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EU Prepares Businesses For VAT Place Of Supply Changes

by Ulrika Lomas, Tax-News.com, Brussels

31 October 2013


The European Commission on October 29, 2013, published practical guidelines to prepare businesses for the new VAT place of supply rules that are to enter into force in 2015.

At its meeting in Luxembourg on June 21, 2013, the Economic and Financial Affairs Council of the European Union approved a draft regulation to amend VAT rules regarding the place of supply of telecommunications, broadcasting and electronic services, real estate services and the distribution of tickets for entry to cultural, artistic, sporting, scientific, educational, entertainment and similar events from January 1, 2015.

Implementing Regulation (EU) No 282/2011 stipulates that telecommunications, broadcasting and electronic services should, in general, be taxed at the place where the customer is established or resides. Where the supplier is established within the EU and the customer is a non-taxable person, the supply is, however, currently taxed at the place where the supplier is established. From January 1, 2015, all telecommunications, broadcasting and electronic services will be taxable at the place where the customer belongs (unless the rule on effective use and enjoyment applies,) even if the customer is a non-taxable person.

A One Stop Shop will enable telecoms, broadcasting and e-services businesses to comply with all of their VAT obligations in all member states from their country of registration. This is consistent with the Commission's goal of reducing tax obstacles and administrative burdens for cross-border companies in the Single Market.

The newly-released guidelines focus on the information that will be requested to register and account for VAT, the formats in which it will be requested, the submission deadlines, and all practical details on payment. With this information, businesses will be able to properly prepare their processes and configure their IT tools to collect the information that they will have to submit from February 2015. The Commission has said additional guidelines will be published during 2014.

TAGS: compliance | VAT tax authority guidance | VAT registration / deregistration | tax | business | European Commission | value added tax (VAT) | VAT legislation | VAT cross-border transactions | Luxembourg | tax authority | education | legislation | regulation | telecoms | services | VAT compliance matters | Europe

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