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VAT Package

If you are involved in providing cross border services, you may be affected by future changes to the place of supply rules under a “VAT package” agreed by the European Commission in December 2007.

Broadly the new rules (to take effect from 2010) will change the place of supply of “business to business” services to the place where the customer is situated. Supplies of services to consumers will continue to be where the supplier is established. However, there will be special rules (“one stop shop”) for telecoms, broadcasting and electronic services to consumers (delayed until 2015).

The package will also introduce a much needed improved system for businesses seeking refunds of VAT paid in other Member States. The EU VAT refund system will become fully electronic from 1 January 2010 thus ensuring a quicker and easier process. This is a very welcome change. For those of you who are familiar with the current paper system, it is extremely burdensome and can take 6 months or more to obtain VAT refunds from other countries. Under the new system, interest will be paid if Member States are late making refunds!

We will keep you informed of the changes as these become available.



Date: 15th February, 2008
Author: Jane Stacey


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