First and the most important fact: These rules are mandatory for any kind of ebusiness, no matter where it is established or has a nexus: in EU, US, China, India, Australia, Switzerland. As soon as a company provides eservices to a non VAT registered EU customer (regardless whether the customer is a legal or a natural person) it is bound by these rules, regardless whether it has a “physical” presence, server or agent in the EU. The customer’s location is the only thing that matters.
As reported end of last year, EU Commission has on 18 December 2012 published a new proposal for amending the VAT Implementing Directive 282/2011, which provides additional rules and clarifications regarding the place of supply rules – i.e. defines in which country VAT should be levied.
For the purposes of this post I will limit myself only to those relevant for us telecom, broadcasting and e-services, even though the proposal deals also with some other issues (e.g. work on immovable property).
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Do you sell services to consumers? Are they electronically supplied, telecom or broadcasting services? Are your customers in the EU? Are you investing into the ebusiness, telecom or broadcasting sectors? Are you ready for the B2C EU VAT changes?
In 2015 the EU VAT place of supply rules are changing. B2C telecoms, broadcasting and electronically supplied services will be taxed where your customer is located or belongs. As a result, different VAT rates may apply compared to your current situation impacting your pricing or profit margin.
Some time ago, we have announced that Finland and Czech Republic are planning to increase their VAT rates on 1 January 2013. This has indeed come to fruition as reported; both countries have increased all their VAT rates by 1% as of today morning.
P.S. and without being cynical in any way: We wish you all a happy and most successful 2013!
On 18 December 2012, the Commission adopted the proposal for a Council Regulation amending the VAT Implementing Regulation (EU) No 282/2011 as regards the place of supply of services. It is the final proposal in a package of measures in view of the implementation of the new VAT taxation rules for B2C telecommunications, broadcasting and electronic services that will become effective as of 1st January 2015.
The proposed implementing measures relate to the identification and evidence of customer location and are needed to ensure a uniform application within the EU. It also includes a proposed deemed provision in case of intermediated delivery of electronic services.
Cyprus is again increasing its VAT rates.
The standard VAT rate will increase from 17% to 18% for the period 14 January 2013 to 12 January 2014. From 13 January 2014 the standard VAT rate will increase again to 19%, at which point the 8% reduced rate also rises to 9%. The current reduced rates of 5% and 0% remain unchanged.
Original news can be found here.
A number of important VAT changes are (probably) due to take place in Czech Republic on 1 January 2013, including a 1% increase in VAT rates to 15% and 21% respectively. The changes have still to be approved by the respective legislative bodies.
Find out more
The Serbian tax administration has recently issued a new “rulebook” on electronically supplied services. It defines the scope and types of services that should be regarded as electronically supplied services for Serbian VAT purposes. These include for example the supply of software and related updates, supply and maintenance of websites, service in the field of distance learning etc
Even though the “rulebook” finally provides a definition of eservices, certain types of listed services could cause uncertainties in practice and might require further clarifications, e.g. the supply of pictures, text and information in electronic format; the supply of audio and video records etc.
Check here for some more details and contact information.
What does this mean for you?
It is a welcome movement that the Serbian legislation addresses the VAT implications of current issues, such as eservices. It would appear however, that the rules and definitions may differ from those in the EU. It is therefore highly recommended to analyze the nature of your business’s supplies in detail to see if they fall within the definitions of the “rulebook”.
The French government announced tax rate changes as part of a planned tax relief for companies last week. The proposal intends to make the French companies more competitive on the international market, however in return the VAT rates will be increased.
According to the announcement the standard VAT rate would increase from the current 19.6% to 20%, while the reduced VAT rate would increase from 7% to 10%. Some good news, that the super-reduced VAT rate is proposed to decrease from 5.5% to 5%.
As per the information published the VAT rate changes will be effective from 1 January 2014.
What does this mean for you?
Any change in the VAT rates in France will affect businesses both as suppliers and as customers. Businesses VAT registered in France, doing or planning doing business in France should therefore keep abreast with the developments.
Ordering goods per internet that are sent directly to your home has become increasingly popular these days. It’s easier, more convenient and you can do it while riding a bus or waiting for your dentist appointment. While you could already buy clothes from catalogues decades ago, you can even do your groceries shopping via your smart phone today. But what are the tax obstacles in this area for companies offering those services within the EU?