Account for MOSS sales in Xero

If you provide digital services to consumers in the EU, and have registered for HMRC's MOSS scheme, set up Xero to record and report MOSS sales. You'll need to complete your VAT MOSS return outside Xero.

How do MOSS sales appear in the VAT Return in Xero?

Sales using a tax rate with a MOSS Sales tax type are not included in the VAT Return, but they are listed on the VAT Audit Report.

Set up MOSS tax rates

Add a separate tax rate for each EU member state where you make MOSS sales. Choose the tax type MOSS Sales. Use these tax rates on your invoices for MOSS sales so these sales can be easily tracked and reported.

We recommend you name your MOSS tax rates in the format: MOSS + Country Name + Amount % so that they appear together in your tax rate list in Xero.

Image showing new tax rate set up for MOSS.

Run the Account Transactions report to prepare for your VAT MOSS return

Run the Account Transactions report to find your MOSS sales for your VAT MOSS return. If you're registered for VAT on the cash basis, you must run the report on the accrual basis to comply with HMRC requirements.

In Report Settings for the Account Transactions Report:

  • Select Accrual for the accounting basis.
  • Group by VAT Rate Name.
  • Include the following columns:

    • Gross
    • VAT
    • VAT Rate

Image showing report settings.

Your report will display as follows:

Image showing Account Transactions report with VAT MOSS transactions.