Background Note
4.Currently, Council Directive 2006/112/EC (‘the Principal VAT Directive’) requires a taxpayer who makes cross border supplies of goods to submit a recapitulative statement (‘EC Sales List’) which provides information about those supplies.
5.The Principal VAT Directive has been amended by Council Directive 2008/8/EC (the amending directive). The amending directive makes changes to the rules governing the place of supply of services. In addition from 1 January 2010 the recipients of the majority of cross border supplies of services between taxable persons will be required to account for VAT on them under the reverse charge mechanism in accordance with Article 196 of the Principal VAT Directive and a taxpayer who supplies such services will be required to submit an EC Sales List in respect of them.
6.The requirement to submit an EC Sales List is implemented in UK legislation by Part IV of the Value Added Tax Regulations 1995. The power to make those regulations is contained in paragraph 2(3) of Schedule 11 to VATA. That power only applies to supplies of goods. This section extends the application of the power to supplies of services and enables the Commissioners for HM Revenue and Customs to implement the amendments to the EC sales list requirements in the Principal VAT Directive by amending the Value Added Tax Regulations.
Annex 1.
Transposition Note: Council Directive 2008/8/EC
| This Note sets out how section 78 is operative in implementing the amendment to the rules concerning the submission of recapitulative statements (known as EC Sales Lists in the UK). |
| The Directive |
|---|
| Council Directive 2006/112/EC (‘the Principal VAT Directive’) imposes a common system of value added tax applicable in all Member States. Council Directive 2008/8/EC (‘the amending directive’) amends the Principal VAT Directive’s rules governing the place of supply of services and also makes other consequential amendments, in particular to the rules governing a taxable person’s obligations to make a recapitulative statement about that person’s cross-border supplies. |
| Introduction |
| Chapter 6 of the Principal VAT Directive (Articles 262 to 271) requires every VAT registered person making intra community taxable supplies of goods to submit a recapitulative statement about those supplies. This requirement is implemented by Part IV of the Value Added Tax Regulations 1995. Paragraph 2(3) of Schedule 11 to VATA provides the vires for those regulations. Sub-paragraphs 9 and 10 of Article 2 of the amending directive amend Articles 262 and 264(1) of the Principal VAT Directive so that, with effect from 1 January 2010, every VAT registered person will also be required to make a recapitulative statement about intra community supplies of services where those services are subject to a reverse charge in accordance with Article 196 of that Directive. In order to implement the amendments to Articles 262 and 264(1) by amendment to the VAT Regulations the vires in paragraph 2(3) of Schedule 11 to the VATA need to be enhanced so that the power to regulate applies not only to the movement of goods between Member States but also to the supply of services to a person in a Member State other than the United Kingdom where that supply is subject to a reverse charge. Section 78 amends paragraph 2 of the VATA to provide the necessary vires. |
| Articles | Objective | Implementation |
|---|---|---|
| Article 262 | Requires every taxable person to submit a recapitulative statement (EC Sales List) of that person’s taxable cross border supplies of services (which are subject to the reverse charge in accordance with Article 196 of Council Directive 2006/112/EC) and cross-border supplies of goods. | To be implemented by an amendment to Part IV of the Value Added Tax Regulations 1995 using the regulatory powers provided for in Paragraph 2(3) of Schedule 11 to VATA. |
| Article 264(1) | Specifies the information required in the recapitulative statement (EC Sales List) for both taxable cross border supplies of services (which are subject to the reverse charge in accordance with Article 196 of Council Directive 2006/112/EC) in addition to the cross-border supply of goods. | To be implemented by amendment to Part IV of the Value Added Tax Regulations 1995 under the regulatory powers provided for in paragraph 2(3) of Schedule 11 to VATA. |
