Due to the end of transition period of Brexit, from Q1 of year 2021 the Estonian company cannot declare on its MOSS return digital services rendered to UK B2C consumers and the UK cannot be declared there as a state of consumption. Therefore, there are changes in the declaration of VAT on these digital services, which have been provided to such UK consumers, which are not registered for VAT in the UK.
Pursuant to above, from 2021 the Estonian company must follow only the UK VAT rules when declaring such digital services rendered to UK B2C consumers. Such digital services are not declared in the Estonian VAT return.
Thus, the Estonian company which provides respective services to UK B2C consumers must from year 2021 register itself for VAT purposes in the UK, i.e. apply for the regular UK VAT number and commence to declare its digital sales to UK B2C consumers quarterly to the UK tax authorities. As in these circumstances there is no threshold for VAT registration, then the registration liability arises for the Estonian company immediately upon rendering such digital services, regardless of the amount of total turnover of these services during a calendar year.
We offer tax advice as a separate service as well as part of our accounting service.
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