Dear clients and cooperation partners,
On 1 January 2015, VAT Law amendments will come into force with regard to VAT on telecommunications, broadcasting and electronically supplied services.
The amendments introduce a change in the principle of determining the place of supply for telecommunications, broadcasting and electronically supplied services to non-taxable persons established in other member states. Under the new procedure, telecommunications, broadcasting and electronically supplied services will be subject to the VAT of the member state where the service recipient has their permanent address or usually resides.
Companies providing telecommunications, broadcasting and electronically supplied services to non-taxable persons in other member states will have to register for a special scheme. Registration is limited to one member state (one of the member states where the service provider is registered as chosen by the company) and EU services should be reported there by applying the respective member-state VAT.
Note: Service providers doing business in the EU outside the member state of consumption must register for the Union scheme. On the other hand, companies that do not do business in the EU but provide the same services to persons not registered for VAT in EU Member States must register for the non-Union scheme.
The SORAINEN Tax & Customs Team will gladly help to timely solve all uncertainties that you might face in relation to these amendments, including the following assistance:
- assess your readiness for the new requirements of the law and offer tailor-made solutions;
- assess the services you offer to determine which ones are subject to the new special schemes;
- find out whether any changes are required in information technologies, databases, accounting, service registration, to determine the customer’s country, as well as to determine what evidence you have to substantiate the customer’s country;
- assist with registration for special schemes;
- clarify the procedure for filing tax returns or input tax deduction; depending on the customer’s location, we are able to assist in all EU Member States – our global network of tax consulting firms, WTS, provides these services in all EU Member States (although it is sufficient to register in only one member state);
- determine whether your service prices need adjusting due to change of the applicable VAT rate and if the cost of services could increase because the applicable VAT rate varies from 3% to 27% in 28 different member states.