VAT News and Tips – N°4 2019
Welcome to our monthly VAT News and Tips summary intended for companies having activities across the 28 Member States. You will find here below updated information and schemes on a country-by-country basis.
EUROPEAN COURT OF JUSTICE - Refund of foreign VAT - Failure to comply with the one-month deadline for replying to a request for additional information
A German company submitted a request for a refund of the French VAT via the electronic portal of the German VAT Authorities. The French authorities then sent a request for additional information to which the company was legally obliged to reply within the one-month deadline. As no reply was received, the tax authorities rejected the company's refund request.
The question is whether or not the legal period of one month is a rule of foreclosure whose non-compliance results in forfeiture of the right to a VAT refund. For the Court of Justice, this is not a time limit for foreclosure. The company still has the possibility to regularise its claim for reimbursement by producing directly before the national court additional information to establish the existence of its right to a VAT refund (02/05/2019, C/133-18, Sea Chefs Cruise Services GmbH).
We encourage European companies that have faced a rejection of their foreign VAT refund application on this basis (in France or elsewhere in Europe) to lodge an appeal in order to challenge the decision to refuse a refund.
DENMARK – Triangular transactions
The Danish conditions related to the triangular simplification scheme will be amended. Under the current rules, the simplification may not be applied if the middleman is registered for VAT in the Member State of destination. As of 1st July 2019, the Danish VAT Law will state that the middleman may not be established (instead of registered) in the Member State of destination, which is now in line with the European VAT Directive.
GREECE – Reduced VAT rate applicable to additional goods and services
Greece has amended its VAT Law and extended the application of the reduced VAT rate (13%) to additional goods, including oils, cocoa, sugar, salt, vinegar and miscellaneous edible preparations. The reduced rate now also applies to catering services in restaurants (alcoholic and non-alcoholic beverages excluded).
The amendment came into force on 20 May 2019.
UK – Reverse charge for supplies of building and construction services
As of 1st October 2019, a new domestic reverse charge mechanism will be applicable to B2B supplies of certain building and construction services in the UK. It will apply through the supply chain up to the point where the customer receiving the supply is no longer a business that makes an onward supply of the same construction services.
The reverse charge will exclude businesses that supply such services to connected parties within a corporate group structure or with a common interest in land (e.g. landlord and tenant). In these circumstances, VAT will have to be charged in accordance to the usual rules.
If you wish to discuss any of the above topics, please do not hesitate to contact us freely.