Council Directive 2008/8/ECShow full title

Article 2 U.K.

From 1 January 2010, Directive 2006/112/EC is hereby amended as follows:

1.

Chapter 3 of Title V shall be replaced by the following:

‘CHAPTER 3 U.K. Place of supply of services

Section 1 U.K. Definitions

Article 43

For the purpose of applying the rules concerning the place of supply of services:

1.

a taxable person who also carries out activities or transactions that are not considered to be taxable supplies of goods or services in accordance with Article 2(1) shall be regarded as a taxable person in respect of all services rendered to him;

2.

a non-taxable legal person who is identified for VAT purposes shall be regarded as a taxable person.

Section 2 U.K. General rules

Article 44

The place of supply of services to a taxable person acting as such shall be the place where that person has established his business. However, if those services are provided to a fixed establishment of the taxable person located in a place other than the place where he has established his business, the place of supply of those services shall be the place where that fixed establishment is located. In the absence of such place of establishment or fixed establishment, the place of supply of services shall be the place where the taxable person who receives such services has his permanent address or usually resides.

Article 45

The place of supply of services to a non-taxable person shall be the place where the supplier has established his business. However, if those services are provided from a fixed establishment of the supplier located in a place other than the place where he has established his business, the place of supply of those services shall be the place where that fixed establishment is located. In the absence of such place of establishment or fixed establishment, the place of supply of services shall be the place where the supplier has his permanent address or usually resides.

Section 3 U.K. Particular provisions

Subsection 1 U.K. Supply of services by intermediaries

Article 46

The place of supply of services rendered to a non-taxable person by an intermediary acting in the name and on behalf of another person shall be the place where the underlying transaction is supplied in accordance with this Directive.

Subsection 2 U.K. Supply of services connected with immovable property

Article 47

The place of supply of services connected with immovable property, including the services of experts and estate agents, the provision of accommodation in the hotel sector or in sectors with a similar function, such as holiday camps or sites developed for use as camping sites, the granting of rights to use immovable property and services for the preparation and coordination of construction work, such as the services of architects and of firms providing on-site supervision, shall be the place where the immovable property is located.

Subsection 3 U.K. Supply of transport

Article 48

The place of supply of passenger transport shall be the place where the transport takes place, proportionate to the distances covered.

Article 49

The place of supply of the transport of goods, other than the intra-Community transport of goods, to non-taxable persons shall be the place where the transport takes place, proportionate to the distances covered.

Article 50

The place of supply of the intra-Community transport of goods to non-taxable persons shall be the place of departure.

Article 51

“Intra-Community transport of goods” shall mean any transport of goods in respect of which the place of departure and the place of arrival are situated within the territories of two different Member States.

“Place of departure” shall mean the place where transport of the goods actually begins, irrespective of distances covered in order to reach the place where the goods are located and “place of arrival” shall mean the place where transport of the goods actually ends.

Article 52

Member States need not apply VAT to that part of the intra-Community transport of goods to non-taxable persons taking place over waters which do not form part of the territory of the Community.

Subsection 4 U.K. Supply of cultural, artistic, sporting, scientific, educational, entertainment and similar services, ancillary transport services and valuations of and work on movable property

Article 53

The place of supply of services and ancillary services relating to cultural, artistic, sporting, scientific, educational, entertainment or similar activities, such as fairs and exhibitions, including the supply of services of the organisers of such activities, shall be the place where those activities are physically carried out.

Article 54

The place of supply of the following services to non-taxable persons shall be the place where the services are physically carried out:

(a)

ancillary transport activities such as loading, unloading, handling and similar activities;

(b)

valuations of and work on movable tangible property.

Subsection 5 U.K. Supply of restaurant and catering services

Article 55

The place of supply of restaurant and catering services other than those physically carried out on board ships, aircraft or trains during the section of a passenger transport operation effected within the Community, shall be the place where the services are physically carried out.

Subsection 6 U.K. Hiring of means of transport

Article 56

1. The place of short-term hiring of a means of transport shall be the place where the means of transport is actually put at the disposal of the customer.

2. For the purposes of paragraph 1, “short-term” shall mean the continuous possession or use of the means of transport throughout a period of not more than thirty days and, in the case of vessels, not more than ninety days.

Subsection 7 U.K. Supply of restaurant and catering services for consumption on board ships, aircraft or trains

Article 57

1. The place of supply of restaurant and catering services which are physically carried out on board ships, aircraft or trains during the section of a passenger transport operation effected within the Community, shall be at the point of departure of the passenger transport operation.

2. For the purposes of paragraph 1, “section of a passenger transport operation effected within the Community” shall mean the section of the operation effected, without a stopover outside the Community, between the point of departure and the point of arrival of the passenger transport operation.

“Point of departure of a passenger transport operation” shall mean the first scheduled point of passenger embarkation within the Community, where applicable after a stopover outside the Community.

“Point of arrival of a passenger transport operation” shall mean the last scheduled point of disembarkation within the Community of passengers who embarked in the Community, where applicable before a stopover outside the Community.

In the case of a return trip, the return leg shall be regarded as a separate transport operation.

Subsection 8 U.K. Supply of electronic services to non-taxable persons

Article 58

The place of supply of electronically supplied services, in particular those referred to in Annex II, when supplied to non-taxable persons who are established in a Member State, or who have their permanent address or usually reside in a Member State, by a taxable person who has established his business outside the Community or has a fixed establishment there from which the service is supplied, or who, in the absence of such a place of business or fixed establishment, has his permanent address or usually resides outside the Community, shall be the place where the non-taxable person is established, or where he has his permanent address or usually resides.

Where the supplier of a service and the customer communicate via electronic mail, that shall not of itself mean that the service supplied is an electronically supplied service.

Subsection 9 U.K. Supply of services to non-taxable persons outside the Community

Article 59

The place of supply of the following services to a non-taxable person who is established or has his permanent address or usually resides outside the Community, shall be the place where that person is established, has his permanent address or usually resides:

(a)

transfers and assignments of copyrights, patents, licences, trade marks and similar rights;

(b)

advertising services;

(c)

the services of consultants, engineers, consultancy firms, lawyers, accountants and other similar services, as well as data processing and the provision of information;

(d)

obligations to refrain from pursuing or exercising, in whole or in part, a business activity or a right referred to in this Article;

(e)

banking, financial and insurance transactions including reinsurance, with the exception of the hire of safes;

(f)

the supply of staff;

(g)

the hiring out of movable tangible property, with the exception of all means of transport;

(h)

the provision of access to, and of transport or transmission through, natural gas and electricity distribution systems and the provision of other services directly linked thereto;

(i)

telecommunications services;

(j)

radio and television broadcasting services;

(k)

electronically supplied services, in particular those referred to in Annex II.

Where the supplier of a service and the customer communicate via electronic mail, that shall not of itself mean that the service supplied is an electronically supplied service.

Subsection 10 U.K. Prevention of double taxation or non-taxation

Article 59a

In order to prevent double taxation, non-taxation or distortion of competition, Member States may, with regard to services the place of supply of which is governed by Articles 44, 45, 56 and 59:

(a)

consider the place of supply of any or all of those services, if situated within their territory, as being situated outside the Community if the effective use and enjoyment of the services takes place outside the Community;

(b)

consider the place of supply of any or all of those services, if situated outside the Community, as being situated within their territory if the effective use and enjoyment of the services takes place within their territory.

However, this provision shall not apply to the electronically supplied services where those services are rendered to non-taxable persons not established within the Community.

Article 59b

Member States shall apply Article 59a(b) to telecommunications services and radio and television broadcasting services, as referred to in point (j) of the first paragraph of Article 59, supplied to non-taxable persons who are established in a Member State, or who have their permanent address or usually reside in a Member State, by a taxable person who has established his business outside the Community or has a fixed establishment there from which the services are supplied, or who, in the absence of such a place of business or fixed establishment, has his permanent address or usually resides outside the Community.’;

2.

in Article 98(2), the second subparagraph shall be replaced by the following:

‘The reduced rates shall not apply to electronically supplied services.’;

3.

the introductory sentence of Article 170 shall be replaced by the following:

‘All taxable persons who, within the meaning of Article 1 of Directive 86/560/EEC(1), Article 2(1) and Article 3 of Directive 2008/9/EC(2) and Article 171 of this Directive, are not established in the Member State in which they purchase goods and services or import goods subject to VAT shall be entitled to obtain a refund of that VAT insofar as the goods and services are used for the purposes of the following:’;

4.

Article 171 shall be amended as follows:

(a)

paragraph 1 shall be replaced by the following:

‘1. VAT shall be refunded to taxable persons who are not established in the Member State in which they purchase goods and services or import goods subject to VAT but who are established in another Member State, in accordance with the detailed rules laid down in Directive 2008/9/EC.’;

(b)

paragraph 3 shall be replaced by the following:

‘3. Directive 86/560/EEC shall not apply to:

(a) amounts of VAT which according to the legislation of the Member State of refund have been incorrectly invoiced;

(b) invoiced amounts of VAT in respect of supplies of goods the supply of which is, or may be, exempt pursuant to Article 138 or Article 146(1)(b).’;

5.

the following Article 171a shall be inserted:

‘Article 171a

Member States may, instead of granting a refund of VAT pursuant to Directives 86/560/EEC or 2008/9/EC on those supplies of goods or services to a taxable person in respect of which the taxable person is liable to pay the tax in accordance with Articles 194 to 197 or Article 199, allow deduction of this tax pursuant to the procedure laid down in Article 168. The existing restrictions pursuant to Article 2(2) and Article 4(2) of Directive 86/560/EEC may be retained.

To that end, Member States may exclude the taxable person who is liable to pay the tax from the refund procedure pursuant to Directives 86/560/EEC or 2008/9/EC.’;

6.

in Section 1 of Chapter 1 of Title XI, the following Article 192a shall be inserted:

‘Article 192a

For the purposes of this Section, a taxable person who has a fixed establishment within the territory of the Member State where the tax is due shall be regarded as a taxable person who is not established within that Member State when the following conditions are met:

(a)

he makes a taxable supply of goods or of services within the territory of that Member State;

(b)

an establishment which the supplier has within the territory of that Member State does not intervene in that supply.’;

7.

Article 196 shall be replaced by the following:

‘Article 196

VAT shall be payable by any taxable person, or non-taxable legal person identified for VAT purposes, to whom the services referred to in Article 44 are supplied, if the services are supplied by a taxable person not established within the territory of the Member State.’;

8.

in Article 214, the following points shall be added:

‘(d)

every taxable person who within their respective territory receives services for which he is liable to pay VAT pursuant to Article 196;

(e)

every taxable person, established within their respective territory, who supplies services within the territory of another Member State for which VAT is payable solely by the recipient pursuant to Article 196.’;

9.

Article 262 shall be replaced by the following:

‘Article 262

Every taxable person identified for VAT purposes shall submit a recapitulative statement of the following:

(a)

the acquirers identified for VAT purposes to whom he has supplied goods in accordance with the conditions specified in Article 138(1) and (2)(c);

(b)

the persons identified for VAT purposes to whom he has supplied goods which were supplied to him by way of intra-Community acquisitions referred to in Article 42;

(c)

the taxable persons, and the non-taxable legal persons identified for VAT purposes, to whom he has supplied services, other than services that are exempted from VAT in the Member State where the transaction is taxable, and for which the recipient is liable to pay the tax pursuant to Article 196.’;

10.

in Article 264, paragraph 1 shall be amended as follows:

(a)

points (a) and (b) shall be replaced by the following:

‘(a)

the VAT identification number of the taxable person in the Member State in which the recapitulative statement must be submitted and under which he has carried out the supply of goods in accordance with the conditions specified in Article 138(1) and under which he effected taxable supplies of services in accordance with the conditions laid down in Article 44;

(b)

the VAT identification number of the person acquiring the goods or receiving the services in a Member State other than that in which the recapitulative statement must be submitted and under which the goods or services were supplied to him;’;

(b)

point (d) shall be replaced by the following:

‘(d)

for each person who acquired goods or received services, the total value of the supplies of goods and the total value of the supplies of services carried out by the taxable person;’;

11.

Article 358 shall be amended as follows:

(a)

point (2) shall be replaced by the following:

‘(2)

“electronic services” and “electronically supplied services” mean the services referred to in point (k) of the first paragraph of Article 59;’;

(b)

point (4) shall be replaced by the following:

‘(4)

“Member State of consumption” means the Member State in which, pursuant to Article 58, the supply of the electronic services is deemed to take place;’;

12.

in Annex II, the heading shall be replaced by the following:

‘INDICATIVE LIST OF THE ELECTRONICALLY SUPPLIED SERVICES REFERRED TO IN ARTICLE 58 AND POINT (K) OF THE FIRST PARAGRAPH OF ARTICLE 59’.

(1)

Thirteenth Council Directive 86/560/EEC of 17 November 1986 on the harmonisation of the laws of the Member States relating to turnover taxes — Arrangements for the refund of value added tax to taxable persons not established in Community territory (OJ L 326, 21.11.1986, p. 40).

(2)

Council Directive 2008/9/EC of 12 February 2008 laying down detailed rules for the refund of value added tax, provided for in Directive 2006/112/EC to taxable persons not established in the Member State of refund but established in another Member State (OJ L 44, 20.2.2008, p. 23).’;