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Special schemes for VAT taxable persons in the EU supplying TMT services


The Commission Implementing Regulation No. 815/2012, Council Regulation (EU) No 904/2010, Directive No. 2008/8 have laid down detailed rules for the application of the special schemes for VAT taxable non-established and established persons in the EU supplying telecommunications, broadcasting or electronic services to non-taxable persons (established, having his/her permanent address or usually residing) within the union.

The schemes, which are amending the existing regime under Directive No. 112/2006, will come into force from 1 January 2015.

Their aim is to reflect the general principle in the European Union of taxation at the place of consumption. This is a non-exhaustive list of the services, which are falling under them:

  • Fixed and mobile telephone services;
  • Internet access;
  • Delivery of games for mobile phones;
  • Radio and TV programs delivered through an operator or Internet;
  • Delivery of software, software applications and updating of software;
  • Delivery of online courses;
  • Distanced application management;
  • Voicemail;
  • Delivery of music, movies, pictures, text and information;
  • Electronic auctions, etc.

The main benefit of the schemes is that they remove the necessity for VAT taxable non-established and established persons in the EU to register in multiple jurisdictions with regards to the provision of the same services. The person making use of the schemes will have the option to do that only in the so-called Member State of identification (the Member State of identification can be any one of the 28 Member States and is for the sole discretion of the person to choose which one it is). This one-stop shop regime is intended to reduce the technical, time and cost consuming process of an entity registering in various countries for VAT purposes.

When a person registers for the scheme, the Member State of identification will allocate him a unique VAT identification number. Consequently, the person shall submit by electronic means to the Member State of identification a VAT return (clearly stating the unique identification number) for each calendar quarter, within 20 days following the end of the tax period covered by the return. For each Member State of consumption (the member state where the supply of the services is deemed to have taken place) in which VAT is due, the VAT return will specify the total value of supplies of the respective services carried out during the tax period. The applicable rates of VAT and the total VAT due will also be indicated on the return.

Subsequently, the Member State of identification shall ensure that the respective VAT (amount the person has paid) is transferred to the bank account, which has been designated by the Member State of consumption to which the payment is due. It should be noted, that until 31 December 2018, the Member State of identification will retain a certain percentage of the sum it has received from the registered person, which will not be transferable to the Member State of consumption.

With regards to the current regime, the schemes coming into operation from the beginning of 2015 are far more reaching as they encompass not only electronic services, but also telecommunication and broadcasting ones. Moreover, another benefit of the changes coming into place is that these schemes can now be used not only by taxable persons who are not established in the European Union, but also by taxable persons established in the European Union. This will facilitate the operations of many European multi-national companies, by allowing them to streamline their accounting practices. Last but not least, the legislation also provides for more efficient use of the electronic interface in the Member State of identification in its communication with the Member State of consumption.

As a final note, it should be mentioned that the preliminary registration for the schemes will be available in all Member States from 1 October 2014. If a person is registered between the period 1 October 2014 and 31 December 2014, then the registration will be deemed to be in force from 1 January 2015. The persons who are already using the established scheme under Directive No. 112/2006 (i.e. the ones supplying electronic services) will keep their VAT identification number.


Portrait of Ivan Gergov
Ivan Gergov
Senior Associate