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HM Revenue and Customs Brief 23/15 - VAT grouping rules and the Skandia judgment

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Purpose of this brief

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.


About the Author

© Crown Copyright 2015.

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.



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Article Published/Sorted/Amended on Scopulus 2015-12-17 12:13:48 in Tax Articles

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