VAT Newsletter November/2013

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The European Court of Justice (“ECJ”) has ruled on the joined cases C-249/12 (Tulica) and C-250/12 (Plavosin)

The dispute in these cases refers to the establishment of the VAT taxable base when the agreement concluded between the parties makes no reference as regards the VAT.

Mrs. Corina-Hrisi Tulica (“Mrs. Tulica”) and Mr. Calin Ion Plavosin (“Mr. Plavosin”) have concluded various agreements for the sale of immovable goods during 2007-2009, without making any specific VAT references in relation to the contractual price.

Further to the tax inspection performed, the tax authorities considered that Mrs Tulica and Mr. Plavosin performed economic activities, and, as such they were deemed as taxable persons, being registered for VAT purposes. Moreover, the tax authorities imposed the payment of the VAT related to the supplies of immovable goods, added to the selling price agreed as per the agreement.

Mrs. Tulica and Mr. Plavosin challenged the tax authorities’ decision, arguing that their interpretation is against, amongst others, the VAT neutrality principle, as this tax cannot be recovered and, as such, will not be borne by the final consumers.

The ECJ concluded that the provisions of Council Directive 2006/112/EC must be interpreted as meaning that, when the price of a good has been established by the parties without any reference to VAT and the supplier of that good is the taxable person for the VAT due on the taxable transaction, in a case where the supplier is not able to recover from the purchaser the VAT claimed by the tax authorities, the price agreed must be regarded as already including the VAT.

Council Implementing Regulations (EU) no. 1042/2013 amending Implementing Regulations (EU) no. 282/2011 as regards the place of supply of services has been published in the EU Official Journal no. L 284/26.10.2013

Council Implementing Regulations (EU) no. 1042/2013 (the “Regulation”) brings certain clarifications on the provisions of Directive 112/2006/CE as regards the place of the supply of services such as:

  • The list of telecommunications, radio and television services;
  • The means of identifying the supplier, in case of services supplied electronically through a telecommunications network, or a web interface;
  • Clarifications regarding the place where a non-taxable legal person is considered to be established as to determine the place of taxation of the services regarding the rental of transportation means, as well as telecommunications services, broadcasting services and electronically supplied services;
  • The definition of “immovable property”;
  • Clarifications regarding the services that qualify as services related to immovable property;
  • Transitional provisions regarding the place of taxation of telecommunications, broadcasting and electronic services rendered by a supplier established within the Community to a non-taxable person that is established, has a permanent address or its usual residence in the Community, in light of changes which enter into force starting January 2015

The Regulation is mandatory and directly applicable in all Member States starting 1 January 2015, except for certain articles specifically provided to be applicable as of 1 January 2017.

Regulation (EU) No 1093/2013 amending Regulation (EC) No 638/2004 of the European Parliament and of the Council and Commission Regulation (EC) No 1982/2004 as regards the simplification within the Intrastat system and the collection of Intrastat information was published in Official Journal L 294/28, 2013

The Regulation envisages simplifying the data collection system for the Intrastat, by offering to the Member States the possibility of changing the threshold established for arrivals, aiming to decrease the number of persons liable to provide Intrastat data.

The Regulation enters into force starting with the twentieth day following that of its publication in the EU Official Journal, being directly applicable to all Member States.

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