Guidelines issued by the VAT Committee on March 12, 2020
- VAT RELATED ISSUES IN VIEW OF THE WITHDRAWAL OF THE UNITED KINGDOM FROM THE EUROPEAN UNION WITHOUT AN AGREEMENT (SEE BELOW)
From the 113rd meeting:
VAT rules applicable to transactions related to the recharging of electric vehicles
As regards the transaction carried out by an infrastructure operator (‘CPO’) who provides a suite of goods and services, such as remote reservation, provision of information on whether terminals are available, their location, the type of sockets and parking space available and, lastly, actual recharging of the battery of electric vehicles, the VAT Committee unanimously agrees that recharging of the battery must be regarded as the main element of the transaction, since the sole purpose of the additional services supplied is to facilitate the access for such vehicles to the charging point so that their battery can be recharged and are therefore ancillary to the recharging. Thus, the VAT Committee unanimously agrees that the transaction carried out by the CPO shall be considered to be a supply of goods in accordance with Articles 14(1) and 15(1) of the VAT Directive.
Implementation of the Quick Fixes Package: Council Directive (EU) 2018/1910 and Council Implementing Regulation (EU) 2018/1912
Call-off stock: How to handle small losses
The VAT Committee almost unanimously agrees that small losses of goods under call-off stock arrangements (Article 17a of the VAT Directive) arising from the actual nature of the goods, from unforeseeable circumstances or from an authorisation or instruction by the competent authorities,
shall not give rise to a transfer of these goods within the meaning of Article 17 of the VAT Directive. Furthermore, the VAT Committee, at large majority, agrees that for the purposes of such call-off stock arrangements, “small losses” shall be taken to mean losses that amount to below 5% in terms of value or quantity of the total stock as it stands on the date, after arrival at the place of storage, that the goods are actually removed or destroyed or, if it is impossible to determine that date, the date on which the goods are found to have been destroyed or missing.
Call-off stock: Whether to consider a call-off stock warehouse to be a fixed establishment of the supplier
- The VAT Committee unanimously confirms that the call-off stock arrangements simplification provided for under Article 17a of the VAT Directive shall apply regardless of whether or not the taxable person who transfers the goods (hereinafter, “the supplier”) is identified for VAT purposes in the Member State to which the goods were transported under these arrangements.
- However, where the supplier has established his business or has a fixed establishment in the Member State of arrival of the goods, the VAT Committee unanimously confirms that the simplification for call-off stock arrangements provided for under Article 17a of the VAT Directive shall not apply.
The VAT Committee unanimously agrees that this shall be so irrespective of whether or not the fixed establishment of the supplier actually intervenes (in the sense of Article 192a of the VAT Directive) in the supply of goods carried out by the supplier. - The VAT Committee unanimously agrees that where the warehouse to which the goods are transported under call-off stock arrangements is owned and run by a person or persons other than the supplier this warehouse shall not be seen as a fixed establishment of the supplier.
- The VAT Committee, at large majority, agrees that where the warehouse, to which goods are transported from another Member State with a view to those goods being supplied at a later stage to an identified customer, is owned (or rented) and directly run by the supplier with his own means present in the Member State where the warehouse is located, this warehouse shall be seen as his fixed establishment.
However, where such warehouse is not run by the supplier with his own means, or where those means are not actually present in the Member State in which the warehouse is located, the VAT Committee, at large majority, agrees that notwithstanding that the warehouse is owned (or rented) by the supplier, it may not be considered his fixed establishment.
Chain transactions: Combined with applying the simplification in Article 141 (triangular transactions)
- Where the same goods are supplied successively and those goods are dispatched or transported from one Member State to another Member State directly from the first supplier to the last customer in the chain, the VAT Committee unanimously agrees that in the chain of transactions, only the taxable person making the intra-Community acquisition (hereinafter, “X”) may, subject to meeting all conditions, benefit from the simplification for triangular transactions laid down in Article 141 of the VAT Directive.
- The VAT Committee almost unanimously agrees that, in the situation such as described under point 1, the condition laid down in Article 141(c) of the VAT Directive shall be seen as fulfilled when the goods are directly dispatched or transported, from a Member State other than that which has issued the VAT identification number used by X for the purposes of the intra-Community acquisition, to the place designated by the person for whom X carries out
the subsequent supply (hereinafter, “Y”). - The VAT Committee almost unanimously agrees that the fact that Y makes a subsequent supply of the goods to another person within the chain, shall have no impact on the application of the simplification for triangular transactions to the transactions made by X. For that simplification to apply, all the conditions in Article 141 of the VAT Directive must however be fulfilled, which according to the view held almost unanimously by the VAT Committee, shall require that Y is identified for VAT purposes in the Member State where the VAT on that subsequent supply is due and designated, in accordance with Article 197 of the VAT Directive, as liable for the payment of the VAT due on that supply.
Exemption of an intra-Community supply of goods: Interaction with the VAT Refund Directive
The VAT Committee unanimously confirms that the amendment made by Council Directive (EU) 2018/1910 of 4 December 2018 to Article 138(1) of the VAT Directive adds a substantive condition for the application of the exemption of an intra-Community supply of goods. The VAT Committee unanimously agrees that this addition means that where the person acquiring the goods does not indicate his VAT identification number to the supplier or where the VAT identification number indicated has been issued by the Member State from which the goods are dispatched or transported,
the conditions for applying the exemption of Article 138 must be seen as not being fulfilled and the supplier shall have no other option but to charge VAT.
Exemption of an intra-Community supply of goods: Application of Article 138(1a)
- The VAT Committee unanimously acknowledges that the fact that the exemption provided for in paragraph 1 of Article 138 of the VAT Directive shall not apply in cases of noncompliance by the supplier as set out in paragraph 1a can de facto only be established a certain period after the moment the supply was made and invoiced.
Indeed, the VAT Committee unanimously agrees that it is inevitable that there will be a time span between the moment the supply is made and invoiced to the acquirer and the moment when the supplier has to comply with the obligation provided for in Articles 262 and 263 of the VAT Directive to submit a recapitulative statement. The VAT Committee also agrees unanimously that a time span cannot be avoided between the moment when the supplier had
to submit the recapitulative statement and the moment where the tax authorities take action as such action can only be triggered by the recapitulative statement not having been submitted or by the submitted recapitulative statement being found not to contain the correct information. - The VAT Committee unanimously agrees that the supplier shall therefore be able to exempt the supply, at the time the supply is made, subject to the conditions of Article 138(1) of the VAT Directive being met since these are the only conditions relevant at the time of the supply to determine whether or not the exemption applies.
As to the cases envisaged by Article 138(1a) of the VAT Directive, the VAT Committee almost unanimously agrees that the exemption may only be revoked retroactively, if and when the tax authorities establish non-compliance of the supplier with the obligation provided
for in Articles 262 and 263 of the VAT Directive to submit a recapitulative statement or where the recapitulative statement already submitted by him does not set out the correct information concerning the supply in question as required under Article 264 of the VAT Directive, unless that supplier can duly justify his shortcoming to the satisfaction of the competent authorities.
Exemption of an intra-Community supply of goods: Combined with the optional reverse charge provided for in Article 194
When a transfer of goods according to Article 17 of the VAT Directive is deemed to take place, because goods placed under call-off stock arrangements cease to fulfil the conditions to remain under such arrangements, the VAT Committee unanimously agrees that:
a) where the taxable person making the transfer is not already identified for VAT purposes in the Member State in which the goods were first placed under the call-off stock arrangements, he needs to identify himself in that Member State because of the deemed intra-Community acquisition made by him there;
b) such identification shall be necessary, in accordance with Article 214(1)(b) of the VAT Directive and may not be dispensed with by the Member State in question, even if the deemed intra-Community acquisition is exempt in accordance with Article 140(c) of the VAT Directive.
Exemption of an intra-Community supply of goods: Meaning of the term ‘independent’ in regard to proof of transport
The VAT Committee almost unanimously agrees that when establishing whether for the purposes of points (a) and (b)(ii) of Article 45a(1) of the VAT Implementing Regulation two parties are ‘independent’,
a) the two parties shall not be regarded as ‘independent’ where they share the same legal personality; and
b) the criteria set out in Article 80 of the VAT Directive shall be used, so that parties in respect of which ‘family or other close personal ties, management, ownership, membership, financial or legal ties’ exist may not be regarded as independent of each other.
QUESTIONS CONCERNING THE APPLICATION OF EU VAT PROVISIONS IN CASE OF WITHDRAWAL OF THE UNITED KINGDOM FROM THE EUROPEAN UNION WITHOUT AN AGREEMENT
On-going movements of goods from the United Kingdom to the EU27 Member States at the moment of its withdrawal
An intra-Community acquisition of goods is regarded as being made when the corresponding supply is effected. Such a supply may be effected at the time when dispatch or transport of the goods begins or during dispatch or transport. Given the principles of neutrality of VAT, legal certainty and the requirement to ensure a rational taxation that avoids double taxation, the VAT Committee therefore almost unanimously agrees that any intra-Community acquisition of goods of which the dispatch or transport from the United Kingdom to the EU-27 Member States started before its withdrawal from the EU shall be disregarded if the importation of these goods, as provided for in Article 30 of the VAT Directive, in a Member State of the EU-27 has taken place as from the withdrawal date.
Reimportation of goods after the withdrawal of the United Kingdom
The VAT Committee almost unanimously agrees that the notion of “reimportation”, as referred to in Article 143(1)(e) of the VAT Directive, shall also cover situations of importation where goods have not been exported but were transported or dispatched from one of the EU-27 Member States to the United Kingdom before the withdrawal date and are returned from the United Kingdom as from the withdrawal date.
As there was no export declaration, the VAT Committee almost unanimously agrees that the person who exported the goods shall use alternative means to prove that the goods are reimported in unaltered state within the time limit referred to in Article 203(1) of Regulation (EU) No 952/2013 laying down the Union Customs Code3.
Personal property imported after the withdrawal of the United Kingdom
The VAT Committee almost unanimously agrees that, where natural persons move their normal place of residence from the United Kingdom to an EU-27 Member State within 6 months as from the withdrawal date, the exemption laid down in Article 4 of Directive 2009/132/EC shall apply to
personal property imported by these persons in the EU-27 as from the withdrawal date, insofar as the goods concerned have been in the possession of and, in the case of non-consumable goods, used by the person concerned at his or her former normal place of residence in the United Kingdom for a minimum of six months (except in special cases justified by circumstances) before the date on which he or she ceased to have his or her normal place of residence outside the EU-27.
The VAT Committee almost unanimously agrees, however, that the exemption of personal property shall be made conditional upon such property having borne the customs and/or fiscal charges to which it was normally liable in the United Kingdom or in one of the EU-27 Member
States before the importation in the EU, in accordance with Article 4, paragraph 2, of Directive 2009/132/EC.
Refund of VAT charged before the withdrawal date in the United Kingdom or in an EU-27 Member State to taxable persons not established in the State of refund but established respectively either in an EU-27 Member State or in the United Kingdom
Regarding VAT charged before the withdrawal date in the United Kingdom or in an EU-27 Member State to taxable persons not established in the State of refund but established respectively either in an EU-27 Member State or in the United Kingdom, the VAT Committee almost unanimously confirms the following: (..)
Although, as from the withdrawal date, Directive 2008/9/EC ceases to apply for the United Kingdom, the VAT Committee almost unanimously acknowledges that in regard to VAT charged to a taxable person before the withdrawal date the rights and corresponding obligations of taxable persons derived from that Directive shall continue to apply, encompassing notably the right to a refund of VAT, the time limits to submit a refund application, the information to be provided, the time limits to be notified or to be requested to provide additional information, the time limits to provide the requested additional or further additional information, the time limits to be refunded and the right to receive interest in case of late payment. Further, the VAT Committee almost unanimously agrees that refund applications relating to VAT charged from 1 January 2019 until and including the day before the withdrawal date shall be treated as relating to the remainder of a calendar year.
Source: europa.eu
