COM Proposal for VAT Directive 2006/112/EC: Key Changes
Proposed Amendments to Article 138
The European Commission (COM) has proposed significant changes to Directive 2006/112/EC on Value-Added Tax (VAT). One of the key proposed amendments pertains to Article 138, which governs the VAT treatment of intra-Community supplies of goods.
Key Changes
1.
Definition of "taxable person": The proposal clarifies that the taxable person for an intra-Community supply of goods shall be deemed to be the person who effectively dispatches or transports the goods, regardless of their physical location. 2.
Exclusion of certain services: The exclusion for the supply of services under Article 138 has been revised to exclude the supply of services that are ancillary to the transport of goods. This includes services such as loading, unloading, and warehousing. 3.
Clarification of "establishment": The definition of "establishment" in Article 138 has been expanded to include any fixed place of business through which an economic activity is carried out, even if the place of business is not used on a permanent basis. 4.
Obligation to request exemption: Member States may require taxable persons to request an exemption from VAT for intra-Community supplies of goods. This request must be submitted to the relevant tax authority before the supply takes place. 5.
Sanctions for non-compliance: Member States can impose sanctions on taxable persons who fail to request the exemption or provide inaccurate information in their request.
Implications for Businesses
These proposed changes would have several implications for businesses that engage in intra-Community supplies of goods: * Clarification of the VAT liability for such supplies * Potential need to request an exemption from VAT * Increased risk of sanctions for non-compliance * Impact on the efficiency and cost of cross-border trade Businesses should carefully review the proposed amendments to ensure compliance and minimize the potential impact on their operations.
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