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12.2. VAT on the Supply of Services by Non-Residents

As with the supply of goods, the supply of services by a non-resident is subject to VAT.

If the non-resident has an establishment in Ireland, the establishment is typically responsible for the VAT. If there is no establishment in Ireland, the receiver of the service is typically responsible for VAT via reverse charge.

The rates of VAT on the supply of goods include a standard rate of 23%, reduced rates for certain products of 13.5%, 9%, and zero-rate. The following services are generally exempt from VAT:

  • Postal services
  • Financial & Insurance Services
  • Medical services

No input credit is allowed for exempt services.

Non-residents with establishment in Ireland are required to register for VAT if their taxable supply of goods meets or exceeds EUR 37,500 annually or if expected to reach EUR 37,500. As with supply of goods, taxable supply is less input VAT.

Non-residents without establishment in Ireland are generally not required to register for VAT except for certain services connected with immovable property.

As with supply of goods, registration is not required of the supply of services that are subject to reverse charges, except in the case of electronic services.

For the supply of electronic services by non-EU residents, VAT registration is required regardless of the level of sales. In cases where the non-EU resident supplies electronic services to multiple EU Member States, they would have to register for VAT in each state. As a result, the EU provides a scheme through which a non-EU resident need only register in one member state for all its EU electronic service sales. But, the amount of VAT payable is still dependent upon the location of the consumer for each transaction.

Place of Supply Rules in the EU for Telecommunications, Broadcasting and E-services

On 1 January 2015, the place of supply of telecommunications, broadcasting and e-services to non-taxable persons (B2C) in the EU is the place where the customer is established, has a permanent address, or usually resides. Taxable persons that make such supplies will be obliged to register, charge and account for VAT in the Member State of the customer.

In order to facilitate the payment of VAT on such supplies, the Mini One Stop Shop (MOSS) was established. MOSS is an optional scheme which allows businesses that supply telecommunications, broadcasting or e-services to consumers in Member States in which they do not have an establishment to account for the VAT due on those supplies via a web-portal in one Member State. Otherwise, businesses making such supplies would be obliged to register for VAT, file returns and make payments in each Member State in which they make these supplies.

The MOSS scheme can be used by taxable persons supplying telecommunication, broadcasting or e-services to non-taxable persons in Member States in which they do not have an establishment.

There are two schemes within the Mini One Stop Shop scheme: (i) the non-Union scheme for taxable persons that have no establishment within the EU; and (ii) the Union scheme for taxable persons that have an establishment within the EU (but are making supplies to Member States in which they are not established).

The Non-Union Scheme

The non-Union scheme can apply to a taxable person who makes supplies of telecommunications, broadcasting or e-services to non-taxable persons within the EU and who meets each of the following:

  • The business of the taxable person is established outside the EU; and
  • The taxable person has no fixed establishment and is not VAT registered in any EU Member State.

The Union scheme

The Union scheme can only apply to a taxable person who makes supplies of telecommunications, broadcasting or e- services to non-taxable persons in a Member State in which he or she has no establishment and who satisfies one of the following criteria:

  • The business of the taxable person is established in the EU; or
  • The business of the taxable person is established outside the EU but the taxable person has a fixed establishment within the EU.

The only difference in the two is the criteria used to determine where the business can register for MOSS. The scheme can be used only in relation to supplies:

  • of telecommunications, broadcasting or e-services;
  • from the place of establishment of the business or from a fixed establishment in a Member State;
  • to a non-taxable customer; and
  • in a Member State in which the supplier does not have any establishment.

MOSS cannot be used in relation to the following:

  • Supplies of services other than telecommunications, broadcasting or e-services;
  • Supplies to non-taxable customers in a Member State where the supplier has established his or her business or has a fixed establishment (VAT on those supplies will be accounted for in the normal VAT return of that Member State);
  • Business to business supplies (including telecommunications, broadcasting or e-services); and
  • Supplies of goods.