Mag. Balazs Esztegar LL.M.
Attorney-at-law Vienna

Piaristengasse 41/10
1080 Vienna, Austria
Tel. +43 1 997 4102
Fax +43 1 997 4102-99

MOSS - New VAT regulations for webshops

As of 01.01.2015, new place-of-supply rules will apply in the European Union for electronically provided telecommunication, radio and television services, bringing with it the introduction of the Mini-One-Stop-Shop (MOSS) in VAT. Web shop operators and other entrepreneurs who provide their services electronically to non-entrepreneurs must in future determine for each individual service where their customer is located and apply the relevant VAT rate according to their country of residence.

All services provided via the internet are affected, such as downloads (music, films, texts, software, audio books, etc.), website hosting, but also online seminars. The new regulation brings additional difficulties for entrepreneurs in the e-commerce sector, as in future they will have to show the correct VAT already in the course of the order. The VAT rates in the individual member states are by no means uniform and range from 15% in Luxembourg to 27% in Hungary. It is thus clear that different tax rates mean a competitive advantage or disadvantage and can even lead to the inefficiency of a sales channel or a product at the fixed price.

In addition, entrepreneurs must change their accounting so that all VAT rates of the member states can be offset. In addition, the entrepreneur would have to be registered for tax purposes in all eligible member states.

The so-called MOSS (Mini-One-Stop-Shop) should bring a small relief. Entrepreneurs can register for this service via Finanz-Online and report their foreign sales electronically to the tax office. The VAT to be paid is paid to the Austrian tax office, which distributes the taxes to the individual countries.