the effects of the amendment to the regulations.

Place of provision of telecommunications, broadcasting and electronic services in 2015

By introducing changes to the VAT Directive, the European Union obliged the Member States to implement regulations in the field of, inter alia, determining the place of provision of telecommunications, broadcasting and electronic services. Currently, in order to determine where services are provided, and therefore where they should be taxed, it is necessary to distinguish the status of buyers. If the buyer is a taxpayer company from the Community, art. 28b, so the place of the benefit and taxation is the country of the buyer. If, on the other hand, the sale was made to a private individual from the European Union, the seller is liable to tax, as the place of supply is then the country where the seller has his registered office.

From January 2015, the issues discussed above will change. The place of supply of telecommunications, broadcasting and electronic services will always be the country of the buyer, regardless of whether it is the taxpayer. However, this does not mean that the status of the buyer will not matter at all. There will be differences in the procedures related to taxation of sales and the invoicing itself.

Invoicing telecommunications, broadcasting and electronic services in 2015

Currently, an entrepreneur providing telecommunications or electronic services to private contractors from the EU taxes them according to the national VAT rate - usually 23%. The invoice issued for the above-mentioned type of transaction does not in principle differ from the invoice issued to a domestic contractor. However, in the case of sales to a taxpayer (company), the buyer is obliged to calculate the tax. Therefore, the Polish entrepreneur only provides information about the reverse charge on the invoice and does not show any VAT rate, because he is not responsible for taxing the transaction.

The amendment to the regulations will also require changes in formal issues, e.g. issuing invoices, but only in the case of sales to private persons. Due to the change of the place of supply of services, and thus taxation, it will be necessary to use the VAT rates (in the meaning of value added tax) appropriate for the country of consumption. Invoices should then be issued in accordance with the regulations applicable in the country of the buyer.

Necessary knowledge of foreign VAT rates for MOSS settlements

Polish entrepreneurs using the special VAT (Mini One Stop Shop) procedure will be obliged to use the rates appropriate for the countries of consumption when selling telecommunications, broadcasting and electronic services to non-taxable persons. Therefore, it will be necessary to get acquainted with the tax rules in force in the country of residence of the buyer. For your convenience, the European Commission has compiled and published a list of VAT rates appropriate for each country.

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Entrepreneurs who decide to use a special VAT settlement procedure will be required to introduce a new transaction documentation scheme. It may also require changing the invoicing program used so far. Not everyone will be able to include foreign VAT rates on the invoice, and this function will be necessary for the proper documentation of the sale.