2015 VAT – More than just a tax concern
From 1 January 2015, tax regulations are changing for the sale of digital products and services across the EU (e.g. e-books, music, software, games, online newspaper subscriptions).
Instead of VAT being paid in the country of the supplier, it will become payable in the country where the customer resides. Overnight, the content delivered from a supplier in say, Luxembourg to a customer in Hungary, will rise from 15% to 27%.
This will be a major change for Technology, Media and Telecommunications companies selling digital services across borders to private customers, not just from a tax perspective, but across the wider business, including sales, marketing, finance, systems and legal teams.
Are you ready?
Who in your business has single point accountability for getting all business units ready for this change?
Now is the time to ask: with just a few months to go, impacted businesses are really waking up to the scale of the change.
Those who aren’t ready in time risk reduced margins and profit, VAT penalties, reputational damage and loss of customers. Those who understand the impacts early are in a better place, not just to mitigate risk, but also to leverage opportunities over their competitors e.g. by reassessing their pricing strategy and focusing on their customers.
How EY can help
We have a dedicated and experienced tax and business advisory team focused on the telecommunications, media and technology industries. Our global footprint means we have the necessary experience working across multiple tax jurisdictions.
Our team has the know-how to guide you through the financial, commercial and practical implications of the changes ahead so that you’re all set for 1 January 2015.