VATupdate

VATupdate Newsletter Week 16 2021

Hello and welcome back. We finally had some European Court of Justice cases this week, but there was (much) more.

In the SK Telecom case, the ECJ decided that ‘roaming services’ are subject to VAT in the country where these services are used and enjoyed. This means that non-resident consumers must pay local VAT on their telephone bill, when they visit another country. The question that is not answered is if and how SK Telecom could receive a refund of the VAT paid to the telecom service provider in Austria. And if they should charge Austrian VAT and get a local VAT registration, or if they could use the MOSS scheme. Any thoughts on this? Please let us know.

In the JK case, the ECJ makes a distinction between food that is prepared and consumed ‘at the spot’, and food that is prepared for take-away. The food is prepared in the same kitchen, by the same people and delivered in the same way. Still, the ECJ makes a distinction between a ‘restaurant service’, subject to the standard VAT rate, and ‘sale of foodstuffs’, subject to the reduced VAT rate. In itself that is not that strange, but it reminds us of an earlier news item in Japan, where consumers were avoiding sales/service tax by ordering food as take-away, and then still consume the food on the sport, in front of the restaurant. Especially with the current Covid-19 measures in many countries, the latter is done quite often: we see people enjoying a coffee in front of the ‘pick-up point’ every day. What do you think, is that a restaurant service or supply of foodstuff?

The Gulf States intended to implement a VAT system as of 1 January 2018. Saudi Arabia and the UAE did this, and one year later, Bahrain followed. As of 16 April 2021, Oman also implemented a VAT. Kuwait and Qatar are next, but it’s unclear who will do so first. Kuwait is expected to do so in 2022, and Qatar may already be ready later this year. Keep an eye on our website, as we will bring you the latest updates always as you first source of VAT news.

Before you go to the actual news below, we would like to draw you attention to a webinar that was organized on 9 April 2021. In this webinar, VATupdate.com was mentioned as the number 1 resource for VAT information ad news. Well, ok, it was mentioned as the first source. At the top of the list. Well, you knew that already of course… But thank you Pedro, for mentioning us. The link to the post is mentioned below, but here is the linked to the YouTube recording: https://www.youtube.com/watch?v=NvHZlKpHEnY&t=458s

Stay safe, and have a nice week.

The VATupdate Team


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