TEI comments on changes to EU VAT place of supply rules.

PositionTax Executives Institute, value-added tax

On June 5, TEI submitted a letter to the European Commission recommending areas where additional guidance would help businesses and tax authorities implement recent amendments to Implementing Regulation (EU) No 282/2011. The new rules for determining the place of supply for VAT purposes within the EU for sales of services connected with immovable property will take effect on January 1, 2017. The letter was prepared under the aegis of TEI's European Indirect Tax Committee, whose chair is Jean-Francois Turgeon of Caterpillar SARL. Materially contributing to the development of TEI's comments were Karl-Heinz Haydl and Mark Hammond Giles, both of General Electric Company. Daniel B. De Jong, TEI Tax Counsel, coordinated the preparation of TEI's letter.

In 2013, the European Council reached political agreement on amendments to Implementing Regulation (EU) No 282/2011 (the "Implementing Regulation") clarifying existing rules for determining the place of supply of services for VAT purposes in the European Union. The provisions addressing services connected with immovable property located in the EU will take effect on 1 January 2017. To assist both businesses and tax administrations in developing a uniform application of these rules, the Commission plans to draft explanatory notes to the Implementing Regulation with input from relevant stakeholders including Member States and businesses ("Explanatory Notes").

Tax Executives Institute ("TEI") applauds the Commission for soliciting comments from business prior to drafting the Explanatory Notes and is pleased to actively support this initiative. Stakeholder involvement early in the process should allow the issuance of guidance well in advance of the 1 January 2017 effective date that will address key issues where further clarification is most needed. We agree with the statement in the Commission's 1 April 2014 request for input from business that it is important to focus on the practical implications of the new rules and to set out clearly how they should be applied in practice.

TEI was founded in 1944 to serve the professional needs of in-house tax professionals. In 1999, TEI chartered a chapter in Europe, which encompasses a cross-section of European and multinational companies. Today the organisation has 55 chapters throughout the world. As the preeminent international association of business tax professionals, TEI has a significant interest in promoting sound tax policy, as well as in the fair and efficient administration of the tax laws, at all levels of government. Our nearly 7,000 members represent over 3,000 of the largest companies in Europe, the United States, Canada, and Asia.

TEI members are accountants, lawyers and other corporate and business employees responsible for the tax affairs of their employers in an executive, administrative, or managerial capacity. The Institute espouses organisational values and goals that include integrity, effectiveness and efficiency, and dedication to improving...

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