What is VOES?
Following adoption of the VAT on E-Commerce Directive in May 2002, the European Union (EU) amended the rules which determine where electronic services are subject to VAT. In particular, where these services are supplied by non-EU businesses to private individuals or non-business organisations such as government departments in the EU ie business to consumer (B2C), they are taxed in the country where the customer resides. These rules came into effect from 1 July 2003. To prevent the need for these non-EU businesses to register in every EU Member State where they supply customers, a special VAT scheme allows them to register and account for EU VAT in a single EU Member State of their choice. The scheme only applies to supplies to private individuals and other non-business organisations. It does not apply to supplies to business customers in the EU who will account for any tax due using the ‘reverse charge’ procedure.
