1. The proposed definition of ‘services connected with immovable property’ – effective 1/1/2017
Graziella Demanuele Bianco
15th October 2014

2. What is changing?
Special place of supply rule in Article 47 of the EU VAT Directive
Transposed in Item 4 of Part Two of the Third Schedule
The subject of a number of CJEU cases
Different interpretations across EU Member States
Implementing Regulation 1042/2013 of 7th October 2013 to ensure uniform treatment introducing:
An EU wide definition of immovable property for the purposes of the EU VAT Directive
Guidance on the interpretation and application of Article 47
Effective 1/1/2017

3. The current rule Supply of services connected with immovable property
Article 47 EVD
The place of supply of services connected with immovable property, including the services of experts and estate agents, the provision of accommodation in the hotel sector or in sectors with a similar function, such as holiday camps or sites developed for use as camping sites, the granting of rights to use immovable property and services for the preparation and coordination of construction work, such as the services of architects and of firms providing on-site supervision, shall be the place where the immovable property is located.

4. Imp. Reg. 1042/2013 A 3-step approach to the application of Article 47
Establish that the supply is one of services
Determine whether the property in question is immovable and is specific
Determine whether the service has a sufficiently direct connection with that property (a list of inclusions/exclusions provides guidance)

5. New Articles 13b, 31a and 31b

6. New Article 13b “Immovable Property”
Specific part of the earth, on or below its surface, over which title and possession can be created
Building/construction fixed to or in the ground which cannot be easily dismantled or moved
Installed items that make up an integral part of the building/construction without which it would be incomplete e.g. doors, windows, roofs, staircases and lifts
Items/equipment/machine permanently installed which cannot be moved without destroying or altering the building/construction

7. New Article 31a
Article 47 shall include only those services that have a sufficiently direct connection with that property i.e.
Where the services are derived from an immovable property and that property makes up a constituent element of the service and is central to, and essential for, the services supplied;
Where the services are provided to, or directed towards, an immovable property having as their object the legal or physical alteration of that property.

8. New Article 31a List of 17 services covered by Article 47 including:
Drawing up of plans for a particular plot of land
On-site supervision or security
Construction and demolition (incl. pipelines)
Maintenance, renovation, repair (incl. pipeline)
Work on land e.g. agricultural services
Surveying and assessment of risk and integrity
Valuation
Accommodation
Other rights e.g. licences, access to airport lounges

9. New Article 31a
List (contn’d) of 17 services covered by Article 47 including:
Installations of items eventually qualifying as immovable property
Maintenance, repair, inspection and supervision of such installed items
Property management (not of investments in real estate)
Intermediation
Certain legal services
Leasing, letting incl. storage in areas for exclusive use

10. New Article 31a 8 exclusions including:
Advertising even if it involves use of immovable property
Intermediaries acting in the name and on behalf of another person
Provision of stand location at fair/exhibition together with other services
Certain legal services connected to contracts e.g. advice on the terms of a contract, to prove existence of a contract, whether such services are not specific to a transfer of title

11. New Article 31a Parties Service Location Treatment
Maltese supplier and Polish business customer
Complex storage without exclusive property use
Warehouse in Malta
Reverse charge Polish VAT
Belgian supplier
and Maltese business customer
Stand and
ancillaries
Fair in Belgium
Reverse charge Maltese VAT
Italian supplier to a Bulgarian individual
Repairs
Holiday home in Malta
Maltese VAT chargeable by the Italian supplier

12. New Article 31b Equipment put at the disposal of a customer:
Falls within Article 47 if the supplier assumes responsibility for the execution of the work on immovable property;
Rebuttable presumption if the supplier provides the customer with the equipment plus staff for its operation.

13. Timeline
Directive 77/338/EEC – Article 9(2)(a) – ‘The place of supply of services connected with immovable property, including the services of estate agents and experts, and of services for preparing and coordinating construction works, such as the services of architects and of firms providing on-site supervision, shall be the place where the property is situated’.
VAT Committee Guideline on insurance loss adjustment services re immovable property
1977
1984

14. Timeline 1977 1984 1997 C-60/96 – EC v. France
Discussion whether tents, caravans, mobile homes and light framed leisure dwellings are immovable property
1977
1984
1997

15. Timeline
VAT Committee Guideline on place of supply of tiling, papering and parqueting
1984
1997
2000

16. Timeline
COM (2003) 822 proposal – Article 9(2)(a) to include ‘the provision of hotel or similar accommodation’ and ‘the granting of rights to use immovable property’
C-315/00 – Maierhofer
Discussion whether buildings made from prefabricated components are immovable property
1984
1997
2000
2003

17. Discussion on whether mooring berths are immovable property
Timeline
C-428/02 – Marselisborg
Discussion on whether mooring berths are immovable property
1997
2000
2003
2005

18. Whether sale of fishing permits is connected with immovable property
Timeline
C-166/05 – Rudi Heger
Whether sale of fishing permits is connected with immovable property
1997
2000
2003
2005
2006

19. Timeline
Directive 2008/8/EC – The VAT Package Directive introduced today’s Article 47
VAT Committee Guideline on the connection of legal services to immovable property – legal or physical alteration
2000
2003
2005
2006
2008

20. Re fees paid for exchange of timeshare usage rights
Timeline
C-37/08 – RCI Europe
Re fees paid for exchange of timeshare usage rights
VAT Committee Guideline on services of intermediaries - arranging hotel accommodation
2003
2005
2006
2008
2009

21. Re stands in fairs/exhibitions
Timeline
VAT Committee Guideline on definition of immovable property, ‘sufficiently direct connection’ and list of services falling within/outside of Article 47
C-530/09 – Inter-Mark
Re stands in fairs/exhibitions
2005
2006
2008
2009
2011

22. Discussed whether a houseboat was immovable property
Timeline
C-532/11 – Leichenich
Discussed whether a houseboat was immovable property
2006
2008
2009
2011
2012

23. (Opinion and Judgement)
Timeline
C-155/12 – RR Donnelley
(Opinion and Judgement)
Complex storage service comes within the scope of Article 47 if storage is the principal service of a single transaction and if the recipients are given a right to use all or part of expressly specific immovable property.
Regulation 1042/2013
2008
2009
2011
2012
2013

24. Request for input on new Articles 13b, 31a and 31b by EC
Timeline
Request for input on new Articles 13b, 31a and 31b by EC
FISCALIS workshop
Cross border ruling
OECD Guidelines
2010
2011
2012
2013
2014

25. Timeline
Explanatory notes
2011
2012
2013
2014
2015

26. Timeline
Effective date
2011
2012
2013
2014
2015
2017

27. Thank you Graziella Demanuele Bianco Senior Manager, Indirect Tax KPMG
Tel: (00356)