Nieuwe ontwerp-richtlijn voor BTW op diensten aan consumenten (en)
The European Commission has presented a proposal to change the Value Added Tax (VAT) rules that apply when certain services are supplied to private consumers. The changes are intended to eliminate distortions of competition between EU businesses, and between EU and non-EU businesses, that supply services at a distance to private consumers. They should also ease the VAT burden for businesses by streamlining the current rules as between services provided to traders and those provided to private consumers. The changes would build on the amendments that the Commission proposed in December 2003 to the rules governing the supply of services where the customer is a trader (see IP/03/1808).
"The economic potential of telecom services, broadcasting, and e-services makes it imperative to ensure that the VAT revenues from such services accrue to the Member State where those services are consumed" commented László Kovács i, European Commissioner for Taxation. "This proposal is designed both to ensure that Member States are better able to collect VAT on services consumed by their residents and to make the application of VAT to services simpler and fairer for traders."
The current main rule is that, when a trader supplies a service to a private consumer, the trader is responsible for applying the VAT at the rate of the country where he has his place of establishment. However, with the increasing supply of services across borders, this rule no longer always ensures that the tax accrues to the Member State of consumption. It can also cause problems of distortions of competition. Companies have an incentive to locate their activities in Member States with low VAT rates in order to be able to charge that rate to their customers. Suppliers of digital products from outside the EU are required to charge VAT on sales to private consumers at the rate applicable in the Member State where the customer is resident (see IP/02/673) but this rule does not currently apply where the non-EU suppliers establish themselves within the EU. Nor does it apply to EU or non-EU suppliers of other services capable of being supplied at a distance (such as distance teaching).
In addition, since, on the basis of a Commission proposal, the Council has almost reached agreement on changes to the rules governing the supply of services where the customer is a trader, there would be practical difficulties for businesses if there were no corresponding changes to the rules governing the place of supply of services to private consumers.
The proposal would for these reasons introduce the following exceptions to the main rule on the place of taxation of services to private consumers:
- For certain services capable of being supplied at a distance, including e-services and distance teaching, the place of taxation would become the place where the customer is established.
- Restaurant and catering services would become taxable at the place where the service is physically carried out, except for those services supplied on board of a means of transport, which would be taxable at the place of departure of the transport service.
- The short term hiring of means of transport would become taxable at the place where the means of transport is actually put at the disposal of the customer.
- Long term leasing would become taxable at the place where the customer is established.
- All services rendered by intermediaries would become taxable at the place where the main transaction in which they intervene takes place.
The proposed changes would mean that traders supplying these services to private customers in other Member States would have VAT compliance obligations in those other Member States. However, these obligations would be greatly simplified if the Council adopts the Commission's proposal of 29 October 2004 for a One-Stop-Shop and other measures to simplify VAT obligations (see IP/04/1331 and MEMO/04/249).
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