All change on VAT

Simpler VAT invoicing for all

 

In an attempt to remove uncertainty and cut red tape for all EU businesses, an EC Directive adopted in 2010 means that all Member States have had to simplify their VAT invoicing from 1 January 2013. While many of the Directive’s requirements have already been adopted in the UK, new regulation from this month could have real benefits for any company trading abroad.

In a move to encourage greater uptake of electronic invoicing, for example, these must now be treated on exactly the same basis as paper invoices, with individual Member States no longer allowed to set their own pre-conditions (e.g., inclusion of electronic signatures) over their use. And whereas a company making certain supplies (‘exempt supplies’, ‘margin scheme supplies’, ‘reverse charge supplies’ and ‘self-billed supplies’) would previously have been required to include a full technical reference to the UK or EU legislation allowing such treatment, an invoice now only has to include a simple ‘plain English’ explanation of the relevant concession, with a brief reference to the law (or other grounds) on which such a claim is made.

UK businesses need to be aware though that stricter time limits have now been introduced for issuing VAT invoices for EU cross-border supplies. All EU Member States are now required to issue these no later than the 15th day of the month following that in which the supply is made – a significant reduction on the 30-day window previously allowed in the UK.

Further information on VAT changes introduced under Directive 2010/45/EU is available here: http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageLibrary_ConsultationDocuments&propertyType=document&columns=1&id=HMCE_PROD1_032093

VAT relief on freight transport services performed wholly outside the EU

The UK’s temporary amendment to the VAT treatment of freight transport services has now been implemented under UK law. The original amendment, adopted in 2010 in response to changes to the ‘place of supply’ rules, sought to prevent freight services conducted wholly outside of the EU from being subject to UK VAT. This has now been adopted with effect from 20 December 2012.

Sectors: Legal Services and Logistics
Countries: Europe
Topics: Finance, Freight Forwarding, and Taxation
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