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CFE Amsterdam Conference
CFE Amsterdam Conference
CFE Amsterdam Conference
CFE Amsterdam Conference
CFE Amsterdam Conference
CFE Amsterdam Conference
CFE Amsterdam Conference
CFE Amsterdam Conference
CFE Amsterdam Conference
CFE Amsterdam Conference
CFE Amsterdam Conference
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CFE Amsterdam Conference

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  • 1. Co-brand Logo ‘Extra-Community’ supplies of services Optional use and enjoyment rules revealing situations of double and non-taxationKenneth Vyncke – 24 June 2011 – Amsterdam
  • 2. Place of supply rulesPower of taxation2 Kenneth Vyncke - 24 June 2011 - Amsterdam © 2011 Deloitte Academy
  • 3. Place of supply rulesPower of taxation In principle place where actual consumption takes place • VAT is consumption tax Challenge for services • Services are intangible by nature and difficult to trace Circumvent this challenge • Simplified POSS rules • E.g. European Union ‒B2B and B2C default POSS rules ‒Limited set of particular POSS rules (e.g. immovable property services, restaurant and catering services) ‒Prevents potential conflicts between Member States, but not potential conflicts where third countries are involved3 Kenneth Vyncke - 24 June 2011 - Amsterdam © 2011 Deloitte Academy
  • 4. Place of supply rulesPlace of consumption4 Kenneth Vyncke - 24 June 2011 - Amsterdam © 2011 Deloitte Academy
  • 5. Place of supply rulesAvoiding double and non-taxation from an EU perspective Optional use and enjoyment rules • Art. 59a VAT Directive • Override certain POSS rules for cross border services where third countries are involved • Shift place of supply of services to place where services are effectively used and enjoyed • For many services (art. 44, 45, 56 and 59), but not all Mandatory use and enjoyment rule • Art. 59b VAT Directive (until 2015, after that date optional) • Telecom and broadcasting services (B2C, from non-EU to EU) Mandatory use and enjoyment criteria • E.g. immovable property and passenger transport services5 Kenneth Vyncke - 24 June 2011 - Amsterdam © 2011 Deloitte Academy
  • 6. Long-term rental of vehiclesExample of non-taxation B2B: Spanish company invoices US company for vehicle used on Spanish territory Default B2B rule: place of supply = US Use & enjoyment: place of supply = ES B2C: US company invoices Portuguese resident for vehicle used on Portuguese territory Default B2C rule: place of supply = US (until 2013) Use & enjoyment: place of supply = PT6 Kenneth Vyncke - 24 June 2011 - Amsterdam © 2011 Deloitte Academy
  • 7. Rental of movable goodsExample of double taxation B2B: CH company invoices UK company for laptop used on Swiss territory Default B2B rule: place of supply = UK Use & enjoyment: place of supply = CH B2C: UK company invoices IE resident for laptop used on Swiss territory Default B2C rule: place of supply = UK Use & enjoyment: place of supply = CH7 Kenneth Vyncke - 24 June 2011 - Amsterdam © 2011 Deloitte Academy
  • 8. Most implemented optional use and enjoyment rulesEffective use and enjoyment criteria (89th meeting VAT Committee) Hiring of means of transport • Place where means of transport is used (distances covered) Advertising services (Athesia Druck, C-1/08) • Place where advertising material is disseminated • E.g. advertising campaign in daily press • E.g. product promotion at local events Services of consultants, lawyers, etc. • E.g. services used for contractual relationship within Member State • E.g. preparation and submission of local tax returns8 Kenneth Vyncke - 24 June 2011 - Amsterdam © 2011 Deloitte Academy
  • 9. Most implemented optional use and enjoyment rules (2)Effective use and enjoyment criteria (89th meeting VAT Committee) Telecom, broadcasting and electronic services • Place where customer is able to use service • T – fixed line: where telephone of receiver can be found • T – mobile phone: [presumed to be] where SIM card is issued • B: where the apparatus of receiver can be found • E: [presumed to be] where customer has IP address Transport services • Place where transport takes place (distances covered) Work on movable property • E.g. goods are fixed and remain within Member State9 Kenneth Vyncke - 24 June 2011 - Amsterdam © 2011 Deloitte Academy
  • 10. Place of supply rulesOptional use and enjoyment rules Observations • Several situations of double and non taxation • Patchwork of particular and changing national rules • Focus on services located outside EU • Conflicting views on effective use and enjoyment criteria • Source of competition between Member States • Harmonisation at EU level and even guidelines at global level are desirable10 Kenneth Vyncke - 24 June 2011 - Amsterdam © 2011 Deloitte Academy
  • 11. © 2011 Deloitte Academy

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