2015 Changes to VAT Rules

Mr. Kenneth Camilleri | 18 Mar 2015

Ccmalta Default

As from January this year, across all types of services, 2015 changes to VAT rules have become applicable. In a specific manner, telecommunications, broadcasting and electronic services supplied to private consumers (ie non-taxable person and / or private individuals) in the EU will also be taxable in the Member State of such consumer. 

Electronic services are typically services supplied in an automated manner which are delivered online or via an electronic network in response to data inputted by the recipient. Whilst at present the provision of e-services is subject to tax at the country where the supplier is located, the 2015 changes to VAT rules will also result in businesses supplying such services to customers in the EU and bound to charge VAT at the rate applicable in the customer’s member state. 

The new VAT rules may affect financial services providers which supply certain online services such as investment platforms and electronic banking. Such financial services providers should seek clarification as to whether their services constitute ‘electronic services’ and develop processes to identify their customers’ location. Specifically these suppliers should ascertain whether the 2015 changes to VAT rules affect them and whether the rate of VAT which applies is that of their customers’ location or whether such services are exempt from VAT in those jurisdictions.

On the 3 April 2014, Explanatory Notes on the 2015 Changes to VAT Rules were issued. The notes are not legally binding, however they are intended to provide practical guidance and information on the application and interpretation of the new place of supply rules, including further guidance on determining the location of the customer and clarification of terms. These explanatory notes have been prepared by the Commission’s Directorate General for Taxation and Customs Union together with the individual Member States and businesses themselves.



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