Remote VAT : telecom, broadcasting & e-services
On the occasion of the 24th edition of the World Days without phone launched in 2001 by Phil Marso and dedicated this year to the impact of social media on our lives, we recall in our below article the VAT rules applicable to remote services:
- telecommunications
- radio and television broadcasting
- electronic services
- provision and hosting of websites;
- remote maintenance of apps;
- supply of software and their updates;
- provision of images, content, information and databases;
- provision of music, films, games and broadcasting of political, cultural, artistic, sporting, scientific or entertainment events;
- provision of distance learning services.
Being not physically locatable, these services are subject to VAT in the country of establishment or residence of their consumers.
Thus the supplier established in France is collecting French VAT on services provided to French companies or individuals.
On the other hand, services provided towards foreign companies and non-resident individuals are taxable in their country of establishment or residence.
The Foreign VAT is collected either by the non-resident company receiving the service (under reverse charge mechanism), or by the French supplier addressing foreign individuals.
In the last scenario, the French supplier can be required to get VAT registered in another EU member state for providing remote services to individuals, as soon as the global EU sales exceed the annual threshold of €10,000. Below this European threshold, the French VAT can be charged to non-resident individuals.
EU simplification regime
A simplification regime allows all suppliers of remote services to avoid multiple registration for the EU-VAT by applying for OSS (One-Stop-Shop). The registered supplier must invoice the VAT at the rate applicable in the country of residence of individual consumers. The collected VAT is paid to the French tax authorities who reverse the due amounts to the concerned member states.
Similarly, foreign companies selling remote services to European individuals can register in OSS (EU or non-EU option) and invoice their services under a VAT number of a single member state: the state of establishment (for European companies) or the state of VAT registration (for non-European companies).
For the provision of remote services outside the European Union, the suppliers are required to check their obligations and the applicable sales thresholds on a case-by-case basis.
OSS under VIDA
The OSS mechanism is likely to be extended in frame of the VIDA reform, for covering all cross-border B2C services by 2030.
Being applicable our days not only to remote services, but also to distance sales of goods, the OSS could also include local sales of goods carried out by non-established companies, as well as certain B2B sales and intra-community transfer of own stocks.
The exact implementation timetable of these measures is still to be specified.
BtoBnice accompanies companies in their VAT registration and OSS management.
