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Questions and Answers
What principle generally applies in B2B selling of goods in international trade?
What principle generally applies in B2B selling of goods in international trade?
Which of the following applies to goods sent by courier or post for B2C sales?
Which of the following applies to goods sent by courier or post for B2C sales?
What is the MOSS scheme used for?
What is the MOSS scheme used for?
What is the threshold for applying the destination principle in B2C sales since July 2021?
What is the threshold for applying the destination principle in B2C sales since July 2021?
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In which situation can the destination principle be voluntarily applied?
In which situation can the destination principle be voluntarily applied?
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What is the general rule for B2C transactions regarding VAT?
What is the general rule for B2C transactions regarding VAT?
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When does the reverse charge rule apply for B2B services?
When does the reverse charge rule apply for B2B services?
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What principle generally applies to VAT in B2B transactions?
What principle generally applies to VAT in B2B transactions?
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What is the treatment of exportations regarding VAT?
What is the treatment of exportations regarding VAT?
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For EU acquisitions, who accounts for the VAT under the reverse charge rule?
For EU acquisitions, who accounts for the VAT under the reverse charge rule?
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What VAT treatment applies to services related to land?
What VAT treatment applies to services related to land?
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When is VAT paid for imports?
When is VAT paid for imports?
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What is the primary reason for a business to register in VIES?
What is the primary reason for a business to register in VIES?
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Study Notes
International Taxation - Key Concepts
- Value Added Tax (VAT): VAT is charged to clients (output VAT) and paid to suppliers (input VAT). VAT returns are usually done quarterly (output VAT - input VAT).
- B2C General Rule: VAT is charged to the country of origin.
- B2B General Rule: VAT is charged to the destination country; exceptions include distance selling (if above a threshold), transport acquisitions.
- Exports: Generally exempt from VAT.
- Importations: VAT is paid in customs areas.
- EU Sales: Exempted from VAT; reverse charge rule applies in EU acquisitions (VAT accounted by the purchasing party).
- Services: VAT collected where the service is located; B2C is location of the supplier, B2B is location of the customer.
VAT in International Trade (B2B)
- Exports: Exempt from VAT; VAT is not charged on exports.
- Importations: VAT is paid in the customs area, at local rates, and subject to any applicable exemptions.
- EU Sales: Exempt from VAT when exporting to another EU country.
- EU Purchases: VAT is collected through the reverse charge rule.
Key Idea:
- The destination principle is the primary rule in B2B sales.
VAT in International Trade (B2C)
- Distance Selling: The destination principle applies if the turnover in a single country exceeds a predefined threshold (harmonized to €10,000 since July 2021). Otherwise, the origin principle applies.
- Acquisition of New Means of Transport: Based on destination principles. VAT paid where the transport is used or destined.
- Retail Export Scheme: Designed for tourists and offers VAT refunds for non-residents visiting the EU; available for EU residents in other countries.
- MOSS Scheme (Mini One-Stop Shop): Provides a system for businesses that send goods and/or services to consumers in other EU countries. Goods sent by mail or courier in particular are covered.
Services:
- VAT is collected at the location of the service/customer related to services location.
- Services involving land, performances of artists&sportspeople, and broadcasting/telecommunications are handled according to specific locations.
- A Mini One-Stop Shop scheme (MOSS) is often used for many digital or e-services.
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Description
Test your knowledge on the key concepts of international taxation, including VAT rules for exports, imports, and EU sales. Explore the differences in B2B and B2C VAT applications, as well as exemptions and reverses charge mechanisms within the EU. Perfect for students and professionals looking to deepen their understanding of international tax regulations.
