VAT rules for supplies of digital services to consumers in the EU

Find out about the VAT place of supply rules if your business sells digital services to private consumers in the EU.

How to determine the place of supply and taxation

For VAT purposes the place of supply rules set a common framework for deciding in which country a transaction should be subject to tax.

For supplies of cross-border digital services to non-business consumers in the EU you should check:

Businesses established in the UK

The rules only apply where a UK business:

  • charges consumers for digital services (digital services given free of charge are not affected by the rules)
  • supplies services from the UK to private consumers in another EU member state
  • has EU consumers that are not VAT-registered businesses
  • does not sell digital services through a third-party platform or marketplace (not your own website) - read digital platforms and accounting for VAT for more information

For cross-border supplies of digital services on a business-to-consumer basis, the place of supply will be the UK on or after 1 January 2019 if:

  • your business is not established in any other EU member state
  • the total value of the cross-border digital sales is less than £8,818 in the current year and previous calendar year

The place of supply of any digital services made before 1 January 2019 will be where the consumer is located.

Threshold for supplies made from 1 January 2019

To work out the value of your digital sales, you must use the figures before VAT is added.

The digital supplies threshold is £8,818. If the annual value of your total cross-border supplies of digital services to consumers in the EU in the current year and previous year is:

  • below the threshold, the place of supply is the UK
  • over the threshold, the place of supply is where the consumer is located


A UK business has supplies of digital services to consumers in other EU member states with a value of less than £8,818 in the calendar year ending 31 December 2018.

During the next calendar year (2019) the total value of their supplies of digital services to consumers in other EU member states is £8,800. The place of supply for all these transactions will be in the UK.

The next supply to an EU consumer in the 2019 calendar year is for £50. When added to the existing £8,800 it equals £8,850, taking the total value over the £8,818 threshold. The £50 supply will be treated as being made where the consumer is located, as will any subsequent supplies made in that calendar year and the next calendar year.

Place of supply elections

From 1 January 2019, UK businesses under the digital services threshold can elect to treat the place of supply as where the consumer is located. If this applies, you must continue to apply this treatment from the day you make the election until the end of that calendar year, and the next 2 calendar years.

You need to tell HMRC about any election within 30 days of the date of the election.

You should include:

  • your business name
  • your business address
  • the date your election was made

Send your elections by email to:, or in writing to:

HM Revenue and Customs - VAT Written Enquiries Team
Alexander House
21 Victoria Avenue
SS99 1BD
United Kingdom

Businesses established outside the EU

If you are based outside the EU and supply digital services to consumers in the EU, the place of supply will be where the consumer is located.

You’ll either have to:

The £8,818 digital services threshold does not apply and you’re responsible for accounting for VAT on the supply regardless of the value of the sales.

VAT accounting options for UK businesses supplying digital services to consumers

Unless you sell digital services entirely through digital platforms or marketplaces, who take on responsibility for accounting for the VAT due, you must consider how you intend to account for VAT on supplies of digital services to consumers.

You must first consider the place of supply rules. Where you have supplies with VAT due in another EU member state you must either:

  • register for the Union VAT MOSS
  • register for VAT in every EU member state where you make digital supplies to consumers, file returns and make payments to the tax authorities in each of those member states

You should register for and use the UK VAT MOSS scheme because it makes accounting for VAT due in all the EU member states much easier.

If you’re below the UK VAT registration threshold you need to register for UK VAT to use the UK VAT MOSS scheme. You can charge and account for VAT on your EU cross-border business-to-consumer supplies, but will not have to charge and account for VAT on your UK domestic supplies.

You’ll be able to reclaim any VAT charged on business expenses directly related to your cross-border digital service supplies.

Where your supplies fall below the £8,818 threshold and are treated as made in the UK, you should add these to your other taxable supplies when considering the VAT registration threshold.

VAT accounting options for non-EU businesses supplying digital services to EU consumers

If you have no fixed business establishment in the EU, the place of supply will be where the consumer is located. You’ll have to register for either:

  • the Non-Union VAT MOSS scheme
  • VAT in every EU member state where you make digital supplies to consumers, file returns and make payments to the tax authorities in each of those member states

You may also need to be registered for VAT as a non-established taxable person and send a separate VAT Return if you make supplies other than those covered by these rules.

Defining digital services

Radio and television broadcasting services

These include:

  • the supply of audio and audio-visual content for simultaneous listening or viewing by the general public on the basis of a programme schedule by a person that has editorial responsibility
  • live streaming through the internet if broadcast at the same time as transmission by radio or television

Telecommunications services

This means transmission of signals of any nature by wire, optical, electromagnetic or other system and includes:

  • fixed and mobile telephone services for the transmission and switching of voice, data and video, including telephone services with an imaging component, otherwise known as videophone services
  • telephone services given through the internet, including Voice over Internet Protocol (VoIP)
  • voice mail, call waiting, call forwarding, caller identification, 3-way calling and other call management services
  • paging services
  • access to the internet

It does not cover services just given over the telephone, such as call centre help desk services.

Electronically supplied services

These rules only apply to e-services that you supply electronically and includes things like:

  • supplies of images or text, such as photos, screensavers, e-books and other digitised documents, for example, PDF files
  • supplies of music, films and games, including games of chance and gambling games, and programmes on demand
  • online magazines
  • website supply or web hosting services
  • distance maintenance of programmes and equipment
  • supplies of software and software updates
  • advertising space on a website

Sales not affected by these rules

Using the internet, or some electronic means of communication, just to communicate or facilitate trading does not always mean that a business is supplying e-services. Using the internet for the following does not count:

  • supplies of goods, where the order and processing is done electronically
  • supplies of physical books, newsletters, newspapers or journals
  • services of lawyers and financial consultants who advise clients through email
  • booking services or tickets to entertainment events, hotel accommodation or car hire
  • educational or professional courses, where the content is delivered by a teacher over the internet or an electronic network (in other words, using a remote link)
  • offline physical repair services of computer equipment
  • advertising services in newspapers, on posters and on television

Defining ‘electronically supplied’

This covers e-services which are automatically delivered over the internet, or an electronic network, where there’s minimal or no human intervention. This can be either:

  • where the sale of the digital content is entirely automatic, for example, a consumer clicks the ‘Buy Now’ button on a website and either the:
    • content downloads onto the consumer’s device
    • consumer gets an automated email containing the content
  • where the sale of the digital content is essentially automatic, and the small amount of manual process involved does not change the nature of the supply from an e-service

All e-services that are electronically supplied in these ways are digital services.

Examples of electronic supplies and whether or not they’re ‘digital services’

Service e-service Electronicallysupplied Covered by the rules
PDF document manually emailed by seller Yes No No
PDF document automatically emailed by seller’s system Yes Yes Yes
PDF document automatically downloaded from site Yes Yes Yes
Stock photographs available for automatic download Yes Yes Yes
Live webinar No No No
Online course consisting of pre-recorded videos and downloadable PDFs Yes Yes Yes
Online course consisting of pre-recorded videos and downloadable PDFs plus support from a live tutor Yes No No
Individually commissioned content sent in digital form, for example, photographs, reports, medical results Yes No No
Link to online content or download sent by manual email Yes Yes Yes

To find out more about what is and is not a digital service read the explanatory notes and the annex on page 86 on the European Commission’s website.

This is a fast-changing area. These examples are only illustrations and do not give a comprehensive and definitive list of what is considered to be a digital service. If, after reading the detailed guidance that’s available you’re still unsure whether your supplies are digital services, email:

Bundled or multiple supplies

Where a business supplies a consumer with a package of services, or goods and services, the business will have to decide whether the complete package should be considered and taxed as a single (bundled) supply, or multiple separate supplies, where each element should be separately taxed. Examples of a bundled supply include a:

  • technical journal with supplementary online content
  • DVD with access to online streaming of content
  • music CD with digital download

A digital supplier must apply the normal approach to bundled or packaged supplies. Read more technical guidance about VAT Supply and Consideration.

How to determine whether the customer is in business (a taxable person) or is a private consumer

If you supply digital services and your customer does not give you a VAT registration number (VRN), you should:

  • treat it as a business-to-consumer supply
  • charge the VAT due in the customer’s EU member state

If a customer cannot supply a VRN but claims they’re in business but not VAT-registered because, for example, they’re below their EU member state’s VAT registration threshold, you can accept other evidence of your customer’s business status. For example, a link to the customer’s business website or other commercial documents.

It is your decision whether to accept alternative evidence that the customer is in business and your customer cannot ask you to treat a supply as business-to-business if they have not given a valid VRN.

If you accept that your customer is in business, the supply does not come within the scope of these business-to-consumer arrangements. With a cross-border business-to-business supply the customer will be responsible for accounting for any VAT due to the tax authorities in their EU member state.

You must complete and submit a quarterly European Community Sales List declaration to HMRC. This allows other EU member state tax authorities to ask for details from the database where these declarations are securely stored, for taxpayer compliance and audit purposes.

How to determine the location of the consumer

The place of supply of cross-border digital services is the consumer’s location, which is determined by where the consumer usually lives.

For example, for a UK expat living in Spain the location would be Spain.

Place of supply ‘presumptions’

To try to simplify the rules for some supplies of digital services the supplier can make a presumption about the place where the supply is to be taxed. Where the presumptions apply, the business does not need to know in which country the consumer of the digital service resides. This in turn means that where a digital services supply is made through one of these locations , the business supplying the service does not need to get any additional evidence to justify in which member state the VAT is due.

Types of supplies covered by the presumption rule include where the digital service is supplied:

  • through a telephone box, a telephone kiosk, a wifi hotspot, an internet café, a restaurant or a hotel lobby (VAT will be due in the EU member state where those places are actually located, so if a German tourist makes a call from a telephone box in France, VAT will be due in France)
  • on board transport travelling between different countries in the EU (VAT will be due in the EU member state of departure, for example, if a ferry operator provides a wifi hotspot on board ship which is available to passengers for a fee, VAT will be due in the EU member state of departure and will not depend on a passenger’s place of residence)
  • through a consumer’s telephone landline (VAT is due in the EU member state where the consumer’s landline is located)
  • through a mobile phone (the consumer location will be the EU member state country code of the SIM card, so if a French resident downloads an app to their smartphone while on holiday in Italy, VAT will be due in France)
  • in the EU member state for the postal address where the decoder is located or the viewing card is sent (if a UK resident has a satellite television system in their Spanish holiday home, VAT will be due in Spain)

Circumstances where the presumptions do not apply

When these circumstances do not apply, the business making the supply must get and keep evidence to show which EU member state the consumer is normally located in.

Examples of the type of supporting evidence that tax authorities will accept include:

  • the billing address of the consumer
  • the Internet Protocol address of the device used by the consumer
  • consumer’s bank details
  • the country code of the SIM card used by the consumer
  • the location of the consumer’s fixed landline through which the service is supplied
  • other commercially relevant information - for example, product coding information which electronically links the sale to a particular jurisdiction

If the total value of the cross-border digital sales:

  • is below £88,183 before VAT in the current year and previous calendar year, one piece of evidence is required (this cannot be ‘other commercially relevant information’)
  • exceeds £88,183, 2 pieces of non-contradictory evidence are required for that supply and all supplies after it

Businesses using payment service providers

A business which makes cross-border digital service supplies must get and keep 2 pieces of information as evidence of where a consumer normally lives. This shows that the correct rate of VAT has been charged and will be accounted for to the correct EU member state tax jurisdiction.

For many micro and small businesses this requirement may be challenging. For micro and small businesses that use payment service providers, try the following approach:

  • at the point of sale, ask the consumer for details of either their:
    • billing address, including the EU member state
    • telephone number, including the EU member state dialling code
  • when the consumer pays for the digital service, you’ll need to get from the payment service provider a notification advice containing the 2-digit country code of the consumer’s EU member state of residence as listed in their records

If the 2 pieces of information match, that’ll be enough to define the consumer’s location and you can record the details in your accounting records. If the information does not match, you must contact the consumer and ask them to resolve the discrepancy between the 2 pieces of information.

Support for VAT MOSS registered micro-businesses

UK micro-businesses, that are below the current UK VAT registration threshold and are registered for the VAT MOSS scheme, may use their best judgement and base their consumer location VAT taxation and accounting decisions on a single piece of information. That information can be the billing address given by the consumer or information given to them by their payment service provider.

Place of supply of educational services

Applying the place of supply rules to educational services can sometimes be confusing. We’ve given the following examples so that UK businesses can establish how to consider and tax these services.

Services given by a person

Education, training, or a similar service delivered by a person over the internet or an electronic network (such as a webinar), is not considered to be an electronically supplied service because an actual person is involved in the delivery. These services are not within the scope of this guidance.

Services given through automated learning

Automated learning does not have human involvement and is therefore a digital service.

Educational examination services

The place of supply for educational examination services, for example, marking or assessing completed examination papers, will depend on whether or not the service needs or involves any human intervention. For example, a digital service is where a student must complete and submit an online examination paper which is automatically checked and scored by computer. But, if the service involves the completed examination paper being marked by an assessor, it will not be a digital service covered by the rules. The place of taxation will be the place where the service is performed.

This table shows examples of typical supplies of business-to-consumer education or examination services, and the place where the supply is to be taxed.

Type of examination service Business-to-consumer rules from 1 January 2015
Admission to event (not an e-service) Where event takes place
Distance learning using webinars or remote tutors (not an e-service) Supplier’s place of establishment
Automated learning (no human involvement) (e-service) Consumer’s address or residence
Examination services - human involvement Education where performed
Examination services - automated Consumer’s address or residence

VAT rates and obligations in other EU member states

For information about the VAT rates that apply to supplies of digital services in other EU member states, as well as any other obligations (for example, VAT invoice requirements), businesses should refer to the tables in telecommunications, broadcasting and electronic services, available from the European Commission’s website.

Member state tax authorities must notify the Commission about any changes to their VAT rates or other obligations so businesses can rely on the accuracy of this published information.

All businesses will need to consider how charging for the foreign rate of VAT will affect their prices. For example, the business will need to decide whether to charge a single price and to absorb the variable VAT rates. Alternatively, a business may decide to vary the price of its digital service products to reflect the different amounts of other EU member states’ VAT that’s due.

Digital portals, platforms, gateways and marketplaces

If you supply e-services to consumers through an internet portal, gateway or marketplace, you need to determine whether you’re making the supply to the consumer, or to the platform operator.

The platform operator is supplying the consumer if the platform operator identified you as the seller but, sets the general terms and conditions, authorises payment or handles delivery or download of the digital service. Then the platform operator would be responsible for accounting for the VAT payment that’s charged to the consumer.

Digital platforms and accounting for VAT

If you operate a digital platform that third-parties sell e-services through, you’re liable to account for the VAT on those sales unless you meet all of the following conditions:

  • digital platforms and everyone else involved in the supply must identify who the supplier is in their contractual arrangements
  • invoices, bills or sales receipts must identify that supplier and the service supplied
  • digital platforms must not:
    • authorise the charge to the consumer
    • authorise the delivery
    • set the general terms and conditions of the sale

If you do not meet all these conditions:

  • you must treat the sales of third-party e-services as if they were your own
  • you must declare any VAT that is due
  • the responsibility for accounting for any VAT moves back to the person who supplied you if you’re giving intermediary services to that person

How to clarify your status

Because of these conditions the vast majority of digital platforms will be liable to account for the VAT on the third party sales. But if you’re unsure about your responsibility, read the guidance about non-statutory clearances.

Role of payment services

If your only role in the supply is to provide for the processing of payments you’re not regarded as a digital platform and you do not have to account for the VAT.

Published 19 December 2014
Last updated 19 November 2018 + show all updates
  1. Guidance about the place of supply rules and VAT accounting options for businesses established in the UK and businesses established outside the EU has been updated.

  2. First published.