European Union and Germany: international VAT conference – day 1June 27, 2012
The opening speech was given by Dr. Stefan Maunz (küffner maunz langer zugmaier) and Karl-Heinz Haydl (GE Deutschland Holding GmbH), who explained the selection of the topics and welcomed the participants.
Compliance aspects regarding the supply of goods within the European Union
In the first presentation, Georg Geberth (Siemens AG) focused on documentary evidence that is necessary to apply the zero rate to intra-Community supplies. Such evidence is subject to procedural autonomy of the Member States and, as a result of this, there is no uniformity in the European Union in that matter.
Some Member States impose requirements which are not in line with the principles of VAT neutrality, proportionality and legal certainty.
Mr. Geberth suggested a more efficient approach by prescribing different proof requirements for different market segments, making use of electronic commercial documentation and determining the reliability of carriers by certification.
Ferdinand Huschens (German Federal Ministry of Finance) explained the German approach to proof of intra-Community supplies of goods. As from 1 January 2012, this evidence must be produced by means of a confirmation of arrival (Gelangensbestätigung) signed by the recipient.
This certificate shall replace the existing documents (CMRs, delivery notes etc.) and be the only evidence that the goods have effectively arrived in the Member State of destination. In the view of the Ministry, the use of a uniform document shall simplify matters and reduce the number of legal disputes regarding the appropriate evidence.
However, the business sector has criticized the new requirements (difficulty in obtaining the customer’s signature, high costs incurred in switching to the new procedure). Dr. Stefan Maunz discussed the practical implications of the Court of Justice of the European Union (CJEU) judgments in Euro Tyre Holding B.V. (C-430/09) and Facet Trading BV (C-536/08).
The former case concerned the allocation of intra-Community transport within chain transactions while the latter, the application of the safety net regulation. An article covering these topics more extensively will be soon published in the International VAT Monitor. The presentations were followed by a lively panel and audience discussion.
Many participants criticized the Germany requirement of confirmation of arrival for being too burdensome to fulfill and for making the supplier’s compliance obligations dependent on the customer’s willingness to sign this particular document. A statement from the customer should only be required in exceptional situations (due to unavailability of other evidence) and not function as a general rule.
It was also pointed out that proof of intra-Community supplies is now more difficult to obtain than proof of exportation. Practitioners would welcome a risk-based approach (compliance obligations depending on reliability).
Concept of VAT neutrality
The first two presentations had an academic character. Prof. Dr. Ben Terra discussed the VAT status of a legal person and the VAT treatment of share issuance. According to his view, all activities of a legal person shall be treated as taxable supplies and a pure holding company shall be treated as a taxable person.
Prof. Dr. Joachim Englisch focused on the temporal dimension of VAT neutrality. In this context, he discussed the chargeability schemes, retroactive amendments of formerly incorrect invoices and input VAT adjustments for subsequent events.
In the next presentation, Henk Wildeboer (Philips International BV) discussed the VAT neutrality from a business perspective. VAT neutrality should have both a fiscal (equal treatment of taxable person, fair competition between residents and non-residents) and a monetary component (right to input VAT deduction throughout the supply chain).
It should be considered from a global perspective. Although this concept is well implemented in the EU VAT law, there are still areas in which full harmonization and neutrality are not achieved (e.g., scope of exemptions for financial services).
Prof. Patrick Wille (VAT Forum) discussed the Invoicing Directive (Directive 2010/45/EU), which aims at a far-reaching harmonization of the invoicing rules as well as at ensuing an equal treatment between paper and electronic invoices.
Prof. Wille gave an overview of the most important rules which will have to be applied by Member States as from 1 January 2013 as well as stressed the importance of Explanatory Notes drafted by the DG Taxation and Customs Union.
Explanatory Notes are informal guidance intended to help Member States to implement the Invoicing Directive in national legislation in a more consistent manner and to assist businesses with practical issues.
The presentation was concluded with an overview of the implementation status of the Directive in selected Member States.
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