News
VAT - Customs - International trade

Jet fuel imports - Removal of customs duties  New !

The Council has adopted a regulation removing duties on jet fuel imports as from 1 January 2014 (Council press release 17538/13 of 9 December 2013).

Educational services - VAT exemption - Right to deduction  New !

Point (i) of Article 132(1)(i), points (a) to (d) of 133(1) and Article 134 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax must be interpreted as meaning that they do not preclude educational services provided for commercial purposes by bodies not governed by public law from being exempt from value added tax. However, point (i) of Article 132(1) of that directive precludes a general exemption of all supplies of educational services, without consideration of the objects pursued by non-public organisations providing those services.

A taxable person may not claim, in accordance with Article 168 of Directive 2006/112 or the national provision transposing it, a right to deduct input value added tax where, as a result of an exemption provided for by national law in infringement of point (i) of Article 132(1) of that directive, the input supply of its educational services are not subject to value added tax.

That taxable person may, however, rely on the incompatibility of that exemption with point (i) of Article 132(1) of Directive 2006/112 so that that exemption is not applied to it where, even taking account of the discretion granted to Member States, that taxable person could not objectively be regarded as an organisation having objects similar to those of an educational body governed by public law, within the meaning of that provision, which is to be determined by the national court.

In the latter case, the educational services supplied by that taxable person will be subject to value added tax and that person could then benefit from the right to deduct input value added tax.
ECJ - C-319/12 - (MDDP) – 28 November 2013

Liable person in case of input VAT adjustment  New !

Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonisation of the laws of the Member States relating to turnover taxes – Common system of value added tax: uniform basis of assessment, as amended by Council Directive 95/7/EC of 10 April 1995, must be interpreted as precluding the recovery of amounts due following the adjustment of a value added tax deduction from a taxable person other than the person who applied that deduction.
ECJ - C-622/11 – 10 October 2013 - (Pactor Vastgoed)

VAT - Notion of price including the tax  New !

Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax, in particular Articles 73 and 78 thereof, must be interpreted as meaning that, when the price of a good has been established by the parties without any reference to value added tax and the supplier of that good is the taxable person for the value added tax owing on the taxed transaction, in a case where the supplier is not able to recover from the purchaser the value added tax claimed by the tax authorities, the price agreed must be regarded as already including the value added tax.
ECJ - C-249/12 and C-250/12 (Tulicã) – 7 November 2013

Preferential customs arrangement  New !

The second indent of the first subparagraph of Article 889(1) of Commission Regulation (EEC) No 2454/93 of 2 July 1993 laying down provisions for the implementation of Council Regulation (EEC) No 2913/92 of 12 October 1992 establishing the Community Customs Code, as amended most recently by Commission Regulation (EC) No 214/2007, must be interpreted as not precluding a request for repayment of customs duties where preferential customs treatment was requested and granted at the time the goods were placed in free circulation and it was only subsequently, in the course of a post-clearance examination after the expiry of the preferential customs arrangement and the re-establishment of the customs duties normally due, that the authorities of the State of import recovered the difference between that and the customs duty applicable to goods originating from a non-member country.
ECJ - Case C-175/12 (Sandler) - 24 October 2013

VAT refund - Default interest  New !

L’article 183 de la directive 2006/112/CE du Conseil, du 28 novembre 2006, relative au système commun de taxe sur la valeur ajoutée, doit être interprété en ce sens qu’il s’oppose à ce qu’un assujetti ayant demandé le remboursement de l’excédent de la taxe sur la valeur ajoutée payée en amont sur la taxe sur la valeur ajoutée dont il est redevable ne puisse obtenir de l’administration fiscale d’un État membre des intérêts de retard sur un remboursement effectué tardivement par cette administration, pour une période au cours de laquelle étaient en vigueur des actes administratifs excluant le remboursement, ultérieurement annulés par une décision de justice.
CJUE - C-431/12 (Rafinãria Steaua Românã)– 24 octobre 2013

EU - Excises rates in force  

Excise rates (alcohol, tobacco and energy) applicable within the EU have been updated on 1st July 2013.
(http://ec.europa.eu/taxation_customs/taxation/excise_duties/alcoholic_beverages/rates/
index_fr.htm)

Croatia – EU accession  

On 1st July 2013, Croatia became the 28th member of the European Union. As of this date, flows of goods to Croatia from France are treated as expeditions, while flows of goods to France from Croatia are treated as introductions. Therefore, these flows must be declared in the Intrastat (DEB).

The country code for Croatia is "HR". Croatian VAT number is composed of the HR code followed by 11 digits.

Germany - Proof of shipment for intra-EU deliveries   

Since 1st January 2012, German suppliers are requiered to a "Gelangensbestätigung (entry certificate), i.e. a confirmation signed by the recipient stating that the goods have arrivedin the country of destinationas evidence of the intra-EU delivery.

After a transitional period, the above new rules have been definitely enacted and will enter into force as from 1st October 2013.

The German regulations however allows alternative means of proof of the transport:

- Waybills, e.g. a CMR waybill signed by the consignor and the consignee;
- Transport documents, such as a confirmation by the freight forwarder showing, amongst other information, the month in which the goods arrived;
- In cases where the dispatch is carried out by means of a courier, proof can be provided through a tracking and tracing protocol.
- Further options have been introduced for shipments via postal services, as well as for pick-up supplies.

Italy - Increase of standard VAT rate   

According to the last Italian finance bill the standard VAT rate should be increased from 21% to 22% as from 1 July 2013.

However, on 26 June the Italian Council of Ministers decided to postpone the increase to 1st October 2013.

Norway - VAT representation   

Norway has modified its legislation with respect to the VAT representation of non-resident taxpayers:

- The invoice corresponding to the transaction performed by a foreign business does not need to be sent any longer through a VAT representative in Norway. Invoices can be sent directly by the foreign business to the customer. However, in this case, the invoice must still include the name of the representative and comply with the Norwegian invoicing regulations.

- The VAT representative is no longer jointly and severally liable for the VAT provided that the foreign business be established in a country with which Norway has entered into an agreement regarding the exchange of information and collection of VAT (notably France).

Slovenia - Increase of VAT rates   

The standard VAT rate has been increased from 20 % to 22 % and the reduced VAT rate from 8.5 % to 9.5 % as from 1 July 2013.

Greece – Reduced VAT rate  

On 27 July 2013 Greece decided to reintroduce the reduced VAT rate of 13% on restaurant services, the supply of takeaway foods and the delivery of prepared packaged meals.

The new rate applies on a temporary basis from 1 August 2013 through 31 December 2013.

Israel - Increase of the standard VAT rate   

The standard VAT rate has been increased from 17% to 18% on 2 June 2013.

EU - VAT rates in force  

Publication of the VAT rates in force on 1st July 2013 in the 28 Member States
(taxud 16 July 2013)

Burma  

Publication in OJ L 181 of 29/06/2013 regulation (EU) N° 607/2013 of the European Parliament and of the council of 12 June 2013 repealing regulation (EC) N° 552/97 which temporarily withdrawn the access to the tariff preferences for Myanmar / Burma.

Military items  

Publication in the Official Journal of 28/06/2013 Decree N° 2013-542 of 26 June 2013 amending Decree N° 2012-901 of 20 July 2012 relating to imports and exports outside the territory of the European Union of military equipment, weapons and ammunition and related materials and intra-Community transfers of defense-related. The enforcement of the so called “unique licence” for transfer or export, war materials, arms, ammunition and related equipment is postponed to 9 January 2014.

Protected species  

Publication in OJ L 169 of 21/06/2013 of commission implementing regulation (EU) N° 578/2013 of the commission of 17 June 2013 suspending the introduction into the Union of specimens of certain species of wild fauna and flora. The list of the species concerned is modified.

Modernised customs code  

Publication in OJ L 165 of 18/06/2013 regulation (EU) N° 528/2013 of the european parliament and of the council of 12 June 2013 amending Regulation (EC) N° 450/2008 establishing the Community Customs Code (Modernised Customs Code) with respect to the date of application.
The deadline for the application of Regulation (EC) No 450/2008 (Modernised Customs Code - MCDC) is postponed to 1st November 2013, to allow the European Parliament and the Council to complete the adoption process of the revision of the Union customs code.

Pension funds – Right to deduction  

Article 17 of Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonisation of the laws of the Member States relating to turnover taxes – Common system of value added tax: uniform basis of assessment must be interpreted as meaning that a taxable person who has set up a pension fund in the form of a legally and fiscally separate entity, such as that at issue in the main proceedings, in order to safeguard the pension rights of his employees and former employees, is entitled to deduct the value added tax he has paid on services relating to the management and operation of that fund, provided that the existence of a direct and immediate link is apparent from all the circumstances of the transactions in question.
ECJ - C-26/12 (PPG) – 18 July 2013

Unlawful renoval of goods – Customs & VAT consequences  

1. Article 203(1) of Council Regulation (EEC) No 2913/92 of 12 October 1992 establishing the Community Customs Code, as amended by Council Regulation (EC) No 1791/2006 of 20 November 2006, must be interpreted as meaning that a theft of goods placed under customs warehousing arrangements constitutes an unlawful removal of those goods within the meaning of that provision, giving rise to a customs debt on importation. Article 206 of that regulation is capable of applying only to situations in which a customs debt is liable to be incurred pursuant to Articles 202 and 204(1)(a) of that regulation.
2. The second subparagraph of Article 71(1) of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax must be interpreted as meaning that the theft of goods placed under customs warehousing arrangements gives rise to the chargeable event and causes value added tax to become chargeable.
ECJ - C-273/12 (Harry Winston) - 11 July 2013

Logistics services – Place of supply rule  

Article 47 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax, as amended by Council Directive 2008/8/EC of 12 February 2008, must be interpreted as meaning that the supply of a complex storage service, comprising admission of goods to a warehouse, placing them on the appropriate storage shelves, storing them, packaging them, issuing them, unloading and loading them, comes within the scope of that article only if the storage constitutes the principal service of a single transaction and only if the recipients of that service are given a right to use all or part of expressly specific immovable property.
ECJ - C-155/12 (RR Donnelley Global Turnkey Solutions) – 27 June 2013

VAT - Principle of fiscal neutrality  

The principle of fiscal neutrality does not preclude the tax authorities of a Member State from imposing upon a taxable person who has not fulfilled within the period prescribed by national legislation his obligation to record in the accounts and to declare matters affecting the calculation of the value added tax for which he is liable a fine equal to the amount of the value added tax not paid within that period where the taxable person has subsequently remedied the omission and paid all the tax due, together with interest. It is for the national court to determine, in view of Articles 242 and 273 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax, whether in the light of the circumstances of the main proceedings – in particular the period within which the irregularity was rectified, the seriousness of that irregularity, and the presence of any evasion or any circumvention of the applicable legislation that is attributable to the taxable person – the amount of the penalty imposed goes beyond what is necessary to attain the objectives of ensuring the correct collection of tax and preventing evasion.
ECJ - C-259/12 (“RODOPI-Ì 91”) - 20 June 2013

Identification of the recipient of a service  

Contractual terms, even though they constitute a factor to be taken into consideration, are not decisive for the purposes of identifying the supplier and the recipient of a ‘supply of services’ within the meaning of Articles 2(1) and 6(1) of Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonisation of the laws of the Member States relating to turnover taxes – Common system of value added tax: uniform basis of assessment, as amended by Council Directive 2000/65/EC of 17 October 2000. They may in particular be disregarded if it becomes apparent that they do not reflect economic and commercial reality, but constitute a wholly artificial arrangement which does not reflect economic reality and was set up with the sole aim of obtaining a tax advantage, which it is for the national court to determine.
ECJ - C-653/11 (Paul Newey) - 20 June 2013

Taxable person - Definition  

Article 9(1) of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax is to be interpreted as meaning that a natural person who is already a taxable person for value added tax purposes in respect of his activities as a self-employed bailiff must be regarded as a ‘taxable person’ in respect of any other economic activity carried out occasionally, provided that that activity constitutes an activity within the meaning of the second subparagraph of Article 9(1) of Directive 2006/112.
ECJ - C-62/12 (Kostov) - 13 June 2013

Customs duty exemption  

Article 561(2) of Commission Regulation (EEC) No 2454/93 of 2 July 1993 laying down provisions for the implementation of Council Regulation (EEC) No 2913/92 establishing the Community Customs Code, as amended by Commission Regulation (EC) No 993/2001 of 4 May 2001 must be interpreted as meaning that the total relief from import duties provided for by that provision for a means of transport used privately by a person established in the customs territory of the European Union may be granted only if such use is provided for in a contract of employment between that person and the owner of the vehicle established outside that territory.
ECJ - C-182/12 (Fekete) – 7 March 2013

Exempt financial transactions  

Article 13B(d)(6) of Sixth Council Directive 77/388/EEC must be interpreted as meaning that advisory services concerning investment in transferable securities, provided by a third party to an investment management company which is the manager of a special investment fund, fall within the concept of ‘management of special investment funds’ for the purposes of the exemption laid down in that provision, even if the third party has not acted on the basis of a mandate within the meaning of Article 5g of Council Directive 85/611/EEC of 20 December 1985 on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS) as amended by Directive 2001/107/EC of the European Parliament and of the Council of 21 January 2002.
ECJ - C-275/11 (GfBk) – 7 March 2013

Import VAT   

Article 211 of Council Directive 2006/112/EC of 26 November 2006 on the common system of value added tax must be interpreted as not precluding the application of a national rule of a Member State, such as that at issue in the main proceedings, which subjects the deferment of payment of VAT due on importation to the condition that a certificate must be obtained, not being required by the provisions of this Directive, provided that the conditions for obtaining such a certificate respect the principle of fiscal neutrality which it is for the referring court to verify.
ECJ - C-79/12 (SC Mora) – 21 February 2013

Taxable transactions  

The existence of a direct and immediate link between a given transaction and the taxable person’s activity as a whole for the purposes of determining whether the goods and services were used by the latter ‘for the purposes of taxable transactions’ within the meaning of Article 17(2)(a) of Sixth Council Directive 77/388/EEC, depends on the objective content of the goods or services acquired by that taxable person.
In this case, the supplies of lawyers’ services, whose purpose is to avoid criminal penalties against natural persons, managing directors of a taxable undertaking, do not give that undertaking the right to deduct as input tax the VAT due on the services supplied.
ECJ - C-104/12 (Becker) – 21 February 2013

Right to deduction  

1. The provisions of Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonisation of the laws of the Member States relating to turnover taxes – Common system of value added tax: uniform basis of assessment, as amended by Council Directive 94/5/EC of 14 February 1994, must be interpreted as not precluding national legislation, such as that at issue in the main proceedings, under which the right to deduct value added tax may be refused to taxable persons who are recipients of services and are in possession of invoices which are incomplete, even if those invoices are supplemented by the provision of information seeking to prove the occurrence, nature and amount of the transactions invoiced after such a refusal decision was adopted.
2. The principle of fiscal neutrality does not preclude the tax authority from refusing to refund the value added tax paid by a company providing services, in the case where the exercise of the right to deduct the value added tax levied on those services has been denied to the companies receiving those services by reason of the irregularities confirmed in the invoices issued by that service-providing company.
ECJ - C-271/12 – 8 May 2013

Taxable basis  

1. Article 18(c) of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax is to be interpreted as also covering the cessation of the taxable economic activity as a result of the removal of the taxable person from the value added tax register.
2. Article 74 of Directive 2006/112 is to be interpreted as precluding a provision of national law under which, in the event of the cessation of the taxable economic activity, the taxable amount of the transaction is to be the open market value of the assets in existence at the time of that cessation, unless that value corresponds in practice to the residual value of those goods at that date and account is thus taken of the change in the value of those goods between the date of their acquisition and the date of the cessation of the taxable economic activity.
3. Article 74 of Directive 2006/112 has direct effect.
ECJ - C-142/12 (Marinov) - 8 May 2013

Right to deduction  

1. The principle of the neutrality of value added tax, as given specific definition by the case-law relating to Article 203 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax, must be interpreted as precluding a tax authority from refusing, on the basis of a provision of national law intended to transpose that article, the supplier of an exempt supply the refund of value added tax invoiced in error to a customer on the ground that the supplier had not corrected the erroneous invoice, in circumstances where that authority had definitively refused the customer the right to deduct that value added tax and such definitive refusal results in the system for correction provided for under national law no longer being applicable;
2. The principle of the neutrality of value added tax, as given specific definition by the case-law relating to Article 203 of Directive 2006/112, may be relied on by a taxable person in order to contest a provision of national law that makes the refund of value added tax invoiced in error conditional on the correction of the incorrect invoice, in circumstances where the right to deduct that value added tax has definitively been refused and such definitive refusal results in the system for correction provided for under national law no longer being applicable.
ECJ - C-138/12 (Rusedespred) – 11 April 2013

VAT registration  

Articles 213, 214 and 273 of Council Directive 2006/112 EC of 28 November 2006 on the common system of value added tax must be interpreted as meaning that the tax authority of a Member State may not refuse to assign a value added tax identification number to a company solely on the ground that, in the opinion of that authority, the company does not have at its disposal the material, technical and financial resources to carry out the economic activity declared, and that the owner of the shares in that company has already obtained, on various occasions, such an identification number for companies which never carried out any real economic activity, and the shares of which were transferred immediately after obtaining the individual number, where the tax authority concerned has not established, on the basis of objective factors, that there is sound evidence leading to the suspicion that the value added tax identification number assigned will be used fraudulently. It is for the referring court to assess whether that tax authority provided serious evidence of the existence of a risk of tax evasion in the case in the main proceedings.
ECJ - C-527/11 (Ablessio) – 14 March 2013

Right to deduction  

1. Article 203 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax must be interpreted as meaning that:
– the value added tax entered by a person on an invoice is payable by him regardless of whether a taxable transaction actually exists;
– it cannot be inferred from the mere fact that the tax authorities did not correct, in a tax adjustment notice addressed to the issuer of that invoice, the value added tax declared by the latter that those authorities have acknowledged that the invoice corresponded to an actual taxable transaction.
2. The principles of fiscal neutrality, proportionality and the protection of legitimate expectations must be interpreted as not precluding the recipient of an invoice from being refused the right to deduct input value added tax because there is no actual taxable transaction even though, in the tax adjustment notice addressed to the issuer of that invoice, the value added tax declared by the latter was not adjusted. However, if, in the light of fraud or irregularities, committed by the issuer of the invoice or upstream of the transaction relied upon as the basis for the right of deduction, that transaction is considered not to have been actually carried out, it must be established, on the basis of objective factors and without requiring of the recipient of the invoice checks which are not his responsibility, that he knew or should have known that that transaction was connected with value added tax fraud, a matter which it is for the referring court to determine.
ECJ - C-642/11 (Stroy trans) # 643/11 (LVK-56) – 31 January 2013

Customs classification  

Consideration of the question raised has disclosed no factor of such a kind as to affect the validity of Commission Regulation (EC) No 1031/2008 of 19 September 2008 amending Annex I to Council Regulation (EEC) No 2658/87 on the tariff and statistical nomenclature and on the Common Customs Tariff, in so far as it classifies under CN code 8443 31 91 of the Combined Nomenclature, contained in Annex I to Regulation No 2568/87, as amended by Council Regulation (EC) No 254/2000 of 31 January 2000, multifunctional printers, such as those at issue in the main proceedings, combining a laser printing module and a scanning module, with a copying function, released for free circulation in April 2009
ECJ - C-361/11 (Hewlett-Packard) – 17 January 2013

Insurance transactions  

1. The supply of insurance services for a leased item and the supply of the leasing services themselves must, in principal, be regarded as distinct and independents supplies of services for VAT purposes. It is for the referring court to determine whether, having regard to the specific circumstances of the case in the main proceedings, the transactions concerned are so closely linked that they must be regarded as constituting a single supply or whether, to the contrary, they constitute independent services.
2. Where the lessor insures the leased item itself and re-invoices the exact cost of the insurance to the lessee, such a transaction constitutes, in circumstances such as those at issue in the main proceedings, an insurance transaction within the meaning of Article 135(1)(a) of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax.
ECJ -C-224/11 (BG¯ Leasing) – 17 January 2013

Lump sum indemnity for recovery costs due to the creditor in case of late payment  

Since January 1st, 2013, terms of sale must include a new entry regarding the lump sum compensation for recovery costs owed to the creditor in case of late payment.
Law n° 2012-387 of 22 March 2012 provides that any business in a situation of late payment is automatically debtor of a lump sum of € 40 intended to compensate collection costs. Such indemnity is to be charged in addition to the late payment interest.
The lump sum compensation is due in case of late payment of any debt whose payment period began to run after January 1st, 2013, including invoices in relation to a contract that was entered into before this date.

New invoicing rules : transposition of Directive 2010/45/UE dated 13 July 2010  

New principle: invoicing rules of the country where the supply of goods or services is taxable.
Two exceptions : invoicing rules of the country of the supplier apply for :
- Transactions taxable in an EU country and for which the recipient is liable for the VAT under the reverse charge mechanism.
- Transactions taxable in a non-EU country.
French invoicing rules then apply to
- Domestic transactions.
- Transactions performed by a supplier when VAT is paid by the recipient in another EU Member State under the reverse charge mechanism.
- Transactions performed by a French supplier and taxable outside the EU.
Now, an invoice is considered as an original invoice provided it is generated electronically. Scanned paper invoices are not considered as original documents.
When invoices are issued by an electronic process other than EDI (electronic data interchange) or the electronic signature, the taxable person must put in place, by any manners, permanent and documented controls to ensure the authenticity of the invoice, the integrity of its content, readability and a reliable link between the invoice and the transaction to which it corresponds.
Scanned versions of paper invoices are not regarded as original invoices.
Mentions on the invoices : changes imposed by the Directive
- The provision of the national law or the VAT Directive referring to the reverse charge mechanism is not required anymore. The mention “Reverse charge” is mandatory.
- For the special margin schemes (e.g. travel agency), the reference to the provision of the national law or VAT Directive is not required anymore. The required mention is either “Margin scheme - second hand goods” or “Margin scheme - works of art” or “Margin scheme - collector‘s items and antiques” or “Margin scheme - travel agents”.
- For invoices issued by the customer on behalf of the supplier, the mention “Self-billing” has to be quoted on the invoice.
The French authorities should comment on these new invoicing provisions in the coming weeks.

New VAT rates applicable as from 1st January 2014  

According to Article 68 of the third amending finance bill for 2012, the VAT rates shall be amended as follows as from 1st January 2014:
- Increase of the standard rate: 19.6% ¨ 20%
- Increase of the medium rate: 7% ¨ 10%
- Decrease of the reduced rate: 5.5% ¨ 5%

Suspensive VAT regimes   

The French customs authorities have commented on the new VAT warehouse regimes applicable since 1 January 2011 i.e.:
- the warehouse for imported goods (RFSI;
- the warehouse for goods to be exported or shipped outside the fiscal territory (RFSE);
- the warehouse for duty-free shops or counters at ports and airports (RFSCV);
- the warehouse for work operations, maintenance or construction relating to infrastructures or facilities used in the framework of international agreements or treaties (RFSOI);
- the warehouse for imported goods to be shipped outside the fiscal territory after processing (RFSP).
(Guidelines of 7 January 2013 - BUDD300319C)

AEO – Self-assessment  

The AEO Self-Assessment and its explanatory notes have been updated in English. Other language versions will be published later
http://ec.europa.eu/taxation_customs/customs/policy_issues/customs_security/aeo/index_en.htm)

AEO – Mutual recognition EU/USA  

Reciprocal implementation of the EU's Authorised Economic Operator (AEO) scheme and the US Customs and Trade Partnership Against Terrorism (C-TPAT) programme has been effective since 31 January 2013.

Encryption – Mass market items  

The new note to note 3 "cryptography" for dual-use items referred to under Category 5, Part II of the Wassenaar Arrangement list is to clarify the conditions under which a software or hardware can be considered available to the public without restriction within the meaning of paragraph a) of the note (Wassenaar plenary Assembly in December 2102) and therefore qualify as a mass market item
In addition to the conditions already laid down, it is now stated that:
- the item must have a potential interest to a wide range of individuals and businesses; and
- the price and information about the main features of the property must be available before purchase, without the need to consult the vendor or supplier.
In France, the "cryptography" note has implications both regarding the regulation on dual-use good and technologies (SBDU formalities) but also regarding the specific regulations applicable to encryption items (ANSSI formalities).

Military items  

As of June 30, 2013, prior approval (PA) and the export authorization of war materials (AEMG) will be merged into a single procedure, the single license. This authorization will enable the holder to provide controlled information in the framework of negotiations, to contract and export the military items.
Similarly, a unique global license will replace the current APG and AGEMG.

Dock dues in the French overseas departments  

If the manufacturing, processing or renovation of tangible goods are subject to the dock dues (“octroi de mer”) in Guadeloupe, Martinique, French Guiana and Reunion, the levy is however not applicable to activities consisting in manufacturing and installing joinery for construction.
In fact, these operations are production activities of real estate and services, which are excluded from the scope of dock dues (French civil Supreme Court - No. 11-26815 - 15 January 2013).

Liability of customs brokers  

A customs broker, as a specialized agent, must ensure that the customs declaration he files is compliant with the customs regulations and, if necessary, advises his client, even though it would also be a customs broker (in case of sub-proxy) and it would fail to meet its own obligations, to edit a document so that the importer can obtain a benefit under this regulation.
In the case at hand, a first customs broker not directly instructed by the importer gave a mandate to another customs broker to perform the customs clearance. This second customs broker was subsequently pursued by the administration to collect anti-dumping duties that should have been paid for the products. In fact, the invoice had not been issued by the actual Chinese exporter but by an agent based in Hong Kong, which could lead to the application of anti-dumping duties.
The French civil supreme Court has ruled that the second customs broker still has a duty to advise, even though it was not in direct contact with the importer (if subcontracting clearance). This obligation remains between customs brokers in case of subcontracting of the customs clearance.
Of course, the contractual liability of the second customs broker must be assessed in the light of the information and instructions that have been transmitted by the first customs broker. It is for the judge to assess this responsibility but it can be assumed that the liability of the sub-customs broker will be even stronger than the first customs broker had simply referred the case to the second customs broker.

European Union - VAT  

Publication of the VAT rates in force on 14 January 2013 in the 27 Member States
(Taxud.c.1 (2013)69198 – EN).
The EU Commission refers France and Luxembourg to the Court of Justice over reduced VAT rates on e-books
The European Commission has decided to refer France and Luxembourg to the Court of Justice of the European Union for applying reduced rates of VAT to e-books. EU law is very clear on which goods and services are eligible for a reduced VAT rate. The provision of e-books is an electronically provided service and as such cannot benefit from a reduced rate.
One of the guiding principles of the on-going revision of VAT rates is that similar goods and services should be subject to VAT at the same rates and that technological progress should be taken into account. The Commission is to make proposals on reduced rates by the end of 2013 under the new VAT strategy. Meanwhile, the European Commission is taking its role of guardian of the Treaties seriously by enforcing the rules of the Union (IP/13/137 of 21 February 2013)

Czech Republic – VAT  

The standard VAT rate was increased from 20% to 21% as of 1 January 2013. At the same time, the reduced rate was increased from 14% to 15%.

Moreover, as from 2014 VAT returns will have to be filed electronically.

Cyprus - VAT  

The standard VAT rate has been increased from 17 % to 18% as from 14th January 2013.
This rate will be increased to 19 % in January 2014.

The reduced rate of VAT will be increased from 8% to 9% in January 2014.

The 5% VAT rate will remain unchanged throughout this period.

China - VAT  

After the Shanghai region, the last quarter of 2012 saw the completion of the second wave of VAT reform in the provinces of Beijing, Jiang Su, An Hui, Guang Dong, Zhe Jiang, Fu Jian, Hu Bei and Tian Jin. The transactions covered by the reform are specified in Circular No. 111 and are related to transport services (VAT 11 %), research and development (VAT 6 %), leasing of movable tangible property (VAT 17 %), information technology services (VAT 6 %), cultural innovations (VAT 6 %), consulting (VAT 6 %).

VAT reform will be extended to additional provinces this year and should cover new sectors: financial services, insurance, construction, telecommunications...

EU / Colombia / Peru trade agreement   

EU signed a trade agreement with Colombia and Peru on 26 June 2012. This agreement must now be ratified by the three parties.

VAT rates in the EU   

Publication of the VAT rates in force in the EU Member States on 1st July 2012 (taxud.c.1(2012)910012 – EN )

Excise duties in the EU   

Publication of the excise duty rates in force in the EU on 1st July 2012
(http://ec.europa.eu/taxation_customs/taxation/excise_duties/index_en.htm)

Triangular transactions – place of taxation of the intracommunity acquisitions and impact on the right to deduct the self-assessed VAT   

French Administrative guidelines dated January 26, 2012 (BOI 3 D-1-12) follows a Counsel of State case law (C.E. 23 décembre 2011, n° 330608, 3ème et 8ème s.-s., Ministre c. / S.A. Subtil France).
Reminder of the rules applicable to triangular transactions :
Article 258 C of the French tax code (article 40 & 41 of Directive 2006/112/EC) provides that the place of an intra-Community acquisition of goods shall be deemed to be the place where dispatch or transport of the goods to the person acquiring them ends.
Article 141 of Directive 2006/112/EC allows Member States to implement for simplified regime applicable to triangular intra-Community operations (A  B (France)  C) when conditions are met. The simplification measure is provided by article 258D of the French tax code :
- Intracommunity acquisition (sale A to B) is not subject to VAT in Member State of C (article 141 above mentioned).
- the tax liability for domestic subsequent delivery (from B to C) is transferred to C according to Article 197 of Directive 2006/112/EC (Article 283-2 quarter of the French tax code).
When the conditions to apply the simplification are not met, the place of the intra-Community acquisition (sale A to B) is deemed to be in France if the acquirer cannot show that he was subject to VAT in respect of that transaction in the other Member State (Article 41 of Directive 2006/112/CE). Consequently, the intra-Community acquisition is subject to French VAT as long as the acquirer has indicated his French VAT identification number (article 258 C-II of the French tax code). Such a procedure is refered to as a “safety net” (filet de securité). Following the ECJ position (EJC. 22 April 2010, aff. 536/08 et 539/08, 3e ch., Staatssecretaris van Financiën c. / X et Fiscale eenheid Facet BV / Facet Trading BV), the French supreme administrative court confirmed the VAT self-assessed according to « safety net » procedure is not deductible for B notably because the goods are not delivered in France and therefore, cannot be considered as used for the performance of taxable transactions in France.
The Operators intending to apply the triangular sales simplification measure must therefore ensure that all the conditions are met, in particular when the operator is placed in the position of the buyer-reseller (middleman).

Reverse charge mechanism applicable to the purchase of natural gas and electricity (French Administration Guideline dated April 11,2012, BOI 3-A-4-12)   

Article 16 of amended finance law for 2012 has introduced into French law, as from April 1st, 2012, a reverse charge mechanism specific to the purchases of electricity and natural gas. The reverse charge mechanism applies to the following transactions :
- purchases of electricity and natural gas (and connected services)
- from suppliers established in France
- by companies established in France for needs other than their own consumption, i.e. purchases in the view to resell.
The French supplier has not to invoice French VAT and must add a specific mention on its invoices i.e. “VAT due by the client – Article 283-2 quinquies of the French tax code”. The value of the supplies must be reported on line 05 of the French VAT return. The person liable for the payment of the VAT is now the recipient of the services under the reverse charge mechanism. The value excluding VAT is reported on line 02 of the French VAT return.

Reverse charge mechanism applicable to electronic communications (French administrative guideline dated April 4, 2012 – BOI 3 A-3-12)   

As from 1st April 2012 article 16 of amended finance law for 2012 has introduced into French law (article 283-2 octies of the FTC) a reverse charge mechanism specific to electronic communications services rendered to recipients VAT identified in France. The electronic communications services mean any services which allow the emission, the transmission or the reception of signs, signals, images or sounds, by electromagnetic way. Are not covered by the new rule, television services, radios services and audio-visual medias on demand put available to the public by electronic way, rentals of equipment (phone equipment, modem…).
The reverse charge mechanism should apply to services rendered between suppliers of electronic telecom services when they are purchased in the view to be resold to final consumers (individuals or not) or to be resold to another telecom operator as described hereafter:
- the supplier is established in France or outside France. The situation where the supplier is established in France and the services taxable in France is already covered by Article 283-2 of the French tax code (B to B services).
- the recipient is VAT identified in France
The person liable for the payment of the VAT is now the recipient of the services under the reverse charge mechanism. The value excluding VAT is reported on line 02 of the French VAT return.
The supplier does not have to charge French VAT anymore on its invoices but he is required to add the mention “VAT due by the client – Article 283-2 octies of the French tax code”. The value of the supplies must be reported on line 05 of the French VAT return.

VAT wrongly invoiced and right to recover it   

Further to a breach of a distribution agreement by company Tobacco (manufacturer), the latest agreed to pay to the distributor a sum in compensation of the prejudice undergone. Indemnity had been invoiced by the distributor with French VAT and the manufacturer claimed the refund to the French tax authorities. The refund was denied.
The French supreme administrative court has already accepted the deduction of VAT wrongly charged when it was not obvious that the transactions was not taxable (CE 22-11-1978 n° 2419, Semeillon ; CE 14-12-1984 n° 41178, SA Sarim). This position is not repealed.
However, in the present case, the Supreme administration court refuses the deduction of the VAT by a company that, according to it, could be unaware of only the indemnity was placed outside the scope of VAT.
In conclusion, it appears that the previous case law mentioned above cannot be invoked in the case where VAT has been wrongly charged on a won taxable indemnity.
Lease of empty spaces dedicated to professional use – Validity of the VAT option (Supreme administration court December 23, 2011 n° 323189, 9e et 10e s.-s., Sté Mercedes)
To date, French tax authorities and French Courts used to require that companies draft and file a letter of option with their tax center. In the absence of such a document, the right to apply VAT on the lease and to recover the input VAT the corresponding expenses could be denied.
In the case at hand, the Counsel of State recognizes that the option to apply VAT on leases of empty spaces dedicated to professional use can be exercised upon the declaration of taxable activities provided that the declaration shows sufficient details to identify the building covered by the option.
In practice, this is easy for a new company having only one building concerned by the option. In the case where the new company is leasing several building with different VAT regime, the current registration form does not permit to identify for which building the option is made. In the case where, the declaration shows several buildings, it must identify the building for which the option is exercised. We can expect that the registration form will be modified or we recommend finding any manner to identify on this declaration which building is covered by the option. (Supreme administration Court 21 November 2011 n° 316485, 9e & 10e s.-s., min. c/ Sté Tobacco Exporters International)
Lease of empty spaces dedicated to professional use – Validity of the VAT option
To date, French tax authorities and French Courts used to require that companies draft and file a letter of option with their tax center. In the absence of such a document, the right to apply VAT on the lease and to recover the input VAT the corresponding expenses could be denied.
In the case at hand, the Counsel of State recognizes that the option to apply VAT on leases of empty spaces dedicated to professional use can be exercised upon the declaration of taxable activities provided that the declaration shows sufficient details to identify the building covered by the option.
In practice, this is easy for a new company having only one building concerned by the option. In the case where the new company is leasing several building with different VAT regime, the current registration form does not permit to identify for which building the option is made.
In the case where, the declaration shows several buildings, it must identify the building for which the option is exercised. We can expect that the registration form will be modified or we recommend finding any manner to identify on this declaration which building is covered by the option. (Supreme administration court December 23, 2011 n° 323189, 9e et 10e s.-s., Sté Mercedes)

Generalization of electronic procedures (VAT e-filing and VAT e-payment)   

According to Article 53 of the amending finance law for 2011, the use to the e-filing and e-payment procedures is progressively generalized to all companies.
The obligation to submit VAT returns via the e-filing procedure is implemented through a progressive lowering in three times of the thresholds of obligations:
- As from October 1st, 2012 : for companies liable for CIT
- As from October 1st, 2013 : for all the companies (not liable CIT) having a turnover exceeding 80 000€ HT in the preceding year
- As from October 1st, 2015 : for all the companies
The obligation to pay VAT via the e-payment procedure will enter into force in two times :
- As from October 1st, 2012 : for companies liable for CIT
- As from October 1st, 2014 : for all the companies

Training sessions - place of taxation   

Since 1 January 2011, the place of supply of professional trainings provided to taxable persons is in principle taxable where the recipient is established (Article 259 1° of the FTC)
However, the services which can be regarded as the grant of a right of access to an educational event, such as conferences or seminars, are still taxable where they occur (259 A 5° Bis of the FTC).
According to the French tax authorities, an event is an unusual event with a one-off nature. However, in the absence of precise definition, the issue will be submitted soon to the EU VAT Committee in order to get a harmonized interpretation between Member States.
In the meantime, and as a practical rule, it is decided that trainings realized for the benefit of several taxable persons, occurring over a period not exceeding seven consecutive days, are events in meaning of section 259 A 5 ° bis of the CGI.Therefore, the remuneration of training services delivered under these conditions are to be regarded as access rights taxable at the place where the training is actually delivered (Ruling No. 2012/27 - TCA).

Common transit   

The EU Council adopted a Decision on the position to be taken by the European Union on the issuing of an invitation to Croatia and Turkey to accede to the Convention of 20 May 1987 on a common transit procedure and to the Convention of 20 May 1987 on the simplification of formalities in trade of goods.
As the Joint Committees of the two conventions have already decided that invitations can be issued, the way is now open for Croatia and Turkey to join on 1 July 2012.
The conventions currently cover the EU and the EFTA countries. This extension will result in major simplifications for economic operators engaged in trade between the contracting parties.

Modernised Customs Code   

The European Commission on 20 February 2012 proposed a recast of the Regulation establishing the Modernised Customs Code (MCC) to establish a Union Customs Code.
The MCC Regulation was adopted and entered into force in 2008 but was not yet in application. The recast Regulation will, as regards customs legislation provide the same benefits as those expected from the Modernised Customzs Code, while aligning it to the Lisbon Treaty.

Customs classification   

The Commission has published a Implementing Regulation (EU) No 105/2012 of 7 February 2012 concerning the classification of certain goods in the Combined Nomenclature. This regulation concerns the classification of multifunctional machines which are capable of performing scanning, printing and digital copying functions. According to the Commission, said equipment must be classified under CN code 84 43 31 80.

Economic sanctions – Syria   

EU Regulation No. 36/2012 of the Council of 18 January 2012 concerning restrictive measures because of the situation in Syria was published in OJ L 16/1 of 19 January 2012 and was amended by EU Regulation No. 168/2012 of the Council of 27 February 2012

AEO - Mutual recognition EU / U.S.   

On 4 May 2012 the European Union and the United States of America formally agreed to recognise each other's AEO status. This mutual recognition will enter into force on 1st July 2012.
As from this date, certified trusted traders will enjoy lower costs, simplified procedures and greater predictability in their transatlantic activities (press release IP/12/449 of 4 May 2012).

AEO - Mutual recognition EU / Japan   

Under the Mutual Recognition Agreement between Japan and the European Union the European Commission is required to obtain from the AEO certified operators their authorization to provide the Japanese authorities with information about themselves.
Thus, since December 2011, the Commission is sending to the operators concerned (AEO "security and safety" or "customs simplifications / security and safety") a letter seeking the authorization in question.
Operators which would not have received this request may possibly contact the AEO bureau at Office E3 of the head of the French customs authorities in order to clarify their situation.

EU / United States - Anti-dumping duties   

On 6 February 2012, the European Commission and the US solved their longstanding disputes concerning the US practice of zeroing in the calculation of anti-dumping duties. Both parties signed a roadmap which sets out the steps the US will take to comply with WTO rulings in the future calculation of duties when the US authorities find that imported products enter the US market below the average market price. As a result, no EU exporter should be subject to an anti-dumping duty affected by the practice of zeroing in the future.
For information, the zeroing method is a specific calculation used by the United States to establish the rate of this antidumping duty when foreign exporters want to sell goods in the United States. WTO rulings have confirmed that this specific zeroing method is WTO-inconsistent as it increases, often substantially, the exporter's margin of dumping and thus the amount of anti-dumping duty that the exporter has to pay.

Customs confiscation   

Articles 374 and 376 of the French Customs Code relating to customs confiscation were declared unconstitutional.
The result in this case unconstitutional overbreadth of the ban claim that is binding on every owner, regardless of the circumstances of the case or the good or bad faith of the owner.
Whereas the immediate repeal of sections 374 and 376 of the Customs Code would manifestly excessive consequences, he decided to allow the legislature to remedy the unconstitutionality of these items, it had to be postponed to 1 January 2013 the date of the repeal (Constitutional Council, January 13, 2012, No. 2011-208-QPC).

Antidumping - Products from the USA  

As of 1 May 2102, products falling within the following customs classifications will be subject to an additional duty of 6% (instead of currently 15%):
0710.40.00
8705.10.00
9003.19.00 10
(Regulation (EU) No 308/2012)

European Union - VAT   

Publication of the VAT rates in force on 1 January 2012 in the 27 Member States (taxud.c.1 (2012)134284).

Belarus - VAT   

Vehicles imported in Belarus (as from 24 January 2012):
– The exemption from VAT of imports of transport vehicles has been abolished.
– The taxable base on subsequent sales of vehicles is the sales price.

Belarus - VAT   

Reduced VAT rate on foodstuffs (as from 20 February 2012) :
The reduced rate of 10 % no longer applies to the following products: soya oil, potato starch, sweeteners for people suffering from diabetes, jams, canned fruit and vegetables, juices and live fish.
These products are now subject to the standard VAT rate of 20%.

Belarus - VAT   

The list of items for disabled persons and medical goods which are exempt from VAT has been amended.

Croatia - VAT   

Standard rate is increased has been increased form 23% to 25% as from 1st march 2012
The application of the reduced rate of 10% is extended to the following services and goods:
- edible oil and grease
- baby food
- water supply (except bottled and package water for market supply)
- white sugar

Croatia - VAT   

The deduction of input VAT on the following expensed is no longer possible:
- representation expenses
- supply of vessels, aircrafts, cars and other means of personal transportation as well as their rent (except for vessels and aircrafts used for transportation of passengers and goods and their rent, or purchase for resale, and to cars and other vehicles for personal transportation used for drivers training, vehicle testing, customer service, transport activity of passengers and goods, transportation of deceased, lease and purchase for resale)

Croatia - VAT   

As from 1st January 2013, the threshold for VAT registration will be increased from HRK 85,000 to HRK 230,000. Resident businesses whose taxable supplies did not exceed HRK 230,000 in the preceding calendar year will not be considered taxable persons and thus will not be obliged to register for VAT purposes.

Irland - VAT   

The standard rate of VAT has been increased from 21 % to 23% as from 1 January 2012.The reduced rates of 13.5% and 9% rates of VAT remain unchanged.

Italy - VAT   

Following the European Commission's referral to the ECJ on 24 November 2011, the Italian VAT Act (D.P.R. no. 633/1972) has been amended as from 17 January 2012 regarding the VAT exemption applicable to ships and aircraft. Notably, supplies of vessels used for navigation on the high seas and used for the purpose of commercial or fishing activities, for rescue or assistance at sea or for inshore fishing, are now VAT exempt.
Moreover, the following provisions have been added:
- supplies of warships are VAT exempt
- supplies of services to meet the direct needs of vessels, ships and aircraft, the supply of which qualifies for exemption, and their cargoes, are VAT exempt

United Kingdom - VAT   

Today non-established businesses making taxable supplies of goods and/or services in the UK do not have to register in the UK if the value of said sales does not exceed up £73,000.
As from 1st December 2012, any business which is not established in the UK, which makes taxable sales of goods or services in this country, will have to register and account for UK VAT, regardless of the value of those sales.

China - VAT   

The Ministry of Finance and the State administration of Taxation have provided guidance (two circulars entered into force on 1st January 2012) on the the VAT pilot program in Shanghai and concern exported services rendered to foreign businesses.

Dual-use goods and technologies - New export licenses   

The European Union has adopted 5 new general export authorizations in addition to the authorization EU001 (Regulation EC No 428/2009) that already exists for most dual-use goods and technology exported to the 7 friendly countries (Australia, Canada , USA, Japan, New Zealand, Norway, Switzerland). New general export authorizations are:
] EU002 (exports of certain goods to 6 countries)
] EU003 (export after repair / replacement to 24 countries),
] EU004 (temporary export for exhibition or fair to 24 countries),
] EU005 (exports of certain goods in the telecommunications sector to 9 countries).
] EU006 (exports of certain chemicals to 6 countries).
Finally, License EU001 now expressly covers exports to Liechtenstein.These new provisions are effective 7 January 2012 (EU Regulation No. 1232/2011 of 16 November 2011).

VAT – The “répondant” tolerance   

The so-called “répondant” tolerance laid down by the French administrative guidelines
3 A-9-06 is condemned by the ECJ.
The “répondant” regime allows the person not established in France and the client identified for VAT in France to depart from the reverse charge mechanism by agreeing in writing that the tax legally due by the customer will be declared and paid in the name and on behalf of the later via a “répondant” by the taxable person not established in France.
This tolerance is considered by the ECJ as being non-compliant with Directive 2006/112/EC notably on the grounds that the input VAT that the supplier / provider abroad incurs in France cannot be compensated with that it collects in the name and on behalf of its clients
(ECJ - Case C-624/10 - Commission v. / France of 15 December 2011).

Yachts rental – Conditions of the VAT exemption   

On 29 September 2011, the EU Commission has decided to bring an action before the Court of Justice concerning the VAT exemption applied by France to certain transactions involving vessels in breach of EU law (press release # IP/11/1126).
According to the EU Commission, the French legislation and administrative practice still go beyond what is laid down in the VAT Directive, applying the VAT exemption to vessels carrying passengers for reward or used for the purpose of commercial activities, without requiring them to be used for navigation on the high seas.
The issue then remains a grey zone and a VAT exposure exists should the vessel be not operated on the high seas. Moreover, it can be anticipated that France will have to clarify its legislation and administrative practice so that the VAT exemption will not apply any longer for leisure yachts operated in the territorial waters.

Invoicing rules   

The European Commission has published Explanatory Notes to provide a better understanding of VAT invoicing rules laid down by Council Directive 2010/45/EU, which will enter into force on 1st January 2013 (Europa website).
For memory, the directive provides for a simplification of rules on electronic invoicing (currently limited to EDI invoices or accompanied by an electronic signature) and specifies for different types of transactions (domestic sales of goods, intra-Community supplies, exports ...) what are the national invoicing rules that are territorially applicable (country of establishment or country where the operation takes place).

Fairs and exhibitions   

The ECJ has held that a supply of services consisting of the design, temporary provision and, where necessary, the transportation and assembly of a fair or exhibition stand for clients presenting their goods or services at fairs and exhibitions may come within the scope of:
- Art. 56(1)(b) of the EU VAT Directive (currently: Art. 59(b)), if the stand is designed or used for purposes of advertising;
- Art. 52(a) of the EU VAT Directive (currently: Art. 53), if the stand is designed and provided for a specific fair or exhibition on a cultural, artistic, sporting, scientific, educational, entertainment or similar theme, or if that stand corresponds to a model in respect of which the organizer of a specific fair or exhibition has prescribed the form, size, material composition or visual appearance; and
- Art. 56(1)(g) of the EU VAT Directive (currently: Art. 59(g)), in the case where the temporary provision, for payment, of the constituent material elements of that stand constitutes a determining element of that supply.
(ECJ – Case Inter-Mark Group C-530/09 of 27 October 2011)

Purchase of default debts   

The ECJ has held that an operator who, at his own risk, purchases defaulted debts at a price below their face value does not perform a supply of services and does not carry out an economic activity falling within the scope of the VAT directive when the difference between the face value of those debts and their purchase price reflects the actual economic value of the debts at the time of their assignment (ECJ – Case GFKL Financial Services C-93/10 of 27 October 2011)

Invalidation of a customs declaration   

According to te ECJ a declarant cannot request a court to annul a customs declaration made by it when that declaration has been accepted by the customs authorities. By contrast, according to the EU Customs code, that declarant may request those authorities to invalidate that declaration, even after they have released the goods. At the conclusion of their assessment, the customs authorities must, subject to the possibility of a court action, either reject the declarant's application by reasoned decision or proceed with the invalidation requested (ECJ – Case DP Grup EOOD C-138/10 of 15 September 2011

Customs nomenclature 2012   

The Commission has published Regulation (EU) n°1006/2011 of 27 September 2011 amending Annex I to Council Regulation (EEC) n°2658/87 on the tariff and statistical nomenclature and on the Common Customs Tariff (OJ L 282 of 28 October 2011).

GSP   

In accordance with Regulation (EU) No 512/2011 (OJ L145/11), the generalized system of preferences applicable to developing countries since 1st January 2009 and, initially, until 31 December 2011 under Regulation (EC) No 732/2008 (as amended), is extended until December 31, 2013 in all its forms, waiting for the new GSP scheme.
If it were adopted before 31 December 2013, extension would be shortened accordingly.

Goods under bond: exemption from VAT deposit   

Pursuant to article 120 of the French Customs Code operators can be exempted from providing a guarantee for the VAT on the goods transported in bond or under a suspension of customs duties, taxes or prohibitions. A decree specifies the terms and conditions to qualify for this measure (Decree No. 2011-1103 of 12 September 2011).

Finland - VAT   

The draft budget for 2012 provides that subscriptions to newspapers or magazines may be subject to the reduced VAT rate of 9%. These subscriptions are currently exempt from VAT.

Germany - VAT   

The draft budget for 2012 provides that the threshold below which VAT is due on the receipts (Istbesteuerung) will be increased from EUR 250,000 to EUR 500,000.

Hungary - VAT   

The draft budget for 2012 provides that the standard VAT rate should be increased from 25% to 27%.

Italy - VAT   

Since 17 September 2011, the standard VAT rate has been increased from 20% to 21%.

Portugal - VAT   

The draft budget for 2012 provides that the intermediate rate of VAT of 13% applicable to certain goods could be increased to 23%.

Sweden - VAT   

The draft budget for 2012 provides that the rate of VAT on catering services will be reduced from 25% to 12%.

French dock dues (“octroi de mer”)   

Decision n° 448/2011/ EU of the Council of 19 July 2011 amending decision 2004/162/EC as regards the products that may benefit from exemption from or reduction in French dock dues (“octroi de mer”). This decision is applicable as from 1st February 2012.

VAT rates   

The European Commission has published on its website the VAT rates in force on 1st July 2011(taxud.c.1(2011)759291 – EN).

Excise rates   

The European Commission has published on its website the excise rates in force on 1st July 2011 (energy products, alcohol, and tobacco):
http://ec.europa.eu/taxation_customs/taxation/excise_duties/energy_products/rates/index_en.htm

Dual-use goods – Green Paper   

The European Commission has published on 30 June 2011 a Green Paper on dual-use goods and technologies and invited operators to participate to the open consultation held on this occasion. Exporters and other stakeholders have until 31 October 2011 for providing their comments and answers to the questions raised in the Green Paper (COM(2011)393 final).

Military items   

Publication of law No. 2011-702 of 22 June 2011 on the control of imports and exports of military items and similar equipment, simplification of transfer of such items and defense/security contracts.

French overseas territories – Mayotte   

The recent conversion of the French overseas territory of Mayotte into the new status of overseas department does not have an automatic impact on the customs status of the imported goods or the applicable taxes.
Indeed, under sections LO6113 LO6161-1-24 and the French general code for territorial entities, Mayotte keeps its customs and fiscal autonomy until 2014. This territory also remains outside the customs territory of the EU.

EU / South Korea   

The EU-South Korea free trade agreement will enter into force on 1st July 2011.
The invoice declaration will be the only acceptable proof of preferential origin. EUR 1 certificates will not be accepted as proof of origin. The exporters will have therefore to obtain the status of “approved exporter”.

AEO – Mutual recognition between EU and Japan   

The agreement of mutual recognition of the EU and Japanese AEO programmes will come into force on 24 May 2011.

AEO – Self assessment   

The European Commission has updated the AEO self-assessment and explanatory notes to take account of mutual recognition possibilities.

Common system of VAT – Various clarifications   

Applicable as from 1 July 2011, an EU regulation clarifies several provisions of the VAT Directive 2006/112/EC. The concept of taxable recipient of a service, as well as those of permanent establishment acting as the "recipient of a service" and permanent establishment acting as the "provider of a service" are clarified (EU Regulation 282/2011 dated 15 March 2011).

VAT - Fairs, congresses, conferences, seminars ...   

The French tax authorities comment on the place of supply rules applicable to services referred to in article 259 A 5 ° bis of the French tax code and defines the notion of “right of access" to an event (service taxable where it is physically carried out).
A difference is notably made between training sessions open to the public and those organized for a sole taxable person. Comments are also provided about the complex services rendered to exhibitors by organizers of events (Guidelines 3 A-2-11 dated 28 March 2011).

Anti-dumping – Products originating in the US   

Updating of the products originating in the US which are subject to additional customs duties when imported in the EU. This list, which is shorter than the previous one, is applicable as of 1 May 2011 (Regulation (EU) No. 311/2011 of the Commission dated 31 March 2011).

Dual-use goods and technologies - Opportunity to seek for a decontrol of your goods   

The European Commission has launched a technical consultation seeking input from interested stakeholders on the issue of foreign availability of dual-use items included in the EU dual-use export control list (Annex I of Regulation 428/2009).
The consultation represents an ideal opportunity for exporters to persuade the Commission to decontrol their goods and technology currently covered by the dual-use controls. It will end on 26 April 2011.

Commercial vessels – VAT exemption   

Asked about the VAT exemption applicable to commercial vessels, the French tax authorities confirmed that the three criteria laid down in its doctrine published prior to the amendment of Article 262 II 2 of the FTC (amended finance bill for 2010) remain applicable: commercial flag, presence of a permanent crew, use for commercial activities.
However, no details are given on the concept of navigation on the high seas recently introduced in the FTC (Ruling No. 2011 / 2 - TCA).

EU - Minimum standard VAT rate   

The EU Council of Ministers has decided to maintain the minimum standard rate of VAT at 15% until 31 December 2015 (Press release # 17447/10 + Directive 2010/88/UE).

EU - Travel agents   

On 27 January 2011, the European Commission published three press releases concerning infringement procedures several EU Member States, including France (Czech Republic, Finland, France, Greece, Italy, Poland, Portugal and Spain) regarding the special VAT regime applicable to travel agents (special place of supply rule + margin scheme). In brief, the Commission considers that the travel agents VAT regime is not applicable to the services that said operators invoice to each others.

EU - VAT rates in force   

Publication of the VAT rates in force on 1 January 2011 in the 27 Member States (taxud.c.1-2011- 39295).

Dual-use goods - Export Control   

The penalties for unauthorized exports (exports without a license) of dual-use goods (goods and technologies that could be used for both civilian and military purposes) should be increased in a near future Thus, the prison sentence would be increased from 3 years to 5 years and the fine could be increased from two times the value of the goods to three times.
These provisions clearly announce tighter controls on dual goods and technologies (law proposal No. 1652 on the fight against proliferation of weapons of mass destruction and their vectors).

Jersey  

GSTshould rise from 3% to 5% from June 2011

Export Control (USA)   

For facilitation purposes, the United States plans to merge the system of dual use goods and technologies (EAR) with that of military goods (ITAR). Thus, the new list would be managed by one agency, which should speed up the procedures for obtaining export licenses.
These new regulations are currently discussed at the Congress and could be adopted this year.
Finally, it should be kept in mind that this reform also concerns the EU businesses that integrate products or technology of U.S. origin in their production processes.

Norway  

Non-resident suppliers of electronic services to consumers (BtoC) could have to register for VAT Jul 2011 (2011 budget proposal).

GSP  

New rules of origin regarding the Generalised System of Preferences apply as of 1 January 2011

Russia   

The zero rate of VAT applies as from 1 January 2011on international transportation services and other related services.

UK  

The standard VAT rate increased from 17.5% to 20% as from 4 January 2011.

Poland  

The increase of the standard VAT rate from 22% to 23% is effective from 1st January 2011.

VAT – Right to deduction   

A taxable person has the right to deduct value added tax paid in respect of services supplied by another taxable person who is not registered for that tax, where the relevant invoices contain all the information, in particular the information needed to identify the person who drew up those invoices and to ascertain the nature of the services provided (ECJ - C 438/09 - 22/12/2010).

VAT – Notion of exempt intra-EU supply   

When goods are the subject of two successive supplies between different taxable persons acting as such, but of a single intra-Community transport, the determination of the transaction to which that transport should be ascribed, namely the first or second supply – given that that transaction therefore falls within the concept of an intra-Community supply – must be conducted in the light of an overall assessment of all the circumstances of the case in order to establish which of those two supplies fulfils all the conditions relating to an intra-Community supply.
In circumstances such as those at issue in the main proceedings, in which the first person acquiring the goods, having obtained the right to dispose of the goods as owner in the Member State of the first supply, expresses his intention to transport those goods to another Member State and presents his value added tax identification number attributed by that other State, the intra-Community transport should be ascribed to the first supply, on condition that the right to dispose of the goods as owner has been transferred to the second person acquiring the goods in the Member State of destination of the intra-Community transport (ECJ - C 430/09 - 16/12/2010).

Commercial yachting - VAT   

The ECJ has ruled that the hiring of yachts, with a crew, by individuals for leisure purposes can not benefit from the VAT exemption provided for commercial vessels operating on the high seas (ECJ - C 116/10 - 12/22/2010).

Commercial vessels - VAT exemption   

As from 1 January 2011 the VAT exemption laid down for commercial vessels is applicable only to vessels operating on the high seas, that is to say outside territorial waters.
The new VAT provisions notably apply to commercial yachts.
This legislative change is in response to the infringement proceedings initiated by the Commission against France (see our previous communication on the subject).

VAT taxation of non-equiped premises used for professional purposes   

The option to submit rents to VAT can now be exercised very early i.e. even before to get title to the building. This option allows taxpayers to exercise their rights to deduct input VAT without delay or restrictions. The lessor must be able to evidence that his intention is based on objective factors (administrative guidelines dated 3 Decmeber 2010 – BOI 3 A-8-10).

VAT - CO2 emission quotas   

The amended financial bill draft for 2010 introduces into French law the opportunity provided by Directive No. 2010/23/EU of the Council dated 16 March 2010 to implement a reverse charge mechanism specific to the transactions relating to CO2 emission quotas.
A paragraph 2 septies will be added to Article 283 of the French Tax Code.
As quotas qualify as intangible goods, the territorial rules applicable to such services would be therefore those came into force on 1 January 2010 and laid down in Article 259-1 ° of the French tax code (standard regime for services) for B to B transactions and by articles 259-2 ° and 259 B of the French tax code for B to C transactions.

Minimum standard VAT rate   

The EU Council adopted a directive maintaining the current minimum standard rate of VAT at 15% until 31 December 2015.

French Intrastat (DEB)   

From 1st January 2011, the levels of obligations will be modified (2 instead of 4) and the “net mass” data will be generalized (Decree 2010-1544 date 13/12/2010).

TARIC   

An improved version of the TARIC, the EU's online customs tariff data base, is now available in the TARIC's 21 languages.
It offers new search functions, relating to:
- the type of measures applicable to a product or a chapter and to certain tariff quota
- the (type of) measures applicable during a certain period
- the regulations that are linked to the measures or the EU Official Journal
- the possibility to display more than one product code at the same time.

GSP  

From 1st January 2011, rules of origin under the GSP will be modified, including
- increase in the percentage of the general tolerance rule
- modification of the rules relating to the preferential origin
-specific list rules varies for the less developed countries concerning certain tariff headings.
- new rules and new types of cumulation of origin
(EU Regulation No. 1063/2010 of the Commission date 18 November 2010)

VAT – Exemption of imports followed by intra-EU deliveries   

A decree dated 27 October 2010 (n°2010-1288) details the conditions under which the VAT exemption laid down by article 291-III-4° of the French tax code (article 143(d) of Directive 2006/112/EC) applies and the information/documents required from the importer to benefit from the VAT exemption.
The new provisions come into force as from 1st January 2011.

Refund of EU VAT – Electronic procedure   

The Council has finally adopted the directive providing for the exceptional extension of the deadline for the submission of refund applications for expenses incurred in 2009 from 30 September 2010 to 31 March 2011 (provisional press release 14825/10).

Refund of EU VAT – Electronic procedure   

The Commission’s proposal to postpone until 31 March 2011 the deadline for claiming the refund of the VAT incurred in another Member State has been approved by the European Parliament on 22 September 2010.
The VAT claims for refund relating to expenses incurred during the year 2009 can be therefore validly submitted through the electronic portals after 30 September 2010 and at the latest on 31 March 2011.

Incoterms 2010   

As from 1 January 2011, 11 new ICC 2010 Incoterms will replace the 13 existing ICC 2000 Incoterms. Notably, Incoterms DES, DDU and DAF are deleted and replaced by a new Incoterm DAP, "Delivered at place».

Deduction of VAT – Formal conditions   

A taxable person justifies the recovery of input VAT if she proves that the material conditions of the deduction were originally satisfied and has produced, before the tax authorities have made a decision, a compliant invoice showing the correct date on which the transactions occurred.
In addition, a non compliant invoice can be cancelled by a credit note which numbering can be different from that of the corrected invoice (CJEU - C-368/09 - 15 July 2010).

Refund of VAT to non-resident taxable persons   

The French tax authorities comment on the new electronic reimbursement procedure (conditions, terms ...) open to EU taxable persons for the recovery of VAT incurred in a Member State where they are not established.
These guidelines also contain comments on the 13th Directive procedure of reimbursement for taxable persons established outside the European Union (BOI 3-D 2-10 dated 6 August 2010).

Customs valuation   

For sales performed according to the Incoterm DDP, customs duties may, in accordance with Article 33 of the Community Customs Code, be excluded from the customs value, provided that the import declaration refers to this Incoterm (ECJ -15 July 2010 - Case C-354/09 Gaston Schul BV).

Rules on invoicing   

The Council of the European Union has adopted new rules on VAT invoicing. These new provisions contain some simplifications, notably regarding electronic invoicing, and will apply as from 1st January 2013 (Directive 2010/45/EU of 13 July 2010).

Russia-Kazakhstan-Belarus Customs Union  

As of 6 July 2010, these three countries apply a common customs code. The main consequences of the Customs Union are the introduction of common customs duties, the abolition of customs controls at the borders of these countries and the adoption of common mechanisms of regulation of foreign trade.

VAT refund applications - "8th Directive"   

French decree (No. 2010-789) and “arrête” on the electronic procedure of reimbursement provided for refund of VAT introduced in France by taxable persons established in another Member State and those introduced via the French portal by French taxpayers to recover the VAT paid in another country of the European Union have been published on 12 July 2010.For VAT incurred in 2009, the period within which above claims must be submitted should be exceptionally extended to 31 March 2011 instead of 30 September 2010 (proposal of the EU Commission dated 15 July 2010).

GSP+ - Sri Lanka   

A from 15 August 2010 Sri Lanka will not benefit from the GSP+ any longer.

AEO – New self-assessment questionnaire  

On 26 July 2010, a new questionnaire entered into force. This questionnaire has been harmonized at an EU level and notably contains a more detailed security/safety section.
Operators may however use the former questionnaire for any AEO application filed before 1st January 2011.

UK – Increase of the standard VAT rate   

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
Circular # 131 which precise which services are zero rated (with an input VAT deduction) or VAT exempt (with no input VAT deduction). The services concerned are the following:
- Leasing of tangible movable property
- Transportation Services
- Research and development (R&D) and technical services
- IT services
- Cultural and creative services
- Logistics and ancillary services
- Certification and consulting services

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