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Weekly VAT News - 04/09/2017

CJEU judgments on cost sharing exemption
On 21 September 2017, the CJEU will be publishing its judgments in three key cases concerning the applicability of the cost sharing exemption (CSE): DNB Banka, Aviva, and EC v Germany. Under the CSE, a cost sharing group (CSG), established by organisations that cannot recover VAT, is able to exempt supplies it makes to its members. The Advocate General’s opinions in DNB Banka and Aviva were, inter alia, that the CSE operated as an extension to the public interest exemptions in the Principal VAT Directive, and could not be extended to financial services organisations. (The Advocate General was also of the view that the CSE should not apply to CSGs that span different jurisdictions; therefore, the CSE would not be available for cross-border CSGs.) The Advocate General in EC v Germany took a different approach, namely that the CSE should be available to all exempt taxpayers, regardless of the sector from which the taxpayer generates its income. The decisions of the CJEU in these cases should clarify the scope of the EU law exemption for supplies by CSGs. For further information about the cases, or to discuss the implications of them, please contact Richard Insole on 020 7303 0062. On 25 September at 12.00 BST, there will be a Deloitte webcast to discuss the judgments and their implications. For more information and to register for the webcast, click here.

VAT in the GCC – update
Among the six Member States of the Gulf Cooperation Council (GCC), United Arab Emirates (UAE) and Saudi Arabia (KSA) continue to lead the way towards the GCC-wide implementation of VAT, scheduled for 1 January 2018, with recent developments in both countries. The UAE VAT law came in on 27 August 2017. The KSA published its final VAT law on 27 July 2017 and the final VAT implementing regulations on 29 August 2017. UAE and KSA will both be implementing VAT on the scheduled date of 1 January 2018, and VAT will apply to imports and local supplies of goods and services at the standard rate of 5%, with zero-rating and exemptions for certain supplies. In the UAE, businesses that meet the registration requirements will be able to register for VAT purposes through the Federal Tax Authority website from the middle of September. In the KSA, the electronic filing system (ERAD) will soon be available to businesses to file their registration applications. The UAE also published its excise tax law on 21 August 2017, under which excise taxes will apply in the UAE from 1 October 2017 on the production and import of certain goods. For more information about VAT and excise duties in the GCC, please contact Anbreen Khan on 020 7007 0688.

The Netherlands: Reverse charge for telecommunications services
Taxable persons in the Netherlands were able to apply a voluntary VAT reverse charge to B2B supplies of telecommunications services in the Netherlands from 2 June 2017. It has been announced that the optional reverse charge will be mandatory from 1 September 2017. For more information about the reverse charge, please contact Abi Briggs on 020 7303 2889.

Remote Gaming Duty on freeplays
Remote gaming providers must pay Remote Gaming Duty (RGD) on freeplays offered to customers for accounting periods starting after 31 July 2017. Freeplays are offers to gamble at a reduced or no cost, and must now be included in RGD calculations. HMRC have issued high level guidance on how to calculate Remote Gaming Duty on freeplays. For further information about the guidance, or RGD generally, please contact Barney Horn on 0121 695 5902.

EU ‘Taxation Trends’ report
The 2017 edition of ‘Taxation Trends in the European Union’ shows that the average standard VAT rate in the EU remained at 21.5% in 2017, the same as in 2016, ending the upward trend in rates that has been evident since 2000, and especially in the period from 2008. The highest standard VAT rate applies in Hungary (27%), the lowest in Luxembourg (17%) and Malta (18%).

This publication has been written in general terms and we recommend that you obtain professional advice before acting or refraining from action on any of the contents of this publication. Deloitte LLP accepts no liability for any loss occasioned to any person acting or refraining from action as a result of any material in this publication.

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