EUROPEAN COMMISSION
DIRECTORATE-GENERAL TAXATION AND CUSTOMS UNION
Brussels, 9 December 2020
REV3 – replaces the notice (REV2)
dated 15 June1
NOTICE TO STAKEHOLDERS
WITHDRAWAL OF THE UNITED KINGDOM AND EU RULES
IN THE FIELD OF VALUE ADDED TAX (VAT) FOR SERVICES
Contents
INTRODUCTION…………………………………………………………………………………………………2
A. LEGAL SITUATION AFTER THE END OF THE TRANSITION PERIOD………..4
1. VAT RULES FOR CROSS-BORDER SUPPLIES OF SERVICES ……………………..4
1.1. General rules…………………………………………………………………………………………4
1.2. Mini One-Stop Shop (MOSS) …………………………………………………………………5
2. VAT REFUNDS…………………………………………………………………………………………….6
B. RELEVANT SEPARATION PROVISIONS OF THE WITHDRAWAL
AGREEMENT ………………………………………………………………………………………………7
1. SUPPLY OF SERVICES ………………………………………………………………………………..7
2. REFUND REQUESTS RELATING TO VAT PAID BEFORE THE END
OF THE TRANSITION PERIOD…………………………………………………………………….8

1 REV3 highlights the time limits for refund claims set in the Withdrawal Agreement, and reflects the
fact that the application on new rules for the “One Stop Shop” in the EU has been postponed to July
2021.

INTRODUCTION

Since 1 February 2020, the United Kingdom has withdrawn from the European Union
and has become a “third country”.

2 The Withdrawal Agreement3 provides for a transition
period ending on 31 December 2020. Until that date, EU law in its entirety applies to and
in the United Kingdom.4

During the transition period, the EU and the United Kingdom are negotiating an
agreement on a new partnership, providing notably for a free trade area. However, it is
not certain whether such an agreement will be concluded and will enter into force at the
end of the transition period. In any event, such an agreement would create a relationship
which in terms of market access conditions will be very different from the United
Kingdom’s participation in the internal market,5
in the EU Customs Union, and in the VAT and excise duty area.

Therefore, all interested parties, and especially economic operators, are reminded of the
legal situation after the end of the transition period (Part A below). This notice also
explains certain relevant separation provisions of the Withdrawal Agreement (Part B
below).6

2 A third country is a country not member of the EU.
3 Agreement on the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the
European Union and the European Atomic Energy Community, OJ L 29, 31.1.2020, p. 7 (“Withdrawal
Agreement”).
4 Subject to certain exceptions provided for in Article 127 of the Withdrawal Agreement, none of which
is relevant in the context of this notice.
5
In particular, a free trade agreement does not provide for internal market concepts (in the area of goods
and services) such as mutual recognition, the “country of origin principle”, and harmonisation. Nor
does a free trade agreement remove customs formalities and controls, including those concerning the
origin of goods and their input, as well as prohibitions and restrictions for imports and exports.
6 The IE/NI Protocol provides that EU VAT rules concerning goods apply to and in the United Kingdom
in respect of Northern Ireland (Article 8 of the IE/NI Protocol and section 1 of Annex 3 to that
Protocol). Transactions involving services are not covered by the IE/NI Protocol.

The attention of the stakeholders is in particular drawn on the following consequences: (i) Taxable
persons established in Northern Ireland will not be able to use the special scheme for declaring and
paying the VAT due in the EU on their B2C supplies of services (the MOSS “Union scheme”). They
will instead have to change their MOSS identification to the “non-Union scheme” unless they are also
established in one of the Member States (see point A.1.2 of this notice); (ii) Taxable persons
established in Northern Ireland, who are not also established in one of the Member States, will have to
request a refund of the VAT paid in a Member State on their acquisitions of services under the
conditions provided for in the 13th Council Directive 86/560/EEC (see point A.2 of this notice).

Advice to stakeholders:

To address the consequences set out in this notice, stakeholders are in particular advised
to:
− when they are established in the EU, familiarise themselves with the rules applicable
to services supplied to and received from third countries/territories;
− when they are established in the United Kingdom, examine whether new liability
rules will apply to them with regard to their services supplied in the EU;
− take the necessary steps as regards services covered by the Mini One-Stop-Shop;
− pay attention to the changes in the VAT refund request procedures and
− submit their electronic refund applications for VAT paid before the end of the
transition period in the UK (or in a Member State for UK traders) at the latest on
31 March 2021 (see below for more details).

Please note:
This notice does not address:
– EU VAT rules for the treatment of goods; 8
– EU legislation (other than VAT legislation) for the cross-border provision of certain
services, such as digital services, creative services, or business services.
For these aspects, other notices are in preparation or have been published.9
It has to be noted that the purpose of this notice is to give a general explanation on the
main consequences of the Withdrawal Agreement on the EU VAT rules applicable for
services in relation to the United Kingdom. It is not intended to explain in detail each
specific VAT rule, in particular the special schemes that will enter into force in 2021 for
services.

10 General information is available on the Taxation and Customs Union
Commission website.
11

7 https://ec.europa.eu/taxation_customs/business/vat/telecommunications-broadcasting-electronicservices/
8 A separate notice on the VAT treatment of goods has been published. See:
https://ec.europa.eu/info/european-union-and-united-kingdom-forging-new-partnership/futurepartnership/preparing-end-transition-period_en.
9 https://ec.europa.eu/info/european-union-and-united-kingdom-forging-new-partnership/futurepartnership/preparing-end-transition-period_en
10 https://ec.europa.eu/taxation_customs/business/vat/modernising-vat-cross-border-ecommerce_en
11 https://ec.europa.eu/taxation_customs/business/vat_en

LEGAL SITUATION AFTER THE END OF THE TRANSITION PERIOD

After the end of the transition period, the EU rules in the field of VAT for services12 no
longer apply to and in the United Kingdom. This has in particular the following
consequences concerning the treatment of taxable transactions in services (see below
point 1) and VAT refunds (see below point 2):

1. VAT RULES FOR CROSS-BORDER SUPPLIES OF SERVICES

1.1. General rules
EU VAT legislation provides for different regimes of VAT for cross-border
supplies of services between Member States and with third
countries/territories. The place of supply of services depends on various
factors, such as the nature of the service, whether or not the person receiving
the service is a taxable person, the place where the service is actually
provided, etc.

The withdrawal of the United Kingdom means that the way the rules will
apply for taxable persons established in the United Kingdom who supply
services in the EU and for taxable persons established in the EU who supply
services in the United Kingdom will change after the end of the transition
period.

The VAT Directive determines, via the “place of supply of services” rules
(Title V, Chapter 3), where a service supplied by a taxable person is deemed
to take place. After the end of the transition period, in case according to these
rules, the place of supply of services is situated in a Member State, the supply
will be subject to VAT in that Member State on the basis and under the
conditions of the above-mentioned Directive. If, on the other hand, the place
of supply of services is situated in the United Kingdom (or in any other third
country/territory), the supply will not be subject to EU VAT.13

As a rule, B2B14 supplies of services are situated where the customer has
established his business. Under this rule, the supply of services by a UK
business15 to an EU business16 will be taxable in the Member State where the

12 Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax (OJ
L 347, 11.12.2006, p. 1), hereafter the “VAT Directive”, and Council Directive 2008/9/EC of 12
February 2008 laying down detailed rules for the refund of value added tax, provided for in Directive
2006/112/EC, to taxable persons not established in the Member State of refund but established in
another Member State, OJ L 44, 20.2.2008, p. 23.
13 It is not the purpose to provide in the present notice an exhaustive overview of all the place of supply
rules for services; only the most basic and relevant situations are explained. There might be other or
specific rules according to the type of services and Member States have also the possibility to apply,
under certain circumstances, “effective use and enjoyment” rules to consider certain services as being
inside or outside the EU while, under the general rules, they would, respectively, take place outside or
inside the EU.
14 Business to Business.
15 Business established in the United Kingdom.

customer is established. As a rule, the customer will be liable for the payment
of the VAT due in this Member State. The supply of services by an EU
business to a UK business will be considered as situated outside the EU and
therefore not taxable under EU VAT legislation.

As a rule, B2C17 supplies of services are situated where the supplier has
established his business. Under this rule, the supply of services by EU
businesses to private individuals in the United Kingdom will be taxable in the
Member State where the supplier is established. The supply of services by UK
businesses to private individuals in the EU will be, in principle, considered as
situated outside the EU and therefore not taxable under EU VAT legislation.

However, for some services supplied by UK businesses to private individuals
in the EU, the VAT will be due in the EU and will be payable by the UK
businesses (see point 1.2. below).

Where a UK business is liable for the payment of the VAT due in a Member
State, that Member State is permitted to require the designation of a tax
representative if the taxable person supplying the services is established in a
third country that does not provide administrative cooperation and recovery
assistance for VAT.18 After the end of the transition period, this requirement
may apply to taxable persons established in the United Kingdom.

1.2. Mini One-Stop Shop (MOSS)

The B2C supplies of telecommunications, broadcasting and electronic
services are normally deemed to be situated where the customer is established.
If the customer is established in the EU, suppliers not established in the
Member State of the customer can make use of a special scheme for declaring
and paying the VAT due via the so-called Mini One-Stop-Shop (MOSS). Two
types exist: the “Union scheme” for suppliers established in the EU 19 and the
“non-Union scheme” for those that are not established in the EU.
20

MOSS allows a taxable person to submit a MOSS VAT return for each calendar
quarter and allows for a single payment to the Member State of identification.
That Member State of identification splits the MOSS VAT return by Member
State of consumption and forwards the details and the corresponding
payments to the various Member States of consumption.
After the transition period, suppliers established in the United Kingdom and
identified in the United Kingdom “Union scheme” and suppliers established
in a third country/territory and identified in the United Kingdom “non-Union
scheme” who will continue supplying telecommunications, broadcasting and
electronic services to customers in the EU will have to switch to and make use

16 Business established in the EU.
17 Business to Consumers.
18 Article 204 of the VAT Directive.
19 Articles 369a to 369k of the VAT Directive (Title XII, Special schemes, Chapter 6, Section 3).
20 Articles 358a to 369 of the VAT Directive (Title XII, Special schemes, Chapter 6, Section 2).

of the “non-Union scheme” in one of the Member States. Suppliers
established in the United Kingdom and identified in the United Kingdom
“Union scheme” who are also established in a Member State should move
their identification for the “Union scheme” from the United Kingdom to this
Member State with effect from the end of the transition period.

Suppliers established in the EU identified in one of the Member States’
“Union scheme” and suppliers established in a third country/territory
identified in one of the Member States’ “non-Union scheme” who will
continue supplying telecommunications, broadcasting and electronic services
to customers in the United Kingdom after the end of the transition period will
not be able to use the MOSS to report and pay any VAT that could be due in
the United Kingdom. They will have to comply with the rules applicable in
the United Kingdom.

To note that, as from 1 July 2021 21 , the existing MOSS will be extended to a
One-Stop Shop (OSS) and will cover, inter alia, other B2C supplies of
services that are taxable in the EU.

22 Suppliers established in the United
Kingdom who will supply those other types of services to final consumers in
the EU will have to make use of the “non-Union scheme” and register for that
purpose in one of the Member States. Suppliers established in the United
Kingdom who are also established in a Member State will have to make use
of the “Union scheme” and register for that purpose in this Member State.
23
However, it is recalled that, since the MOSS/OSS is not mandatory, suppliers
established in the UK, and making B2C supplies of services taxable in the EU,
that do not want to make use of the non-Union scheme, should register in all
Member States where the VAT is due.

2. VAT REFUNDS

VAT refunds by Member States to taxable persons established outside the EU are
subject to the following conditions24:

 The request must be submitted directly to the Member State from which the
refund is requested, in accordance with the arrangements determined by that
Member State (Article 3(1) of the Thirteenth Council Directive 86/560/EEC of
17 November 1986 on the harmonisation of the laws of the Member States
relating to turnover taxes – Arrangements for the refund of value added tax to

21 Please note that the entry into force, initially foreseen for 1 January 2021, was postponed until 1 July
2021 following the adoption of Council Decision (EU) 2020/1109 of 20 July 2020.
22 https://ec.europa.eu/taxation_customs/business/vat/modernising-vat-cross-border-ecommerce_en
23 https://ec.europa.eu/taxation_customs/business/vat/modernising-vat-cross-border-ecommerce_en
24 Further information on : https://ec.europa.eu/taxation_customs/business/vat/eu-vat-rules-topic/vatrefunds_en

taxable persons not established in Community territory25
– hereafter “13
the VAT Directive”);
 The VAT refund may be subject to a reciprocity condition (meaning that the
refund is only permitted if VAT refund is also granted by the third country or
territory to taxable persons established in the Member State concerned (Article
2(2) of the 13th VAT Directive);
 Each Member State may require the taxable person established in a third country
or territory to designate a tax representative in order to obtain the VAT refund
(Article 2(3) of the 13th VAT Directive).
Subject to the Withdrawal Agreement,26 after the end of the transition period these
rules apply to refunds of VAT in relation to supplies of services, by Member States
to taxable persons established in the United Kingdom.

B. RELEVANT SEPARATION PROVISIONS OF THE WITHDRAWAL AGREEMENT

1. SUPPLY OF SERVICES

In accordance with Article 51(2) of the Withdrawal Agreement, the VAT Directive
will continue to apply until 5 years after the end of the transition period with regard
to the taxable persons’ rights and obligations in relation to transactions with a crossborder element between the United Kingdom and the Member States that took place
before the end of the transition period.

This is, in particular, relevant for the rights and obligations in relation to the use of
the MOSS by non-EU suppliers identified in the United Kingdom, as well as
suppliers established in the United Kingdom, with regard to telecommunications,
broadcasting and electronic services supplied in the Member States, and by non-EU
suppliers registered in the Member States, as well as suppliers established in the
Member States, with regard to similar services supplied in the United Kingdom,
until the end of the transition period.

Therefore, the payment and reporting obligations in the VAT Directive in relation to
these services provided until the end of the transition period will remain applicable
after the end of the transition period. Thus, taxable persons registered for MOSS in
the United Kingdom and in the Member States will be liable to pay the VAT for
these services and will have to submit their MOSS VAT returns for the fourth
quarter of 2020 by 20 January 2021.

However, in accordance with Article 51(4) of the Withdrawal Agreement,
amendments to MOSS returns in relation to services supplied before the end of the
transition period will have to be submitted at the latest on 31 December 2021.

25 OJ L 326, 21.11.1986, p. 40.
26 See below, part B of this notice.

Article 51(2) of the Withdrawal Agreement is also pertinent for other reporting
obligations such as the recapitulative statements for, inter alia, intra-EU B2B
services. By the end of January 2021, taxable persons established in the United
Kingdom will have to submit their recapitulative statements to the UK tax
authorities for services supplied in 2020 to taxable persons established in the
Member States. Taxable persons established in a Member State will have to submit
their recapitulative statements to the tax authorities of that Member State for
services supplied in 2020 to taxable persons established in the United Kingdom.

Taxable persons should take all necessary steps to ensure that they can provide all
necessary evidence with regard to the supplies of services that they have made in, or
received from, the United Kingdom or the EU before the end of the transition period.

2. REFUND REQUESTS RELATING TO VAT PAID BEFORE THE END OF THE TRANSITION
PERIOD

According to Article 51(3) of the Withdrawal Agreement, a taxable person
established in one of the Member States or in the United Kingdom is still to use the
electronic portal set up by his State of establishment, in accordance with Article 7 of
Directive 2008/9/EC, for submitting an electronic refund application that relates to
VAT on services which was paid in, respectively, the United Kingdom or a Member
State, before the end of the transition period.

The application is to be submitted under the conditions of the Directive at the latest
on 31 March 2021.

The other rules provided for in the VAT Directive and in Directive 2008/9/EC will
continue to apply, until 5 years after the end of the transition, to these refund
applications and the previous ones relating to VAT chargeable27 before the end of
the transition period.

Advice to stakeholders:

Please note that the date of 31 March 2021 derogates from the usual rule that electronic
refund applications can be submitted until 30 September of the calendar year following
the refund period.
Stakeholders are advised to submit their electronic refund applications on time.

The website of the Commission on taxation and customs union
(https://ec.europa.eu/taxation_customs/index_en) provides general information
concerning the consequences of the United Kingdom withdrawal in the field of VAT.
These pages will be updated with further information, where necessary.
European Commission
Directorate-General Taxation and Customs Union

27 Article 14 of Directive 2008/9/EC.

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