This brief provides further information on HM Revenue and
Custom (HMRC)’s
position, as announced in Revenue and Customs Brief 18 (2015): VAT
grouping rules and the Skandia judgment.
Who should read this
brief
UK VAT-registered businesses who are members of a VAT group in
the UK or another EU member state, and have establishments (branches or
head offices) in other member states.
Background
Details of the Skandia America Corporation decision can be
found in Revenue and Customs Brief 2 (2015): VAT grouping rules and the
Skandia judgment. This outlines the VAT treatment that applied before
the Skandia decision, how VAT treatment will change as a result of the
judgment and the date when the change will take effect.
Revenue and Customs Brief 18 (2015) was published on 30
October 2015. It confirmed UK VAT changes resulting from the Skandia
judgement and provided details of which other member states operate
‘establishment only’ VAT grouping.
Further
information on other member states’ VAT grouping
HMRC
has received additional information about VAT grouping in the
Netherlands and Spain. The table provides an updated view on how the UK
expects member states to operate VAT grouping in the light of the
Skandia decision, and makes minor clarifications.
Member state
Latest position
Cyprus, Finland, Germany, Spain (advanced method)
At the time of publication the intention of these
member states is uncertain
Austria, Ireland, the Netherlands, UK
HMRC
does not expect these member states to apply ‘establishment only’ VAT
grouping to create intra-establishment supplies when the establishment
in the member state is VAT grouped
Italy, Romania, Spain (basic method)
These types of ‘VAT grouping’ are purely
administrative, treating each member as a separate taxable person and
just amalgamating their VAT figures on a single return. Such ‘grouping’
does not trigger the UK VAT changes
Belgium, the Czech Republic, Denmark, Estonia, Hungary,
Latvia, Slovakia, Sweden
HMRC
expects these member states to apply ‘establishment only’ VAT grouping
to create intra-establishment supplies when the establishment in the
member state is VAT grouped
Bulgaria, Croatia, France, Greece, Lithuania,
Luxembourg, Malta, Poland, Portugal, Slovenia
HMRC
understands these member states do not have VAT grouping
It must be noted that:
this information is provided as a guide only
it is the responsibility of individual businesses to
confirm the situation with the relevant member state tax authority and
agree how it applies to their own particular circumstances
HMRC
expects individual businesses to apply the changes contained within
this brief from 1 January 2016 (where the member state tax authority
has applied establishment only VAT grouping to create
intra-establishment supplies when the establishment in the member state
is VAT grouped)
where the position is currently uncertain, HMRC expects the
individual business to apply the changes contained within Revenue and
Customs Brief 18 (2015) from the date upon which the member state tax
authority applies such establishment only VAT Grouping, if this is
after 1 January 2016
Who can
I contact for further information?
If you have any questions about this revenue and customs
brief, please contact your Customer Relationship Manager (if one is
allocated to your business) or the VAT Helpline on Telephone: 0300 200
3700.
A licence is needed to reproduce this article and has been republished
for educational / informational purposes only. Article reproduced by
permission of HM Revenue & Customs.
