Category Archives: News & alerts

Germany implements Lebara decision on prepaid telecom cards

On 24 September 2012 the German Ministry of Finance issued a decree  (only available in German language) implementing the principles of the ECJ decision in the “Lebara” case. You can read more of this case here, here and here.

Each sale of single purpose prepaid cards is regarded as a telecommunication service if these cards are sold in the supplier’s own name. Otherwise, if the sale is made in the name of a third person, an intermediary service is on hand. Whether there is a telecommunication service or an intermediary service should be considered on each distribution level.

A single purpose prepaid card in the sense of the decree requires that it can exclusively be used for telephone calls by means of the provided infrastructure, and that it contains all information necessary to make calls.

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Finland: Proposed increase of VAT rates as of 1 January 2013

The Finnish government has recently proposed to have both the reduced and the standard VAT rates increased by 1%. According to the proposal the standard rate would increase from 23% to 24% and the lower rates of 9% and 13% to 10% and 14% respectively.

The proposal is yet to be adopted by the Finnish Parliament. This will probably take place in December 2012 to have the rate hikes incorporated before the expected effective date of 1 January 2013.

What does this mean for you?

If you are registered for VAT in Finland or are a non-EU company supplying B2C e-services to Finnish residents under the one-stop-shop scheme, you will need to be ready to update your ERP system and VAT codes.

EU: VAT reporting rules for telecommunications, broadcasting and eservices mini one stop shop scheme

The Implementing Regulation No 815/2012 defining the VAT reporting rules for the mini one stop shop scheme (“MOSS”) for B2C telecommunication, broadcasting and eservices in the EU has been made officially available.
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Hungary: Tax on telecoms services

In Hungary, under the Act on Telecommunications Tax, telecom companies are subject to a new tax calculated on the basis of phone calls initiated and messages (SMS, MMS) sent by their subscribers. The new act took effect on 1 July 2012. The tax is payable by the service providers and the tax base is calculated on the basis of the total time of calls initiated and the number of messages sent from the call number of the subscriber, or, in the absence of a subscription, the call number registered at the service provider. The tax rates are HUF 2 per minute started for initiated phone calls and HUF 2 per message sent.
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EU: Advocate General supportive of taxpayer in the Lebara ECJ case

The Advocate General has given his opinion in the UK case of Lebara Ltd (C-520/10) at European Court of Justice (ECJ) concerning the supply of phone cards to distributors in other EU-States, which end users belonging in that same EU-State can redeem in return for receiving telecoms services (previously reported here). In summary, the Advocate General has suggested that the distributor, and not the card issuer (in this case Lebara) should be liable for the VAT due on the supply of telecoms services to end users. The reasons for this are that the distributor is either acting as an undisclosed agent of the card issuer or, in the alternative, because the card issuer makes a single supply of telecoms services to the distributor and the distributor in turn makes a supply to the end user.
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EU: Internet sellers are jointly liable for import duties

The European Court of Justice (ECJ) has recently passed a decision in a Case C‑454/10 Oliver Jestel regarding the question of who is liable for the payment of customs duties when goods are imported into the EU. The case involved an Online shop within the EU, where the shop owner was acting as an intermediary between the fraudulent seller and the customers. ECJ has essentially deemed that the shop owner is co-liable for the payment of the costumes duties and import VAT, which should have been paid (but were not) be the foreign seller, as the shop owner should have been aware that the seller is selling goods illegally imported into the EU.
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France: Proposed increase of the reduced VAT rate to 7%

The French Prime Minister announced recently that from 1 January 2012 the reduced VAT rate for “standard reduced articles” is expected to be increased from 5.5% to 7% (subject to Parliamentary approval). This change will affect among others also the sales of all e-books in France; as we have reported previously France intends to sell the e-books at reduce rate as of 1 January 2012.
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EU: ECJ hears phone cards case Lebara (C-520/10)

In its submission to the hearing, the European Commission adopted the approach favored by Lebara Ltd, suggesting that in such circumstances the supply by the TelCo (i.e. the card issuer) is liable to reverse charge VAT in the distributor’s country, and that the onward supply by the distributor to the end user is subject to local VAT in the Member State where the distributor is established. Find out more

France: VAT reduced on e-books as of 1 January 2012

As of 1 January 2012 e-books sold in France will be cheaper due to a lower VAT rate. They will be taxed with 5.5% instead of 19.6%. This will make the France the cheapest country to sell e-books in the whole EU. It might be interesting for e-publishing companies to consider to relocate their e-book stores to France to benefit from the low VAT rate for their EU wide e-book sales.

According to new article 278 bis 6° of the French Tax Code (implementation of article 98.2 of the VAT Directive EC/112/2006), the French VAT reduced rate at 5.5% is applicable to books, whatever their physical support and including books provided by electronic means. This new provision will be applicable in France to all transaction for which the tax point occurs as from 1 January 2012.
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