Presentation on theme: "The proposed definition of ‘services connected with immovable property’ – effective 1/1/2017 Graziella Demanuele Bianco 15th October 2014."— Presentation transcript:
1 The proposed definition of ‘services connected with immovable property’ – effective 1/1/2017 Graziella Demanuele Bianco15th October 2014
2 What is changing?Special place of supply rule in Article 47 of the EU VAT DirectiveTransposed in Item 4 of Part Two of the Third ScheduleThe subject of a number of CJEU casesDifferent interpretations across EU Member StatesImplementing 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 DirectiveGuidance on the interpretation and application of Article 47Effective 1/1/2017
3 The current rule Supply of services connected with immovable property Article 47 EVDThe 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 servicesDetermine whether the property in question is immovable and is specificDetermine whether the service has a sufficiently direct connection with that property (a list of inclusions/exclusions provides guidance)
6 New Article 13b “Immovable Property” Specific part of the earth, on or below its surface, over which title and possession can be createdBuilding/construction fixed to or in the ground which cannot be easily dismantled or movedInstalled items that make up an integral part of the building/construction without which it would be incomplete e.g. doors, windows, roofs, staircases and liftsItems/equipment/machine permanently installed which cannot be moved without destroying or altering the building/construction
7 New Article 31aArticle 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 landOn-site supervision or securityConstruction and demolition (incl. pipelines)Maintenance, renovation, repair (incl. pipeline)Work on land e.g. agricultural servicesSurveying and assessment of risk and integrityValuationAccommodationOther rights e.g. licences, access to airport lounges
9 New Article 31aList (contn’d) of 17 services covered by Article 47 including:Installations of items eventually qualifying as immovable propertyMaintenance, repair, inspection and supervision of such installed itemsProperty management (not of investments in real estate)IntermediationCertain legal servicesLeasing, letting incl. storage in areas for exclusive use
10 New Article 31a 8 exclusions including: Advertising even if it involves use of immovable propertyIntermediaries acting in the name and on behalf of another personProvision of stand location at fair/exhibition together with other servicesCertain 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 customerComplex storage without exclusive property useWarehouse in MaltaReverse charge Polish VATBelgian supplierand Maltese business customerStand andancillariesFair in BelgiumReverse charge Maltese VATItalian supplier to a Bulgarian individualRepairsHoliday home in MaltaMaltese 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 TimelineDirective 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 property19771984
14 Timeline 1977 1984 1997 C-60/96 – EC v. France Discussion whether tents, caravans, mobile homes and light framed leisure dwellings are immovable property197719841997
15 TimelineVAT Committee Guideline on place of supply of tiling, papering and parqueting198419972000
16 TimelineCOM (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 – MaierhoferDiscussion whether buildings made from prefabricated components are immovable property1984199720002003
17 Discussion on whether mooring berths are immovable property TimelineC-428/02 – MarselisborgDiscussion on whether mooring berths are immovable property1997200020032005
18 Whether sale of fishing permits is connected with immovable property TimelineC-166/05 – Rudi HegerWhether sale of fishing permits is connected with immovable property19972000200320052006
19 TimelineDirective 2008/8/EC – The VAT Package Directive introduced today’s Article 47VAT Committee Guideline on the connection of legal services to immovable property – legal or physical alteration20002003200520062008
20 Re fees paid for exchange of timeshare usage rights TimelineC-37/08 – RCI EuropeRe fees paid for exchange of timeshare usage rightsVAT Committee Guideline on services of intermediaries - arranging hotel accommodation20032005200620082009
21 Re stands in fairs/exhibitions TimelineVAT Committee Guideline on definition of immovable property, ‘sufficiently direct connection’ and list of services falling within/outside of Article 47C-530/09 – Inter-MarkRe stands in fairs/exhibitions20052006200820092011
22 Discussed whether a houseboat was immovable property TimelineC-532/11 – LeichenichDiscussed whether a houseboat was immovable property20062008200920112012
23 (Opinion and Judgement) TimelineC-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 1042/201320082009201120122013
24 Request for input on new Articles 13b, 31a and 31b by EC TimelineRequest for input on new Articles 13b, 31a and 31b by ECFISCALIS workshopCross border rulingOECD Guidelines20102011201220132014