UK – Increase of the standard VAT rate  New !
As from 4 January 2011, the standard VAT rate will be increased from 17.5% to 20% (emergency budget for 2010/2011 published on1st July 2010).

AEO – Mutual recognition between the EU and Japan 
The EU and Japan signed on 24 June 2010 an agreement of mutual recognition of their AEOs programmes.

France - Reduced VAT rate – Attorney at law’s services
On request of the EU Commission, the ECJ has ruled that the application of the reduced VAT rate of 5.5% to services rendered by attorneys at law in the framework of the legal aid system is not compliant with Directive 2006/112/EC (ECJ C-492/08 Commission v France – 17 June, 2010).

Request for VAT refund - 13th EU Directive
We remind businesses established outside the EU that they have until June 30, 2010 to file their claims for getting the refund of French VAT incurred in FY 2009. The appointment of a fiscal representative is mandatory in the framework of this procedure.

Amendments to the CCIP
The CCIP are amended on several points. Notably, obligations linked with entry or exit summary declarations are simplified or detailed for specific situations (regulation EU No 430/2010 dated 20 May 2010).

Customs advisory and evaluation commission
Some adjustments are made in the method of sampling and the organisation of the commission, which is competent for disputes regarding customs valuation, origin and tariff classification (decree No 2010-428 dated 28 April 2010).

Triangular transactions - Safety Net
The VAT self-assessed by the buyer-reseller in the country that has provided the VAT number under which the intra-EU acquisition is performed is not immediately recoverable.
To avoid possible double taxation, said VAT may simply be corrected through a reduction of the taxable basis initially declared if the taxpayer demonstrates that the acquisition has been performed for the purpose of a subsequent delivery in the Member State of destination for which the recipient has been designated as liable for VAT (ECJ - C-536/08 and C-539/08 - April 22, 2010).

General tax on polluting activities (TGAP)
The deadline for payment of first instalment and filing the annual return is 30 April 2010.

Dual-use goods and technologies – Competent authorities
It's official, from 1 April 2010, applications for licenses should be addressed to the General Directorate of competitiveness, industry and services - Services for dual-use goods, and no longer to the SETICE.

Exports - Proof of VAT exemption
The evidences justifying the exemption of VAT on export of goods have been adjusted to reflect the new electronic customs clearance procedure ECS (Export Control System).
In principle, the proof of export consists of the electronic message that clears the ECS procedure when goods leave the EU (EAD clearance).
However, various alternative proofs can be produced. It is to be noted that the export declaration filled with the customs office of export (but not cleared by the ECS exit message) is no longer required (Decree of March 5, 2010).

Customs clearance and EORI number
As of April 22, 2010, the EORI number replaces SIRET number to identify the importer / exporter in the framework of the standard clearance procedure (Delta C).
The procedure is applicable since January 26, 2010 in case where the in-house clearance procedure is used (Delta D).

Real estate – VAT reform
The VAT reform applicable to real estate came into force on March 11, 2010. Transitional measures have been commented by the French tax authorities in guidelines dated March 15, 2010 (3 A-3-10).

Financial Operations - Option for taxation to VAT
The option for taxation of certain financial transactions to VAT under article 260 B of the French tax code, exercised by a taxable person established in France, does not covers transactions where the place of taxation is territorially located in another Member State . The taxation or exemption of these operations depends on said Member State.
However, these transactions qualify for input VAT deduction in France if they were taxable in France and therefore subject to VAT because of the option (Ruling No. 2010/10 of February 23, 2010).

French Intrastat – Level 1: mandatory electronic filing
As from 1st July 2010, businesses falling under the level 1 of obligation (transactions > EUR 2,300,000) will have to file their Intrastat return electronically.

Disposal of a portfolio of reinsurance contracts : operation subject to VAT
Following the ECJ decision dated 22 October, 2009 (Swiss Re Germany Holding GmbH, C-242/08), the French tax authorities have specified that the transfer of insurance or reinsurance contracts consists of the transfer of assets and liabilities when the transferee of contracts resumes, with the agreement of the insurants, the rights and the obligations attached to such contracts. The transfer of contracts realized in these conditions must be therefore qualified as transfer of a partial universality.
Consequently, the services performed on the occasion of the transfer of insurance contracts or reinsurance are eligible to the exemption of VAT laid down by article 257 bis of the French tax code (Ruling No 2010/02 dated 26 January, 2010).

Financial services : scope of the option for taxation
The option for taxation for VAT performed in accordance with Article 260 B of the French tax code by a taxable person established in France does not apply to financial transactions carried out in France by foreign its foreign establishment, unless the option is exercised specifically for this establishment.
Conversely, the option exercised by the permanent establishment in France has no effect on the VAT regime applicable to services provided by the French head office.
(Ruling No. 2010/03 of 26 January, 2010).

Implementation of the VAT Package
In recent guidelines dated 4 January 2010 (3 A-1-10), the French tax authorities comment the reform of the new place of supply rules applicable to services as from 1st January 2010.

Amendment of the VAT directive 2006/112/EC
The directive 2009/162/EU dated 22 December 2009 (OJ L 10/14 dated 15 January 2010) modifies VAT directive 2006/112/EC on several topics:
- Extension of the particular rules applicable to the import and supply of natural gas and electricity.
- Various derogatory rules, notably for Bulgaria and Romania.
- Clarification regarding the right to deduction.

The EC Commission proposes implementing measures of the VAT Package
The Commission adopted on 17 December 2009 a proposal of regulation which includes a number of measures clarifying the application of the VAT directive 2006/112/EC. This proposal notably intends to clarify the new place of supply rules for services resulting from the implementation of the VAT Package. This proposal is the outcome of in depth discussions with Member States in the VAT Committee and should give clear legal certainty for businesses and Member States once adopted (COM/2009/672).

Declaration of energy products released for consumption
On December 20, 2009, new customs forms for declaring energy products released for consumption came into force (customs guidelines # 6843 of December 23,2009)

CO2 emission allowances– Reverse charge of VAT
The EU Council agreed on a draft directive that would allow, on an optional and temporary basis, the application of the reverse charge mechanism for VAT due on CO2 emission allowances (Press release # 16838/09).

Customs commodity codes
The European Commission has published the latest version of the Combined Nomenclature applicable as from 1 January 2010 (Regulation EC No 948/2009).

VAT refund for tourists
Implementation of on automated processing (electronic visa) of VAT refunds for tourists (Customs guidelines No. 6841).

Airlines – VAT exemption
Update of the list of airlines benefiting from the VAT exemption laid down by article 262.II.4° of the French tax code (Tax guideline 3 A-6-09).

VAT Package 2010
The « VAT Package »: Businesses must prepare for the reform.
For more information...

VAT fraud – Application of the reverse charge mechanism
The European Commission proposes to temporarily extend the reverse charge mechanism to the supplies of certain goods and services susceptible to fraud : greenhouse gas emission quotas, computer chips, mobile phones, precious metals, perfumes.
(COM (2009) 511 final).

Repair services: goods or services ?
The French tax authorities have recalled the principles for qualififying a repair service i.e. depending on the value of the spare parts used, the transaction can be qualified either as a mere service or a sale of goods with an installation service (Ruling # 2009/49 of September 15, 2009).

Reduced VAT rate and audiobooks
With reference to Directive 2009/47/EC of the Council of May 5, 2009, the French tax authorities state that the supply of books recorded on a compact disc, CDrom or any other similar physical medium is subject to the reduced rate of VAT (Ruling # 2009/48 of September 15, 2009).

Date of VAT deduction
The taxpayer may exercise his right of deduction in respect of a VAT period when the tax become chargeable during this tax period and that the proof of the tax is available no later than the date of filing of the return corresponding to said period (Ruling # 2009/50 of September 15, 2009).

VAT – Exchanges of usage rights in accommodation
The services consisting for an association to organise the exchange between its members of their timeshare usage rights in accommodation are taxable at the place where the property in respect of which the member concerned holds usage rights is situated.
(ECJ C-37/78 – September 3, 2009)

Lithuania
The standard VAT rate is increased to 21% as from September 1, 2009.

Customs : creation of a rating scale
The French customs authorities have annonced the creation of a rating scale of three levels in order to allow businesses to better understand the benefits of the AEO status (level 3). The assignment of a level on the rating scale is subject to the prior filing of an application for a customs procedure or an AEO certificate.
The goal is to distinguish the businesses considered as reliable from those whose profile is considered as risky (customs guideline n° 6838 dated August 3, 2009).

CO2 emission allowances– Input VAT deduction
The French tax authorities confirm that transactions on CO2 emission allowances are exempt from VAT without any option for taxation (Ruling # 2009/41 dated July 14, 2009).

Imports - VAT Exemption
Imports followed by VAT exempt intra-EU supplies are themselves exempt from VAT under Article 143 of Directive 2006/112/EC.
As from July 2009, this exemption scheme will apply only if, at the time of importation, the importer provides to the Member State of importation its VAT identification number in this Member State, as well as that under which the intra-EU acquisition is performed.
The Member State of importation can also require evidence of the transport to be performed to the other Member State (Directive 2009/69/CE dated 25 June 2009).

CO2 emissions allowances- VAT exemption
The French tax Authorities have recently stated that transactions on CO2 emissions allowances are comparable to those performed on financial derivatives and are therefore exempt from VAT according to article 261 (C) (1) (e) of the French tax code (Official guideline 3 L-1-09 dated June 10, 2009).

EU export controls
The EC Regulation 428/2009 replaces the current Regulation EC 1334/2000 and comes into force on 27 August 2009.
Transit operations in the territory of the European Community and brokerage services (sale / purchase, negotiation on goods shipped from a third country to another third country) will be subject to an export licence if they relate to dual use goods.

Travel agents
The French tax authorities confirm that the margin scheme applies according to the nature and conditions of performance of the transactions, regardless of the status of the taxpayer i.e. whether or not a license of travel agent has been granted to the taxpayer.
(Ruling 2009/33 dated May 12, 2009)

Customs controls
The French customs authorities have recently presented the "charter of customs controls" designed in particular to better ensure the rights of operators and to inform them more about the customs procedure.

The Netherlands
Provisions have been adopted on March 25, 2009 in order to implement Directive 2008/08/EC (“2010 VAT package”). As from January 1st, 2010, the list of services will have to be submitted on a monthly basis if services rendered to foreign entrepreneurs exceed EUR 100,000.

Czech Republic
The Czech Ministry of Finance has recently announced changes regarding the VAT recovery rules. The time limit to get a VAT refund has been shortened from 30 days to 15 days when the VAT return is filed electronically.

UK - Rights to deduction
As from 1st April 2009 the partial exemption standard method is modified. Businesses are notably entitled to use a provisional recovery percentage based on the previous year. An annual adjustment will have then to be performed.

Assessment of the rights to deduction
According to the French tax authorities the reform of the input VAT deduction rules (coefficients method) does not entail a modification of the company’s ERP systems (ruling dated March 23, 2009).

Belgium - Monthly VAT refund procedure
The monthly VAT refund procedure, reserved so far for operators carrying out cross-border transactions on goods (exports, intra-EU deliveries) has been recently extended to a larger number of businesses, including foreign companies identified for VAT in Belgium without being established in this country.

Reverse charge – Penalty of 5%
The French tax authorities have recently indicated that the 5% penalty, which is normally due when the taxpayer fails to reverse charge VAT, will be not applied in case where a corrective return is spontaneously filed before any action by the tax authorities (ruling dated 02/17/09).

Monthly refund of VAT credits
As from January 1st, 2009, companies using the domestic refund procedure are allowed to claim the refund of a VAT credit on a monthly basis (instead of a quarterly basis) providing that the amount of the VAT credit exceeds Eur 760.

Electronic billing
The European Commission adopted on 28 January 2009 a proposal to amend the VAT Directive, as regards the rules for billing. The objective of the proposal is to increase the use of electronic invoicing.

Intrastat
Publication by the French authorities of new Customs guidelines on the Intrastat (BOD 6793 of 23/01/2009).

VAT – Taxable basis
Property taxes owed by the owner are an increase in the selling price of the property if it is invoiced to the purchaser (tax ruling of 20/01/2009).

Germany
The tax authorities have issued on January 09 official guidelines on the VAT treatment of intra-EU supplies of goods, which notably detail the proofs required from the supplier.

Latvia – VAT rates
The standard VAT rate is increased from 18% to 21%. The reduced VAT rate of 5% is increased to 10% (applicable on January 1, 2009).

USA - New security requirements for carriers and importers in the USA of ocean freight
As from 26 January 2009, carriers and importers in the USA of ocean freight will have to provide U.S. Customs with additional data for security purposes.

UK – standard VAT rate
From 1 December 2008, the general law VAT rate is reduced from 17.5% to 15%. This reduction is adopted temporarily for a period of 13 months

VAT deduction - Holding
The advisor and assistance fees paid by a holding company in the context of an acquisition of an interest in another company carried out by one of its subsidiaries cannot be included in general costs as the transaction was not carried out directly for the benefit of the holding company in the scope of it own operation but for a separate company, its subsidiary.
Supreme Court (France), 6 October 2008, no°299265, AXA

Concept of taxable recipient – ECJ, 6 November 2008
A partial taxpayer must be considered to be a taxable person where he purchases intangible services from a service provider who is established in another Member State. This conclusion is applicable even if the services are acquired by the partial taxpayer for the needs of his activities that are outside the scope of VAT.
Case C-291/07, kollektivavtalsstiftelsen TRR Trygghetsradet