Debate about MOSS threshold in the European Union

The Association of European tax advisors (CFE) recommended the introduction of a -rather high- MOSS threshold for VAT registration.

Possible changes for the MOSS threshold

The Mini One-Stop Shop (MOSS) scheme allows companies supplying electronic services to private individuals in the EU to avoid a VAT registration in the country of the customer. These sales are subject to VAT in the country of the customer under the applicable VAT rate. Instead of one return in each country, the supplier files one single VAT return in his or her home country with details on the sales made in each Member State. Before this scheme was introduced in January 2015, these supplies were taxable in the country of the supplier, hence charging only local VAT.

The 2015 changes brought several problems for small businesses supplying electronic services to customers abroad. It was the first time these businesses had to deal with other countries' VAT and the compliance costs became too high for the smallest companies in this regime. These costs included the need to issue compliant invoices in the country of the customer, registration requirements in the home country or complications to get a refund on overpaid VAT.

What are the implications on the proposed MOSS threshold introduction?

The Association of European tax advisors and several Member States are now suggesting a registration threshold waiving all MOSS obligations for the smallest e-service businesses. Although there is consensus on the need to incorporate such threshold, the debate is now focused on the final value of this MOSS registration limit.


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