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
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
v Germanytook 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
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
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. TheKSA 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
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
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
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
0121 695 5902.
EU ‘Taxation Trends’
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%).
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