Impact of "use and enjoyment" rules on freelance software development and deep subcontracting

Hi. Suppose the following situation: A freelancer based in Germany (registered as a single-person-company in Germany) provides software development services (to be specific, this means writing / editing source code, not selling a software product themselves) over the internet to a UK company A. Despite company A being registered for VAT in the UK, company A does NOT make use of the reverse charge procedure, so the responsibility to pay VAT is on the freelancer. In addition to that, most of the development services actually happen for an US company B, who bought services from company A. So the freelancer contributes to development of company B's software most of the time. Since it is a B2B transaction, it seems the VAT has to be paid by the freelancer to the place of supply country. Questions that arise here: - Is the place of supply in this scenario the UK, regarding work on company B's product? I'm not sure if "use and enjoyment" rules could apply here. I think this depends on the following questions: - Can those rules cross company boundaries, i.e. does the freelancer have to care about where company B is registered? - Is writing / editing source code and transmitting the results over the internet an "electronically supplied service"? - Does some of the code being open source have any impact on where "use and enjoyment" happens? (though most of it is not open source) - Is company A actually allowed to NOT make use of the reverse charge procedure here, despite being registered for VAT in the UK? Kind Regards

Hi.
If the freelancer in Germany is providing these services to a Business in the UK then it is the responsibility of the UK business to account for the VAT on the reverse charge.
The reverse charges isn't an optional procedure, it's a mandatory one where:
the place of supply is the UK
the supplier belongs outside the UK
you belong in the UK
the supply is not exempt (this includes exempt supplies subject to an option to tax)
for supplies not within the general rule, you’re VAT registered in the UK.
Please see the definition of electronically supplies services below:
Defining digital services
The Use and Enjoyment Rules wouldn:'t come in to this scenario based on the following decription:
The use and enjoyment rules are intended to make sure taxation takes place where services are consumed where either services are consumed within the UK but would otherwise escape VAT, or they would be subject to UK VAT when consumed outside the UK.
Please see the guidance below:
Use and enjoyment