Within the framework of the EU VAT Forum (an initiative of the European Commission where businesses and tax authorities strive to improve the way VAT works in practice), 13 member states have agreed to participate in a test scheme whereby VATable persons may request a ruling on the VAT treatment of cross-border transactions (hereafter “Cross-Border VAT Ruling”). The test scheme will run from 1 June 2013 until the end of 2013, and will be followed by an evaluation.
The participating member states are Belgium, Cyprus, Estonia, France, Hungary, Latvia, Lithuania, Malta, the Netherlands, Portugal, Slovenia, Spain and the UK.
Procedure and conditions for submitting a request for a Cross-Border VAT Ruling
Taxable persons who intend to effect cross-border transactions within one or more of the participating member states may request for a Cross-Border VAT Ruling. On the basis of the ruling request, the member states concerned will consult each other on the VAT treatment of a cross-border transaction. The request for a Cross-Border VAT Ruling does not, however, guarantee that the member states concerned will agree on the VAT treatment of a cross-border transaction.
A request for a Cross-Border VAT Ruling can only be submitted if the transaction(s) at hand is(are) (i) complex and (ii) have a cross-border aspect. The ruling request should be submitted to the participating member state where the taxable person is registered for VAT purposes. In case two or more taxable persons are involved in the transaction(s), the request should only be submitted by one of them, also acting on behalf of the other(s).
The ruling request must be in line with the conditions governing national VAT rulings in that member state and should be accompanied by a translation into the official language of the other member state(s) concerned, or by another translation, usually in the English language.
Please note that the taxable person who submits a request for a Cross-Border VAT Ruling must accept that the data provided can be shared with the tax authorities of the member state(s) concerned. Consultations between the competent tax authorities of the member states concerned will only take place if this is requested explicitly by the taxable person. The tax authorities' opinions on the involved transaction(s) will be delivered “as soon as possible” under the procedures applying to national rulings and decisions in the member states concerned.
Although the EU VAT system is in principle harmonised within the EU member states, tax authorities in different member states tend to take different views on the VAT treatment of complex cross-border transactions. This can possibly lead to double- or non-taxation and causes uncertainty among businesses. As we notice that tax authorities in different member states are not always equally flexible to deliver rulings on the VAT treatment of complex transactions, the test scheme is in our view a welcome initiative in order to make VAT rulings more accessible for businesses and to reduce uncertainty among businesses.