Financial Services VAT Alert - Archive 2011

Issues in the Winter Edition 2011/09

  • European Union
    Question to ECJ on 8th Directive claim time limits (ECJ Elsacom, case C-294/11)
    Mismatch of time limits may breach EU law principles (ECJ Banca Antoniana Popolare Veneta SpA, case C-427/10)>
    - Commission issues explanatory notes on new Invoicing Directive       
    - EC Paper on the future of VAT
    - Questions to ECJ on 'use' based pro-rata deduction (Portugal Telecom, case C-496/11)
  • Germany
    - Exclusion of input VAT deduction for “exempt” out of country supplies
    - Customer canvassing is a supply of services
    - Currency exchange service VAT exempt
    - Amended VAT e-invoicing rules now applicable
    - Discounted interest as sales promotion for the automotive industry
  • Italy
    Supreme Court ruled about the formal requirements to deduct input VAT
    - Tax authorities clarified the treatment of VAT credits
  • The Netherlands
    - The Dutch Supreme Court has ruled that the provision of loans is a taxable activity
    - Real estate funds can be qualified as special investment fund
    - Questions to ECJ on sale of minority holding
  • United Kingdom
    - Hire purchase pro-rata method must include goods value
    - Tribunal decision on agent paid to discharge a finance liability: Canotec Ltd [2011] UKFTT 661 (TC)  - VAT on termination charge is deductible

Issues in Edition 2011/07-08

  • European Union
    - ECJ rules that the puchase of nonperforming loans is outside the scope of VAT: GFKL (C-93/10)
    - Commission supports VAT deduction for costs invoiced to individual partners (C-280/10)
    - ECJ rules SWIFT messaging services liable to VAT: Nordea Pankki Suomi Oyj (C-350/10)
    - EU Commission refers Denmark to the ECJ for allowing non-taxable persons to join VAT groups (C-95/11)
    - Input VAT recovery ratio – Towards a worldwide “pro-rata”? (C-388/11)
    - Preliminary questions referred to the ECJ in pension fund management case (C-424/11)
    - Preliminary question to the ECJ regarding the meaning of tax evasion and the concept of “absence of actual supply” (C-285/11)
    - Preliminary questions on the application of the open market value on supplies between connected parties (C-298/11)
    - Taxation of the financial sector
    - Commission proposes Financial Transaction Tax (FTT)
  • Denmark
    - National Tax Tribunal refused input VAT recovery on consultancy costs related to the sale of all shares in a 100 % owned subsidiary
    - Binding ruling in relation to VAT exemption on "sub intermediation"
  • Germany
    - Clarification of place of supply of services to consumers
    - VAT Implementation Decree amended following the Swiss Re ruling
  • Greece: VAT amnesty until 30 September 2011
  • Italy
    - Tax assessment period doubled in case of criminal offences – Compliance with the Italian Constitution
    - Automatic cancellation of VAT number when no business activities for 3 years
    - Clarification issued by the Italian Tax Authorities - Reverse charge mechanism and obligation to self invoice in case of exempt supply
  • Luxembourg: Luxembourg VAT suspension regime - Law proposal voted on 14th July 2011
  • The Netherlands
    - Ruling on the qualification of services for mortgage providers – Article 135(1)(d) of the VAT Directive
    - Court of Arnhem rules on actual use method to determine the proportional deduction – Article 173 of the VAT Directive
  • United Kingdom
    - VAT and temporary workers - Decision in the Reed Employment case
    - Tax authority successful in deal costs VAT appeal
    - Some news from HMRC and the Ministry of Finance

Issues in Edition 2011/06

  • European Union
    - FS Proposal Directive & Regulation progress report
    - Recast implementing regulation takes effect on 1 July 2011
    - Commission proposes two new 'own resources' - a financial transaction tax and a modernised VAT
  • Denmark:
    - Decision from the National Tax Tribunal on input VAT recovery regarding the on-charge of fuel costs
    - Binding ruling from the National Tax Board: Recharge of insurance fees by leasing companies regarded as a separate VAT exempt insurance supply
  • Germany:
    - Lower Tax Court of Rhineland Palatinate denies VAT exemption for investment-fund-related intermediary services where the claimant uses sub agents
    - German Supreme Tax Court refers question to the Court of Justice of the European Union (“ECJ”) regarding the VAT exemption of financial advisory services rendered to investment companies
    - Sale of 99% shareholding is not a transfer of a going concern
  • Italy: Hearing of the ECJ - Reimbursement and time limits where VAT has been paid by mistake (c-427/10 Banca Antoniana Popolare Veneta S.p.A. “BAPV” v Italian Ministry of Finance)

Issues in Edition 2011/05

  • European Union
    - While Member States present at the hearing consider SWIFT services as VAT taxable, the EU Commission abstained from commenting
    - Commission considers distressed debt sale taxable supply
    - Preliminary question on the VAT treatment of sale of shares in real estate company
    - EU Commission refers Czech Republic to the ECJ for allowing non-taxable persons to join VAT groups
    - Referral to the ECJ on national restrictions regarding the taxable amount in case of transactions between related parties
    - Referral to the ECJ on national restriction of input VAT recovery for supplies used for free of charge transactions or for activities other than the economic activity of the taxable person
  • Germany: Decision of the German Supreme Tax Court on the VAT treatment of fees paid to general partners of closed-end funds
  • Luxembourg: Draft law on VAT warehouse regimes – could be of benefit for funds investing in artwork, wine, precious metals, etc.
  • The Netherlands:
    Court decision about Article 135 (1)(b) VAT Directive – negotiation of credits
    - Court decision about Article 135 (1)(f) VAT Directive – negotiation of securities
  • Sweden: Real estate brokers’ services are VAT exempt if property is sold via a corporation

Issues in Edition 2011/04

  • European Union
    EU Commission refers Ireland, the Netherlands and the UK to the ECJ for allowing non-taxable persons to join VAT groups;
    - Directive & Regulation on the VAT treatment of insurance and financial service removed from the agenda of the ECOFIN of 17th May
  • Germany: Exemption from VAT for cost sharing arrangements
  • Italy: VAT recovery ration calculation - Tax Authorities' guidelines
  • Luxembourg
    - VAT authorities confirm status of contractual funds regarding the reporting and payment of VAT
    - VAT Breakfast session: the AM industry
  • United Kingdom
    - Partial exemption for insurers: joint publication by HMRC and Association of British Insurers
    - Tax authority guidance on new prorata rules for capital items

Issues in Edition 2011/03

  • European Union: CJEU: Skandinaviska Enskilda Banken; Implementing Measures for EU VAT System; Political agreement on the proposal for a Directive & Regulation on the VAT treatment of insurance and financial service seems close
  • Czech Republic: The recent and proposed changes in Czech VAT Act
  • Denmark: Huge VAT claims towards the Danish Tax Authorities in relation to so-called ‘meeting’ VAT
  • Finland: Finnish Administrative Court: VAT exemption on factoring considered not in line with the Directive
  • Germany: Tax Supreme Court – Input VAT resulting from advisory services connected with sale of shares is not recoverable; Lower Tax Court of Nuremberg - Decision on the VAT exemption of financial advisory services rendered to investment companies
  • Poland: Supreme Administrative Court: to apply for a preliminary ruling to determine the legitimacy of including the value of insurance to the tax base of lease services

Issues in Edition 2011/02

  • Bulgaria: Supreme Administrative Court decides on the VAT treatment of the management of special investment purpose joint-stock companies (SIPJS companies)
  • Denmark: New tax authority guidelines on partial VAT registration; High Court decision on factoring
  • Finland: Administrative Court: VAT exemption for factoring not in line with the EU VAT Directive
  • Germany: Supreme Tax Court: Questions referred to the ECJ regarding the VAT treatment of portfolio management services
  • Luxembourg: Tribunal d’arrondissement: VAT treatment of insurance costs recharged by leasing companies
  • United Kingdom: UK to refer questions to the ECJ on VAT exemption for pension fund management services

Issues in Edition 2011/01

  • Austria: ‘Bank levy’ and ‘Bank levy for derivatives’
  • Germany: Federal Ministry of Finance circular regarding promise of guarantee by car salesman
  • Hungary: Special tax on financial organizations – update for 2011
  • Luxembourg: Luxembourg is the first country to implement the UCITS IV Directive
  • Poland: Financial services – new definition; Increase of VAT rates; Recharge of insurance fees by leasing companies
  • Sweden: Guidance from the Swedish Tax Agency concerning the VAT treatment of the transfer of a going concern in case of a transfer of a mixed business
  • United Kingdom: Revised guidance from HMRC on the Capital Goods Scheme (“CGS”) and withdrawal of the ‘Lennartz Principle’