Key strategic developments in VAT known as the "VAT Package" have been approved by ECOFIN in 2007. These include new rules for the place of supply of service, improved cross border refund procedures and greater tax administration cooperation. The changes will take place over a period between 2010 and 2018.
Reverse charge widened
For B2B transactions this will mean the reverse charge will apply to most imported services, with certain exceptions.
There are particular implications for:
- Self supply charges for exempt businesses and those with part business/ non-business e.g. charities
- Increased administrative compliance burden for preparing sales lists, which may extend to monthly returns and reporting on purchases as well as sales of services
Electronic refund procedure for 8th directive VAT refunds
This should improve recoveries.
Administrative changes
One stop shop for supplies of telecoms, broadcasting and electronic services to consumers from 1.1.2015.
Sales lists
Businesses will be obliged to determine whether a customer in another member state is a business person and the transaction is taxable in that state. Penalties exist in most member states for failure to account for tax properly and/or fill in a Sales List correctly.
Consequences for Business
Business and other institutions such as charities should be considering their position now, in particular concerning the reverse charge. We will be discussing the background to the changes, the proposals for implementation by HMRC in the UK, and what strategic options are available to reduce or mitigate these charges.
There are also harmonisation and information gathering issues and a team of CMS advisers from other European member states will make some brief comments.
If you are interested in attending a seminar the VAT package and its implications, please click here to view an agenda and instructions on how to register your place.
This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq
Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.
The original publication date for this article was 27/11/2008.
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