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OVERSEAS ISSUES |
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Transactions within the EU - UK traders incurring EU VAT See VM ¶9498 A new electronic VAT refund system for traders incurring VAT in other EU countries is to be introduced to replace the current paper-based system with effect from 1 January 2010. From that date claims will be submitted electronically on a standardised form. The main changes to the claims system are: » the time limit for making claims will be extended by three months to nine months from the end of the calendar year in which the VAT was incurred; » tax authorities will only have four rather than six months to make repayments; » member states will pay interest where they fail to meet the deadline for repayment. Businesses will have the right of appeal against non-payment. Transactions within the EU - EU sales lists for services See VM ¶9410 As previously announced, a package of EU measures to simplify and modernise the VAT system for cross border trading is to come into force on 1 January 2010. As part of this the EU sales list regime is to be extended to the supply of services where the reverse charge applies (¶9835). HMRC have announced that secondary legislation will be introduced to require affected businesses to submit calendar quarterly sales lists from 1 January 2010. Transactions within the EU - changes to the place of supply of services See VM ¶9450 As part of an EU-wide initiative which is intended to ensure that, where possible, VAT is due in the country where services are consumed, i.e. where the customer is established, the place of supply of services rules are changing for cross border services. From 1 January 2010, the new basic rule for supplies of services to overseas businesses will be that VAT is due in the place where the customer is established. The result for UK businesses will be that they, rather than the supplier, will be liable to account for UK VAT on most services provided by overseas suppliers under the reverse charge provisions. For supplies to non- business customers the place of supply remains unchanged, i.e. where the supplier is established. There will continue to be exceptions to the new general rule for: » cultural, artistic, sporting, educational and entertainment services (¶44); » valuation and work on goods (¶646); » hire of means of transport (¶626); » ancillary transport services (¶623); » restaurant and catering services (¶614); » intermediary services (¶7130); and » transport of goods (¶616).
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