Telecommunications, broadcasting and electronic (TBE) services - new rules (2015)
From 1 January 2015, the rules around the European Union (EU) VAT place of supply of services changed. This affected the sales of telecommunications, broadcasting and electronic (TBE) services from a business to a customer. The place of taxation will be determined by the location of the customer.
What are TBE services?
Telecommunications services are defined as services relating to the transmission, emission or reception of signals, writing, images and sounds or information of any nature by wire, radio, optical or other electromagnetic systems. This includes the related transfer or assignment of the right to use capacity for such transmission, emission or reception, and the provision of access to global information networks.
Broadcasting services includes services consisting of audio and audio-visual content (for example radio or television programmes). These programmes are provided to the general public via communications networks by and under the editorial responsibility of a media service provider, for simultaneous listening or viewing, on the basis of a programme schedule.
The definition of broadcasting services also covers the distribution of radio and television programmes via electronic networks such as the internet but only if they are broadcast for simultaneous listening or viewing. The definition does not cover on-demand programming, a service which, in return for a specific fee, provides access to a customer to specific programmes at the time the customer demands. On-demand programming qualifies as an electronically supplied service as detailed below.
Electronically supplied services
An electronically supplied service or e-service as it is also known, is a service that is delivered over the internet (or an electronic network which is reliant on the internet or similar network for its provision). The e-service is heavily dependent on information technology for its supply. This means the service is essentially automated, involves minimal human intervention and in the absence of information technology does not have viability.
The use of the internet to convey information (for example by e-mail) in the course of a business transaction does not change the nature of the transaction and make it a supply of an e-service.
Particular care should be taken where a service includes both electronic and other elements. The VAT treatment of such composite or multiple supplies must generally be considered on a case-by-case basis. Contact should be made with your Revenue office where any doubt remains.
Next: New place of supply rules