Electronic Services (MOSS)
Electronic services are in particular telecommunication, radio, TV services, music downloads, films etc., digital products such as software downloads, databanks, automatically generated services from a computer and other electronically generated services.
The location of the other services, which are generated electronically to private individuals, depends on the place of residence of the private individual. Thus, there is compulsory VAT registration in Germany for electronic services to private individuals in Germany, regardless whether the company providing the service is based in the EU or in a third country.
VAT registration is only necessary in one country
For companies in the EU and third countries respective simplifications apply in the EU, so that VAT registration is only necessary in one country. Companies from a third country can register for VAT in Germany via the Federal Central Tax Office. In the so-called VAT on eServices procedure, turnover from the other EU states can be registered and paid in Germany. However, the rate of tax of the member state, in which the private individual is resident, will apply.
The Mini-One-Stop-Shop procedure (MOSS) has been in operation since 2015 for entrepreneurs in the EU. Hereby the EU-entrepreneur can also register all turnover from electronic services in one country, e.g. Germany. This country then registers the turnover to the respective countries and distributes the VAT payments accordingly.
Summary of the most important points
- Electronic services are for example, software downloads or digital databanks, which are generated automatically from a computer and provided electronically.
- Foreign companies which provide electronic services to German private individuals are liable for VAT.
- The Mini-One-Stop-Shop procedure and VAT on eServices offer considerable simplification due to registration in one EU country only.