Welcome to our monthly VAT News intended for companies having activities across the 28 Member States.
You will find here below updated information and schemes on a country-by-country basis.
E.U., Germany, Poland, Romania, Slovenia & United-Kingdom .
EUROPEAN COURT OF JUSTICE
Simplified Scheme for Triangulation Transactions (C-386/16)
In accordance with earlier case law regarding A-B-C transactions, the ECJ ruled that the first sale (of A) may not be exempted of VAT - where goods are to be delivered directly to the final customer (C) - whilst they are still physically in the country of the first supplier (A).
Where the first supply may not be zero-rated, the processing or the transformation of goods is not to affect the possibility to zero-rate the subsequent supply.
That case-law again shows that the allocation of transport to a well-defined supply in the chain is crucial. However, it is somewhat disappointing in the sense that it assumes that the second supply occurs before intra-EU shipment without giving any concrete indications. In case of supply chain, notably in trading raw products, one must pay a very specific attention to the logistic terms and conditions between A-B and B-C.
Excessive Investigation Procedure - Late Payment Interest due by Tax Authorities (C-254/16)
The payment of default interest may not be refused by Tax Authorities where the duration of the tax investigation procedure is excessive and cannot be attributed entirely to businesses.
Transport Services connected to Export Supplies (C-288/16) – Conditional Zero-rating
The transport of goods to a non-EU country may be zero-rated in so far as those services are provided directly to the consignor or the consignee of the goods.
This is a quite strict interpretation of the scope of that exemption. Where such transport is supplied to a person other than the exporter or the acquirer out of the EU, the zero-rate may not be relied upon. That is likely to affect the VAT regime applied to sub-contracted activities inter alia in the logistic sector.
9th Directive VAT Refund - Stricter Approach of formal requirements
As of 20/07/2017, legal changes must be obeyed by foreign claimants. The amendments are already applicable to the refund applications regarding VAT incurred in 2016 and to be filed by 30 September 2017.
Accordingly, invoices and import documents are only accepted, if they are filed completely. Otherwise, the refund application could be considered as invalid and/or void by the German Tax Authorities.
Split Payments – Deferment
Poland has decide to post-pone the introduction of anti-VAT fraud Split Payments to 01/04/2018 instead of 01/01/2018.
Split Payments – Measure against Fraud Practices
After Poland, the Romanian tax authorities put in place a split payment system. Businesses (including non-established ones in Romania) will be required to open a specific bank account to collect payments of Romanian VAT.
Optional for now, it will be compulsory as from 01/01/2018.
Dispensation of VAT registration for several zero-rated activities
Taxable person not established in Slovenia which carry out export supplies, international transport of passengers (except road transport), supplies of goods and services under customs procedures, and supplies of certain goods and services in customs warehouse, amongst others, are not required to register for VAT in Slovenia.
Brexit & VAT
The UK Authorities have stressed that if a deal cannot be agreed upon at the time when UK effectively leaves the European Union, customs duty and import VAT on goods importing from the EU would be due.
Such a taxation could affect the cash-flow situation of EU businesses exporting to the UK and generate non-refundable customs duties.