Several EU Member States have agreed to participate in a test case for private VAT ruling requests relating to cross-border situations.
Businesses who want to engage in a complex cross-border transaction involving two or more Member States may submit their project to the tax administration of their country of residence. On this basis tax authorities, after consulting with tax administrations of other Member States involved, will give businesses reassurance on the appropriate VAT treatment and applicable obligations in all Member States concerned
The test case started on 1 June 2013 and is scheduled to last until September 2018. The following Member States participate in this project: Belgium, Denmark, Estonia, Spain, France, Cyprus, Lithuania, Latvia, Malta, Hungary, Netherlands, Portugal, Slovenia, the United Kingdom, Finland, Sweden, Italy and Ireland.
You will find hereafter recent published decisions.
Member Stats concerned: Sweden, United Kingdom & Portugal
Facts:
A Swedish school organizes in-service teacher training courses in the UK and Portugal for teachers and school staff. The participants come from different countries in Europe and different schools. The training courses last for a maximum of 6 days. The Swedish school procures accommodation, food, and local transport and re-invoices all of these costs to the schools signed up to the courses. The schools are invoiced for the full package, including course materials.
Ruling:
The Tour Operators Margin Scheme should be applied on the supply of accommodation, food and local travel arrangements as these supplies are bought-in and not in-house services. The place of supply for those services will be Sweden [where the provider re-invoicing the costs is established]. The training arrangements are in-house services that should be considered as admission to an event taxable in the UK or Portugal depending on where the event takes place.
Comments
NPOs organizing events regularly re-invoice costs separately such as accommodation, catering, etc. with local VAT to participants. In some Member States [e.g. the United Kingdom], this VAT treatment could be challenged by local authorities considering such transaction as falling into the scope of the margin regime of travel agency. As a consequence, no local VAT should have been charged to participants and VAT incurred on the costs would not be recoverable.
Member States concerned: Spain & the United Kingdom
Facts:
A Spanish company has exclusive right to offer promotion and hospitality areas at race tracks hosting Moto GP motorcycle racing world championships events.
Ruling:
- Providing access to the designated areas [specifically the areas around the trackside], renting space to customers using those areas to put up their own stand and/or sell products is a service referring exclusively to the letting of immovable property [retail space] and therefore taxable where the immovable property is located.
- The sale of VIP Village passes is a supply of an admission service taxable where the event takes place.
- The “personalization” services involving a particular area where the customer can have his own promotional material as a way to be identified by the guests, can be considered as advertising services taxable where the customer is established [on the condition that the personalization services are to be considered as a single supply].
Comments
NPOs organizing events regularly often propose package deals to sponsors [access to special areas, VIP Passes, stand rental, etc.]. NPOs should be very cautious with respect to the qualification and localization of these services for VAT purposes in order to avoid possible litigation with local VAT authorities. Therefore, precise definition of benefits offered in the packages is crucial in determining correct VAT treatment.
Member States concerned: Belgium and The Netherlands [No agreement in a similar case concerning other Member States]
Facts:
A company A of MS 1 organizes a training in MS 2, to be attended by employees of other group companies only (i.e. “in house” training). Company A issues invoices to the group companies for the training services, notably to a company B in MS 3.
Question:
What is the place of supply of the services invoiced by company A to company B? Is this in MS 2 (place of the event; in accordance with Art. 53 of dir. 2006/112) or MS 3 (MS of the recipient; in accordance with Art. 44 of dir. 2006/112)?
Answer:
The place of supply is MS 3 (MS of the recipient).
Member States concerned: Belgium, United Kingdom
Facts:
Company A of MS 1 organizes an event in MS 1, where some new products are presented to its clients. Some clients from MS 2 attend this event. These clients are taxable persons. For the clients from MS 2, the following invoice flow is applied: company A charges a participation fee to its subsidiary AA in MS 2, which recharges this fee to the clients in MS 2. The amount invoiced to the clients includes the transportation and accommodation costs + a margin (cost plus).
Question:
What is the place of supply of the services recharged by subsidiary AA in MS 2 to the clients in MS 2? Is this place in MS 1 (place of the event; in accordance with Art. 53 of dir. 2006/112), MS 2 (MS of the clients; in accordance with Art. 44 of dir. 2006/112) or MS 2 (MS of the supplier; in accordance with Art. 307, 2nd para., relating to the special scheme for travel agencies).
Answer:
The place of the supply of services is in MS 2; in accordance with Art. 307, 2nd para., of dir. 2006/112.