International Taxation PDF

International Taxation Key concepts, principles & guidelines 3.- EU Directives & VAT on International trade 1 Tax &VALUE ADDED TAX IN A GLANCE KEY CONCEPTS OUPUT VAT: VAT CHARGED TO OUR CLIENTS INPUT VAT: VAT PAID TO OUR SUPPLIERS VA...

International Taxation Key concepts, principles & guidelines 3.- EU Directives & VAT on International trade 1 Tax &VALUE ADDED TAX IN A GLANCE KEY CONCEPTS OUPUT VAT: VAT CHARGED TO OUR CLIENTS INPUT VAT: VAT PAID TO OUR SUPPLIERS VAT RETURN: OUTPUT VAT – INPUT VAT (RETURN DONE USUALLY QUARTERLY) B2C GENERAL RULE: ORIGIN PRINCIPLE (VAT PAID TO THE COUNTRY OF ORIGIN) B2B GENERAL RULE: DESTINATION PRINCIPLE (VAT PAID TO DESTINATION COUNTRY) EXCEPTIONS: DISTANCE SELLING (IF > THRESHOLD, DESTINATION PRINCIPLE…), ACQUISITIONS OF MEANS OF TRANSPORT (DESTINATION PRINCIPLE), … EXPORTATIONS & EU SALES: FULL EXEMPTION (NO VAT CHARGED) IMPORTATIONS: VAT PAID IN CUSTOMS AREA WHEN WE COLLECT THE GOODS EU ACQUISITIONS: REVERSE CHARGE RULE APPLIES (VAT IS ACCOUNTED BY THE PURCHASING PARTY IN THE COUNTRY OF DESTINATION) SERVICES: VAT MUST BE COLLECTED WHERE THE SERVICE IS LOCATED B2C GENERAL RULE: SERVICE LOCATED WHERE THE SUPPLIER BELONGS B2B GENERAL RULE: SERVICE LOCATED WHERE THE CUSTOMER BELONGS (REVERSE CHARGE RULE APPLIES IF SUPPLIER IS NOT ESTABLISHED IN COUNTRY OF DESTINATION) SPECIAL RULES: SERVICES RELATED TO LAND (WHERE THE LAND ITSELF IS LOCATED), B2C e-SERVICES (SINCE 2015 MOVED TO LOCATION WHERE THE RECIPIENT BELONGS), … Tax VAT&inCustoms administration International Trade (1):–B2B Compliance selling ofof tax rules goods Transaction Rule Comments Are exempted of VAT. We don’t Both direct & indirect Exportations charge VAT when we export exportations (…) VAT will be paid/warranted in Importations At local VAT rates & exemptions the customs area Registration in VIES is necessary Are exempted of VAT. We don’t for both parties EU-Sales charge VAT when we export Proof of transport can be required by Tax Authority EU- VAT will be collected through VAT is paid though the ordinary Purchases ‘reverse charge’ rule or an specific VAT return Key idea - All of the previous rules are a consequence of the main one: Destination principle applies in B2B selling of goods. VAT in International Trade (2): B2C selling of goods Tax & Customs administration – Compliance of tax rules Starting point is Origin principle, but there is a growing number of exceptions: Destination principle applies if Goods sent by courier or post, Distance turnover in one country surpasses its however ordered threshold (harmonized to 10.000 € selling since July 2021) MOSS scheme is available to scheme If not, destination principle can report in one single EU country all voluntarily be applied (…) sales to rest of EU Applies to new land vehicles, ship Acquisition Destination principle applies or aircraft (