VAT 2010: What companies need to know

The VAT changes 2010 mean that the place of supply of B2B EU cross border services will be the location where the “customer” is established rather than where the “supplier” is located. This will be the new basic rule or the general rule. As the supplies will be made principally to a “business” customer in another EU member state companies will need to know the answers to some fundamental questions:

-How will a company know whether their customer is in “business”? What checks should they perform of their client’s business status?

-What happens if the client does not provide evidence that they are in business?

-What should companies do if their client is involved in both business and non-business activities for 2010 VAT changes?

-What VAT treatment should a company adopt if a supply is made to a business customer who uses it wholly for their private use or the private use of their staff?

-The 2010 VAT rules talk about supplies to a “relevant business person”. How is a “relevant business person” defined and should that person always be registered for VAT?

-How should a company determine which office or establishment of its customer is receiving the service if there are many different offices within the same EU country?

-How should “global contracts” be treated in the instance the contractual arrangements are with say the head office but the service is supplied to or received by different business entities often in different jurisdictions?

-Under VAT 2010 rules how should supplies to / from a “virtual office” be treated in the situation where a business has no central office because all functions are performed by remote workers?

-Under VAT 2010 rules should the services of travel agents and hotel booking agents be treated as “land related” or as a supply of “intermediary” services?

-What is the place of supply of the hire of means of transport such as boats and aircraft? Does it matter whether the hire is of a short-term or a long-term nature?

-Under 2010 VAT changes will the place of supply rules for the supply of cultural, artistic, sporting, scientific, educational, entertainment and similar services change? What about the supply of ticketing services and admissions to events such as concerts, gigs, football matches etc?

-What will be the VAT position of ticket booking agents, event organizers and providers of ancillary (to the main event) services under the 2010 VAT rules?

Under the VAT 2010 changes the VAT treatment of the above types of services can be complex and companies will require answers to these fundamental questions. RKG Consulting will be on hand to offer advice to its clients and contacts and to prepare businesses for these changes.