24 June 2014 Indirect Tax Alert VAT no. 524 Audit guidelines Mini One-Stop Shop for telecom, broadcasting and electronic services
Audit guidelines Mini One-Stop Shop for telecom, broadcasting and electronic services As of 1 January 2015 the supplies of telecoms/broadcasting/electronic services will be taxed in the country where the customer is established, i.e. VAT is due in the Member State of Consumption. When a business supplies the services mentioned to customers in all of the EU, it means that the supplier has to register in all 28 member states. However the supplier can designate one European member state (Member State of Identification) to be their single contact point for VAT identification, submitting VAT returns and paying the VAT due in all of the member states. This principle is also called the Mini One-Stop Shop. Registration for the Mini One-Stop Shop will be available as of October 1 st 2014. Additional audit guidelines for the Mini One-Stop Shop In relation to the Mini One-Stop Shop guidelines (published 23 October 2013) the European Commission made additional guidelines concerning standard audits and control activities. These guidelines concentrate on the following two subjects: 1. How national tax authorities can best contact businesses as part of an audit. 2. The method businesses should use to provide the information required by an audit. In total there are four guidelines. Please note that these guidelines are not binding regulations and are recommendations only. Hereafter follows a short description of the four guidelines divided by the subjects as mentioned before. Guidelines on how national tax authorities can best contact businesses as part of an audit. a. National tax authorities of the Member States of Consumption should initially contact businesses via the national tax authority of the designated Member State of Identification. However, in some circumstances direct contact between Member State of Consumption and the business could be necessary. b. The tax authority of the Member State of Identification should use their normal national procedures when contacting businesses that are registered for the EU scheme. Businesses that are registered for the non-eu scheme should initially be contacted via e-mail by the Member State of Identification. c. When a Member State of Consumption contacts a business (both EU and non EU), this contact should be initiated via e-mail. The method businesses should use to provide the information required by an audit. d. Member States should consult the business in order to agree what method can best be used for exchanging information. The tax authority should accept a standard audit file for the Mini One-Stop Shop (SAF-MOSS) in XML format if a business chooses to use such a file to supply the requested information. The SAF MOSS will be made available in due course. 2
In the scheme below we have set out which of the Member States agreed to follow the guidelines and which of the Member States did not agree to follow these guidelines. a. Member state of Consumption contacts business via national tax authority of Member State of Identification. b. Member State of Identification uses national procedures (EU scheme) or e- mail (non-eu scheme) for contacting a business. c. Member State of Consumption uses e-mail for contacting businesses (both EU and non-eu). d. Member State accepts SAF- MOSS in XML or consults business on how to exchange information Austria X X X Belgium Bulgaria Croatia Cyprus X X X X Czech Republic X Denmark Estonia Finland X X France X X X X Germany X X Greece X X X X Hungary X Ireland Italy X X X X Latvia X Lithuania X Luxembourg Malta X Netherlands Poland Portugal Romania X X Slovenia Slovakia X Spain Sweden United Kingdom 3
We see that Europe s biggest market Germany only agrees to apply guidelines b and c and that substantial markets France and Italy do not agree to apply any of the audit guidelines. Member States who do not apply (all) the audit guidelines cannot provide (full) certainty in the way of auditing the VAT 2015 rules and what businesses can expect at this moment. We recommend to closely follow the development on this subject and take it into consideration when implementing VAT 2015. For more details, we refer to our subject matter experts on this issue. 4
The above is based on our interpretation of current tax legislation and case law published to date. This Indirect Tax Alert provides general information with no pretence of completeness, and it is not a tax advice. Information For more detailed information about the matters discussed in this Alert, please contact one of EY s tax advisers listed below. EY Ernst & Young Belastingadviseurs LLP Ernst & Young Belastingadviseurs LLP is a limited liability partnership registered in England and Wales with registered number OC335596. Ernst & Young Belastingadviseurs LLP has its registered office at 1 Lambeth Palace Road, London SE1 7EU, United Kingdom, its principal place of business at Boompjes 258, 3011 XZ Rotterdam, the Netherlands and is registered with the Chamber of Commerce Rotterdam number 24432939. Indirect Tax Walter de Wit Tel: +31 (0)88 407 1390 Email: walter.de.wit@nl.ey.com Gijsbert Bulk Tel: +31 (0)88 407 1175 Email: gijsbert.bulk@nl.ey.com Duy Nguyen Tel: +31 (0)88 407 2032s Email: duy.nguyen@nl.ey.com Niels Mulder Tel: +31 (0)88 407 2304 Email: niels.mulder@nl.ey.com Roxanne Wijkstra Tel: +31 (0)88 407 2108 Email: roxanne.wijkstra@nl.ey.com www.ey.nl Ernst & Young 2013 This publication contains information in summary form and is therefore intended for general guidance only. It is not intended to be a substitute for detailed research or the exercise of professional judgment. Neither EYGM Limited nor any other member of the global Ernst & Young organization can accept any responsibility for loss occasioned to any person acting or refraining from action as a result of any material in this publication. On any specific matter, reference should be made to the appropriate advisor. 5