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At
the same time, the package introduces the possibility for
taxpayers who perform certain services to fulfil their EU-wide
VAT reporting obligations in one single member state
(using a "mini one-stop shop") and thus reduce
their compliance costs.
The
package, which includes two draft directives and a draft
regulation, also provides for improved mechanisms for
cooperation between member states, in order to prevent
unauthorised tax avoidance under the new system.
Adoption
of the package by the Council follows political agreement
reached during the Portuguese EU presidency, at a meeting
on December 4th, 2007.
The
VAT package will, as a general rule, enter into force on
January 1st, 2010. The main features of the new rules are
as follows:
-
For
business-to-business services, taxation will be at the
place where the customer is situated, and no longer at
the place where the service provider is established,
as is currently the case;
-
For
business-to-consumer services: for most services, the
place of taxation will continue to be that where the
supplier is established, as at present;
-
However,
in certain circumstances, taxation of
business-to-consumer services will be at the place of
consumption in order to prevent distortions of
competition between member states operating different
VAT rates. This category includes: restaurant
services; the hiring of means of transport; cultural,
sporting, scientific and educational services; and
telecommunications, broadcasting and electronic
services;
-
A
"one-stop shop" system will be introduced
for telecoms, broadcasting and electronic services in
order to simplify arrangements made necessary by the
new rules. The "one-stop shop" will enable
service providers to fulfil in their home member state
a single set of obligations for VAT registrations,
declarations and payments, covering services provided
in member states where they are not established. VAT
revenue will then be transferred from the country
where the supplier is located to that where the
customer is situated, whose VAT rates and controls
will be applicable;
-
For
business-to-consumer supplies of telecoms,
broadcasting and electronic services, application of
the new rules and the one-stop shop scheme will be
deferred to January 1st, 2015. The member state of
establishment will, until January 1st, 2019, retain a
proportion of VAT receipts collected through the
one-stop shop scheme. This proportion will amount to
30% from January 1st, 2015 until December 31st, 2016,
15% from January 1st, 2017 until December 31st, 2018
and 0% from January 1st, 2019 onwards.
The
VAT package contains:
-
A
draft directive on the place of supply of services;
-
A
draft directive on procedures for VAT refunds to
non-established businesses;
-
A
draft regulation on improved administrative
cooperation as regards VAT and the exchange of
information between member states.
Source
: Tax-news.com (subscription) - Tortola,British Virgin
Islands, dated 18/02/2008
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