Read Talking Points to keep up to date on recent Indirect Tax developments
Talking Points is a weekly newsletter covering recent developments in Indirect Tax. We will highlight the most significant items in Tax Matters Digest so readers are aware of issues that may be relevant and can read on for more details where applicable. In the last two editions we covered: “Revenue and Customs Brief 15 (2020): Conclusion of review of import VAT deducted as input tax by non-owners”; the European Court of Justice (ECJ) decisions in Vos Aannemingen and United Biscuits concerning input tax recovery on costs that benefit third parties and the liability of the management of defined benefit pension schemes by non-insurers respectively; guidance from the European Commission on e-commerce rules that will apply in the EU from 1 July 2021; HMRC updates to the Taxable Persons guidance on employment bureaux; HMRC guidance about supplies of goods after transition ends; and an upcoming KPMG Brexit and customs webinar.
In Revenue and Customs Brief 15/2020, HMRC confirmed their previous policy that from 15 July 2019 only the owner (or an agent acting as owner for VAT purposes) of imported goods can recover the import VAT, subject to the other conditions for VAT recovery. In the case of Vos Aannemingen the ECJ decided that the fact a third party benefits from a supply does not prevent full VAT recovery by the recipient as long as there is a link between the VAT and the latter’s taxable supplies to which the third party benefit is ancillary. The Commission released 99 pages of guidance on the new e-commerce rules which apply in the EU from 1 July 2021. These include the extension of the current Mini One Stop Shop and distance selling changes.
The ECJ decided in the United Biscuits case that the management of a defined benefit pension scheme is not an insurance transaction so is not exempt. There is some useful updated guidance in the Taxable Persons Manual about the four supply structures an employment bureau can be involved in. There are also various updates about trade with Northern Ireland after transition and how to deal with and invoice for overseas goods sold to UK customers from 1 January 2021. KPMG is hosting a Brexit and customs client webinar on 20 October.
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