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HMRC internal manual

VAT Place of Supply of Services

Other services to non-EU customers (B2C): Electronically supplied services

Electronically supplied services include:

  • the supply of digitised products generally, including software and changes to or upgrades of software
  • services providing or supporting a business or personal presence on an electronic network such as a website or a web page
  • services automatically generated from a computer via the Internet or an electronic network, in response to specific data input by the recipient
  • the transfer for consideration of the right to put goods or services up for sale on an Internet site operating as an online market on which potential buyers make their bids by an automated procedure and on which the parties are notified of a sale by electronic mail automatically generated from a computer
  • Internet service packages (ISP) of information in which the telecommunications component forms an ancillary and subordinate part (that is, packages going beyond mere internet access and including other elements such as:

    • content pages giving access to news, weather or travel reports;
    • playgrounds;
    • website hosting;
    • access to on-line debates.

The legalisation also gives the following examples:

  • website supply, web hosting and distance maintenance of programmes and equipment
  • supply of software and updating thereof
  • supply of images, text and information, and making databases available
  • supply of music, films and games, including games of chance and gambling games, and of political, cultural, artistic, sporting, scientific and entertainment broadcasts and events
  • supply of distance teaching.

The following definitions of electronically supplied services were unanimously agreed by all Member States at the 67th Meeting of the EC VAT Committee

  • website hosting and web page hosting
  • automated, online distance maintenance of programmes
  • remote systems administration
  • online data warehousing (that is where specific data is stored and retrieved electronically)
  • online supply of on-demand disc space
  • accessing or downloading software (for example procurement/accountancy programmes, anti-virus software) plus updates
  • banner blockers (software to block banner adverts showing)
  • download drivers, such as software that interfaces PC with peripheral equipment (for example printers)
  • online automated installation of filters on websites
  • online automated installation of firewalls
  • accessing or downloading desktop themes
  • accessing or downloading photographic or pictorial images or screensavers
  • the digitised content of books and other electronic publications
  • subscription to online newspaper and journals
  • web logs and website statistics
  • online news, traffic information and weather reports
  • online information generated automatically by software from specific data input by the customer, such as legal and financial data (for example continually updated stock market data)
  • the provision of advertising space (for example banner ads on a website/web page)
  • use of search engines and Internet directories
  • accessing or downloading of music onto PCs, mobile phones, and so on
  • accessing or downloading of jingles, excerpts, ring tones, or other sounds
  • accessing or downloading of films
  • web-based broadcasting that is only provided over the Internet or similar electronic network and is not simultaneously broadcast over a traditional radio or television network
  • downloads of games onto PCs, mobile phones, and so on
  • accessing automated online games which are dependent on the Internet, or other similar electronic networks, where players are remote from one another
  • teaching that is automated and dependent on the Internet or similar electronic network to function, including virtual classrooms
  • workbooks completed by pupil online and marked automatically, without human intervention
  • online auction services (to the extent that they are not already services considered to be web hosting included services under Item 1) that are dependent on automated databases and data input by the customer requiring little or no human intervention (for example an online market place or online shopping portals)
  • Internet Service Packages (ISPs) in which the telecommunications component is an ancillary and subordinate part (in other words a package that goes beyond mere Internet access comprising various elements (for example content pages containing news, weather, travel information; games for a; web hosting; access to chat-lines, and so on).

Electronically supplied services are subject to the use and enjoyment provision where the place of supply is outside the EU but consumption takes place with the UK (see VATPOSS15000).