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17 January 2018

MOSS: the future of e-commerce?

At its December session, ECOFIN adopted new VAT rules that should make things easier for e-commerce businesses.

Aleš Krempa
Petra Němcová

The changes have been reflected in the revised VAT Directive and the Directive on the Exemption from Value Added Tax and Excise Duty of Goods Imported by Persons Travelling from Third Countries. The EU sees the simplification namely in extending the option of VAT collection through a single point of administration – the Mini One Stop Shop (MOSS). In MOSS, tax is collected by means of a VAT registration in a single state, and then divided among individual member states depending on the location of the end user/consumer. The proposed changes can be classified into two categories based on their planned effective date: those effective from 2019, and those effective from 2021.

The first category, i.e. changes effective from 2019, includes proposals for modifications of the existing MOSS, as several improvement opportunities have been identified since its introduction in 2015. These are primarily:


  • setting a threshold for taxation in the supplier’s state for electronic services (similar to the threshold for sending goods); the threshold has been proposed at EUR 10 000 per a calendar year;
  • billing for the services should be governed by the legal regulation of the supplier’s state of identification;
  • extending the option to use MOSS also to non-EU entities registered for VAT in the EU;
  • simplifying the requirements for supporting the location of the electronic services recipient.


Another significant change, effective from 2021, is extending the possibility of using MOSS also to the sending of goods. This should concern goods sent by EU suppliers as well as those from third countries. The amendment cancels the exemption of small parcels from import VAT to level the playing field for EU and third country suppliers. To make the application of the regime feasible, third-country entities should be allowed to use a representative seated in the EU. With the extension of MOSS, the regulation on administrative cooperation and the fight against VAT fraud has also been amended, as taxation through a single point of administration (MOSS) requires much closer cooperation among member states.


Obviously, MOSS’ extended application will have a significant effect on the future of VAT. The question remains whether a similar manner of taxation is also optimal for standard intra-EU B2B supplies, as currently proposed by the Commission.

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