One of the most common areas for queries for VAT information is to do with EC VAT, whether it’s transactions between buyers and sellers in different EC countries, or VAT in other EC countries.
The VAT system is of course common throughout the EC, being based on EC rules as set out in the VAT Directive. However each country has some leeway on applying those rules, such as the VAT registration limit, which special schemes to apply and many have negotiated special derogations which give them certain exceptions to the normal rules. And of course, each country has its own local customs and language, which all adds to the confusion.
There is a lot of information about EC VAT available on line. Here I’ve mentioned the main HMRC notices and also the links to the main VAT sections on the EC commission website.
HMRC Notices
Supplies and movements of goods within the EC: VAT Notice 725; The Single Market http://tinyurl.com/2gfatu explains the rules and procedures for all types of movements of goods within the EC, whether it’s a sale from one EC country to another, triangular transactions or the transfer of your own goods between different EC countries.
Services: VAT Notice 741A: Place of Supply of Services http://tinyurl.com/ye67t2s This explains the rules about the VAT treatment of supplies of services to EC and non-EC customers. The main general rule is that supplies of services to VAT registered business customers in other EC countries are free from UK VAT as the customer accounts for the VAT on his VAT return. However it also gives a detailed explanation of the services that don’t fall within the general rule and where you may have to register for VAT in other EC countries or charge UK VAT.
European Commission website
There is a wealth of information on the EC website about VAT and how it is implemented on a country by country basis. Not exactly the same level of detail as in the above HMRC notices but certainly a useful introduction to each country’s VAT.
This link: http://ec.europa.eu/taxation_customs/taxation/vat/how_vat_works/rates/index_en.htm takes you to the main EC website page which explains in principle how VAT works throughout the EC. It includes, on the left hand menu, a list of the main special schemes that are available throughout the EC and it is a useful introduction to the VAT system.
There is a list of VAT rates applicable throughout the EC in the section http://ec.europa.eu/taxation_customs/resources/documents/taxation/vat/how_vat_works/rates/vat_rates_en.pdf
Another very useful page is http://ec.europa.eu/taxation_customs/taxation/vat/traders/vat_community/index_en.htm which includes country by country details about VAT. Particularly helpful is the section entitled: Vademecum on VAT Obligations which contains a document, provided by each EC country, which provides very specific information on the VAT rules in the country concerned. This includes VAT registration thresholds, which supplies are exempt from VAT, which special schemes the country has adopted. If you’re looking for detailed information on a specific country, this is a useful starting place. There are also links to the main tax authourities in teh country concerned if you need more information.
Finally, here’s the link to the pages about the VIES system : http://ec.europa.eu/taxation_customs/taxation/vat/traders/vat_number/index_en.htm
Textbooks
There aren’t a whole lot of textbooks on EC VAT – primarily because trying to write anything that covers the individual VAT regimes of 27 countries is an absolutely mammoth tax. But there are a couple of useful resources that I’m aware of.
VAT in the EU by Nancy Cruickshanks http://www.lexisnexis.co.uk/store/uk/International-Guide-to-Value-Added-Tax-and-Goods-and-Sales-Tax/product is the only textbook I’m aware of that covers the whole subject. It is a long and detailed book and at £170 is only for those who need regular information on the subject at a detailed level. I haven’t seen the most recent version as it’s still not published but previous versions have been excellent for those who already have a working knowledge of VAT and need detailed information about VAT in other countries.
I am usually able to answer most queries relating to EC VAT issues from Tolleys VAT http://www.lexisnexis.co.uk/store/uk/Tolleys-Value-Added-Tax-Second-edition/product which is updated every year and a great resource for all VAT practitioners. There are 3 excellent sections on EC VAT – in addition to sections on international services and place of supply issues – and although it’s written in VATspeak, there is a load of useful information. Most accountants have this book sitting on their shelves and I’d really recommend finding your way around the sections on EC VAT if you have clients involved in European trade.
Other resources
The other useful resource is the information that is available on the websites of the international accountancy firms. It’s not as detailed as the information available on the EC website or the textbooks, but is a useful starting point for those just wanting to know a bit of general information. Usually the information is included under their respective “Indirect Tax” homepages, just do a bit of digging and you’ll find some helpful links
Please do let me know if you know of any other useful resources that could help others.