VAT News N° 6 2018

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. & United-Kingdom.

 

E.U. COURT OF JUSTICE

Importation exempt from VAT in case of subsequent intra-EU supply 

Exemption from VAT on importation is subject to the importer subsequently making an intra-Community supply which is itself exempt from VAT. Substantive conditions have to be met in that respect.

The mere fact that the import exemption was authorised by the relevant customs authority, after a prior examination was carried out, cannot be such as to preclude any possibility of demanding payment of the import VAT after the event if it appears that the importer participated in tax evasion or failed to act diligently in order to avoid that participation.

On the contrary, if the taxable person concerned neither knew nor could have known that the supply subsequent to the imports was part of a fraud committed by the purchaser and that the taxable person had taken all reasonable steps in his power to prevent that fraud from being committed, the authorities cannot refuse the benefit of the import exemption (25/10/2018, C-528/17).

 

Services connected to exports of goods

Exemption from VAT on transport services directly linked to exports of goods (or services provided by intermediaries involved in such transport services) cannot be made subject to the production of the export declaration. The authorities must examine whether the fulfilment of the condition relating to the export of the goods concerned can be deduced from the other elements put at their disposal (08/11/2018, C-495/17).

 

Share disposal transaction, envisaged but not carried out

A share disposal transaction for which the direct and exclusive reason does not lie in the taxable economic activity of the company concerned, or which does not constitute the direct, permanent and necessary extension of that economic activity, does not come within the scope of VAT. It follows that the VAT relating to the disputed services is not deductible.

According to the Court, this is valid even if the intended sale was not completed. In that context, the important point is the fact that, had that sale been completed, the expenditure incurred in relation to the disputed services would not, in any event, have come within the scope of VAT and, therefore, could not have given rise to a right to deduct (08/11/2018, C-502/17).

 

UNITED KINGDOM

 

Making Tax Digital

Most of the VAT-registered businesses will in principle be required to use a compatible software to submit their British VAT returns as from 01/04/2019. 

In its report published on 22//11/2018, the House of Lords Economic Affairs Committee however recommended that the Government defers the date for mandating Making Tax Digital for VAT by at least one year, while encouraging businesses to join voluntarily.

HRMC already confirmed that the entry into force of this new requirement is postponed until 01/10/ 2019 for a small minority of businesses, including traders based overseas.

 

See also our lasts VAT news: 

VAT News N° 4 2016

VAT News N° 3 2016

VAT News N° 2 2016

VAT News N° 1 2016

VAT News 08

VAT News 07

VAT News 06

VAT News 05

VAT News 04

 

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