PURPOSE: to
amend the rules on the place of supply of services.
LEGISLATIVE
ACT : Council Directive 2008/8/EC amending Directive 2006/112/EC as regards
the place of supply of services
CONTENT: the
Council adopted a package of measures on value-added tax (VAT), which
includes a change in the rules on the place of supply of services in order to
ensure that most types of services are taxed in the Member State of consumption.
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
also provides for improved mechanisms for cooperation between member states
in order to prevent tax avoidance under the new system. (Please refer to CNS/2004/0261,
CNS/2005/0807
and CNS/2004/0262)
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 1 January 2015. The Member State of establishment
will, until 1 January 2019, retain a proportion of VAT receipts
collected through the one stop shop scheme. This proportion will amount
to 30% from 1 January 2015 until 31 December 2016, 15% from 1 January
2017 until 31 December 2018 and 0% from 1 January 2019 onwards.
Report: the Commission shall, by 31 December 2014, submit a report on
the feasibility of applying efficiently the rule laid down in Article 5 for
the supply of telecommunications services, radio and television broadcasting
services and electronically supplied services to non-taxable persons and on
the question whether that rule still corresponds to the general policy at
that time concerning the place of supply of services.
ENTRY INTO FORCE:
20/02/2008.