Advance VAT rulings temporarily available?
By Toon Hasselman, Limes International B.V.
A trial procedure for an advance VAT ruling for cross-border transactions has been set up between 13 EU countries (Belgium, Cyprus, Estonia, France, Hungary, Latvia Lithuania, Malta, The Netherlands, Portugal, Slovenia, Spain and the United Kingdom) until 31 December 2013. This ruling should be of special interest to companies that engage in complex transactions, where conflicting interpretations between the tax authorities of the EU countries concerned may cause problems, especially in regards to double taxation. The ruling request should be made in the participating EU country where the company is registered for VAT purposes.
The EU Commission's notice on this new initiative states that "Consultations between the competent authorities of the member states concerned will only take place if this is requested explicitly by the applicant." However, another paragraph reads: "On the basis of such a request, the member states concerned will consult each other." How these statements can be reconciled is not made clear, so it seems safer to assume that all relevant authorities will be informed.
At any rate, the advance ruling may sufficiently protect the company in a country where the request is made, but its value in the other EU countries concerned may be limited in practice, as the EU Commission's notice states: "However, this cross-border ruling process does not guarantee that these member states will agree on the VAT treatment of the transactions envisaged."
LIMES International B.V., Noordwijk, the Netherlands
T: +31 71 750 68 00
Toon Hasselman is a VAT specialist who has been working in the field of indirect tax for more than 20 years. Serving clients from national and international companies and having worked in every existing kind of indirect tax branch, he offers pragmatic solutions on a cost-effective basis.
LIMES International B.V. is an independent international tax consultancy firm specialising in cross-border issues. It focuses exclusively on companies and expats that cross borders, providing them with a broad range of integrated solutions in tax and expat, legal, payroll, immigration and relocation, pension and insurance, HR and VAT and customs services.
published: July 2013