I run a VAT registered LTD company in the UK. I run an online blog and offer advertising space on this website for sale, customer’s pre pay for a period for example 6 months to advertise their products on the website. The website is physically hosted in the UK. This is a standard website with open access, that can be accessed from anywhere in the world. The general trend is that most views are received from America, India, UK in that order. I need to understand how to charge VAT to business customers buying advertising space who have their registered address outside of the UK.
In summary how would I charge VAT for online advertising services to customers inside the EU? And outside the EU?
If your business sells certain digital services to consumers in the wider EU, from 1st January 2015 you have to charge them local VAT based on where they used the service.
Instead of having to register for VAT with all the different countries in the EU where you may have customers, you can register with HMRC in the UK to use their “Mini One Stop Shop” (MOSS) and report and pay the VAT you charge under these rules to HMRC instead.
Please note, you have to charge this local VAT even if you are not registered for UK VAT!
Supplies to businesses, and sales of physical goods, are not affected by these new rules.
Outside EU – outside the scope
You will need to have proper systems in place to capture the data.