1. INTRA-COMMUNITY ACQUISITIONS OF GOODS USING THE METHODOLOGY

2. DEFINITION 2

3. Definition
General
An intra-Community acquisition is the acquisition of the right to dispose as owner of goods which are transported by or on behalf of the supplier or the person acquiring them from a Member State to the person acquiring them in another Member State
Compare with the definition of a supply of goods (mirror)
Art. 6 VAT Act
Item 18(1)(a) Second Schedule 3

4. Definition
Deemed intra-Community acquisitions: will be examined further on
ICA done by a non-taxable legal person: will be examined during the session relating to importation
All the operations assimilated to a supply of goods (for consideration) are also assimilated to acquisitions of goods (for consideration)
Art. 6 VAT Act
Item 18(1)(b) Second Schedule
Art. 6 VAT Act
Item 18(1)(c) Second Schedule
Item 18(2) Second Schedule 4
Art. 6 VAT Act

5. QUESTIONS 1 AND 2 5

6. Questions 1 and 2 : intra-Community acquisition subject to VAT
Conditions in the Member State of origin
Supply taking place outside Malta (in the other Member State where transport begins)
Supply is made for consideration by a taxable person acting as such who is not eligible in the Member State of origin for an exemption under the special scheme for small undertakings
Art. 4(1)(b)(i) VAT Act
Attention: special regime for new means of transport and excise goods 6

7. Questions 1 and 2 : intra-Community acquisition subject to VAT
Conditions in Malta
Goods other than new means of transport or excise goods
Acquisition made for consideration
Acquisition made by a taxable person acting as such who is registered under article 10 or 12 or a non-taxable legal person
Art. 4(1)(b)(i) VAT Act
Attention: special regime for new means of transport and excise goods
Attention: threshold for some taxable persons or non-taxable legal persons 7

8. Questions 1 and 2 : intra-Community acquisition subject to VAT
New means of transport
Intra-Community acquisition always subject to VAT in Malta
Whatever is the quality of the person acquiring the good (includes private individual) : will be examined during the session relating to new means of transport
Art. 4(1)(b)(ii) VAT Act 8

9. Questions 1 and 2 : intra-Community acquisition subject to VAT
Excise goods
Intra-Community acquisition always subject to VAT in Malta
If made by a taxable person or a non-taxable legal person : will be examined during the session relating to excise goods
Art. 4(1)(b)(iii), VAT Act 9

10. Questions 1 and 2: intra-Community acquisition subject to VAT : characteristics
VERY IMPORTANT
Every Member State is sovereign
Every Member State determines if there is an intra-Community acquisition (subject to VAT) without taking into account whether there is or not an intra-Community supply exempt from VAT in the Member State of origin
Therefore, intra-Community acquisitions of goods subject to VAT in Malta are completely independent from whether there have been intra-Community supplies of goods exempt from VAT in the Member State of origin : NO LINK AT ALL = TWO SEPARATE OPERATIONS 10

11. QUESTION 3 11

12. Question 3 : place of intra-Community acquisitions
In Malta if goods are in Malta when transport ends (compare with place of supply: where transport begins)
In Malta if the acquirer provides the supplier with a Maltese VAT number (under article 10: compare with 6th Directive) unless this person proves that the acquisition takes place in another Member State and has been subject to VAT in that other Member State (security net) : will be examined during the session relating to triangulation
Art. 7 VAT Act
Item 13 Third Schedule
Item 14(1) Third Schedule
Art. 7 VAT Act 12

13. Question 3 : place of intra-Community acquisitions (example)
Other EU MS
Malta A B
Sale of goods
Transport
Supply
Place: where transport begins
Intra-Community acquisition
Place: where transport ends 13

14. Question 3 : place of intra-Community acquisitions(example)
France
Italy A
B : provides to A his Maltese VAT number
Sale of goods
Transport
Supply
Place: where transport begins
Intra-Community acquisition in Italy where transport ends
Security net: intra-Community acquisition in Malta (MS of VAT identification) 14

15. QUESTION 4 15

16. Question 4 : exemptions on intra-Community acquisitions
ICA of goods whose supply or importation in Malta would be exempt from VAT
ICA of goods where the tax would be fully refundable
Example: the representation office of an Italian firm (not doing any taxable supply in Malta) is acquiring furniture from Italy for this office: the ICA is exempt from VAT insofar as the Italian firm would be entitled to a refund of this VAT
Art. 9(1)(b) VAT Act
Item 2 Part Three Fifth Schedule
Art. 9(1)(b) VAT Act
Item 3 Part Three Fifth Schedule 16

17. Question 4 : exemptions on intra-Community acquisitions
ICA of goods intended to be placed or while they are placed under a customs duty suspension regime
ICA of investment gold
Art. 9(1)(b) VAT Act
Item 4 Part Three Fifth Schedule
Art. 9(1)(b) VAT Act
Item 5 Part Three Fifth Schedule
Item 1 Part 6 Fourteenth Schedule 17

18. Question 4 : exemptions on intra-Community acquisitions
ICA of goods supplied in the MS of origin under the special regime of the margin scheme on second-hand goods, works of art, collectors’ items and antiques
Art. 9(1)(b) VAT Act
Item 6 Part Three Fifth Schedule
Malta
Spain B A
Supply of a second-hand good
under the profit margin scheme
Definitively taxed in Spain
ICA exempt from VAT 18

19. Question 4 : exemptions on intra-Community acquisitions
ICA of goods in Malta made for the purposes of a subsequent supply (triangulation – specific conditions)
Will be examined during the session relating to triangulation
Art. 9(1)(b) VAT Act
Item 1 Part Three Fifth Schedule 19

20. QUESTION 5 20

21. Question 5 : person liable to pay VAT on intra-Community acquisitions
The payment of the tax on an intra-Community acquisition shall be the liability of the person who makes the acquisition
Compliance: reverse charge mechanism
VAT reported as due in the VAT return
VAT reported as deductible in the same VAT return (according to the right to deduct VAT + limitations and exclusions + compliant invoice)
Art. 20(1)(b) VAT Act 21

22. OTHER QUESTIONS 22

23. Other question : chargeable event and chargeability
The chargeable event takes place on the date which would be the date of the chargeable event had those goods been supplied in Malta where the acquisition is made
The tax becomes chargeable on:
The 15th day of the month following the date of the acquisition (compare with exempt intra-Community supply)
The date on which a tax invoice (for the whole price) is issued to the person making the acquisition for the supply of goods in question if this date is earlier than the date referred to in first bullet point
Art. 8 VAT Act
Item 5 Fourth Schedule
Art. 8 VAT Act
Item 6 Fourth Schedule 23

24. Other question: chargeable event and chargeability (example)
Other EU MS Malta
A B
Intra-Community supply exempt from VAT Intra-Community acquisition subject to VAT and taxable
Delivery date: 29/07/ Date of the ICA: 29/07/2004
Date of invoice: 20/08/2004
Chargeable event: 29/07/ Chargeable event: 29/07/2004
Date tax “becomes chargeable”: 15/08/2004 Date tax becomes chargeable: /08/2004 24

25. Other question: chargeable event and chargeability (example)
Other EU MS Malta
A B
Intra-Community supply exempt from VAT Intra-Community acquisition subject to VAT and taxable
Delivery date: 29/07/ Date of the ICA: 29/07/2004
Date of invoice: 29/07/2004
Chargeable event: 29/07/ Chargeable event: 29/07/2004
Date tax “becomes chargeable”: 29/07/2004 Date tax becomes chargeable: /07/2004 25

26. Other question : rate of intra-Community acquisitions
The tax chargeable on an intra-Community acquisition of goods shall be the rate applicable to the supply of like goods in Malta
Art. 19(3) VAT Act
Art. 19(1) and (2) VAT Act
Eight Schedule 26

27. DEEMED INTRA-COMMUNITY ACQUISITIONS OF GOODS TRANSFER NON TRANSFER

28. DEFINITION AND CHARACTERISTICS28

29. Deemed intra-Community acquisition: definition
The use in Malta by a taxable person for the purpose of his economic activity of goods transported by him or on his behalf from another Member State within the territory of which those goods were produced, extracted, purchased, acquired or imported by him for the purpose of his economic activity, where the transport of those goods would, if made from Malta to another Member State, be treated as a transfer of goods to another Member State, shall be treated as an intra-Community acquisition for consideration
Item 18(1)(b) and 18(2) Second Schedule
Art. 6 VAT Act 29

30. Deemed intra-Community acquisition: characteristics
Move from another Member State to Malta (without transaction)
By a taxable person
Of goods forming part of his economic activity =
Intra-Community acquisition
For consideration
All the rules related to intra-Community acquisitions are applicable mutatis mutandis including compliance (recapitulative statement in the Member State of departure) 30

31. Deemed intra-Community acquisition: characteristics
VERY IMPORTANT
Every Member State is sovereign
Every Member State determines if there is a deemed intra- Community acquisition without taking into account whether or not there is a transfer in the Member State of origin
Every Member State determines if there is a deemed intra- Community acquisition taking into account if there would be a transfer in case the goods were transported from his territory to another Member State
Therefore, transfer and deemed intra-Community acquisition are in principle independent from each other 31

32. Deemed intra-Community acquisition: example
Other EU MS Malta
A = taxable person
Premises of A
Move (transport) of goods from the stock of A in the other MS to the stock of A in Malta (without underlying transaction
A has to register for VAT purposes in Malta
(Deemed intra-Community) acquisition by a taxable person? YES
Deemed ICA in the scope of VAT (e.g. for consideration)? YES
Place of ICA? In Malta (where transport ends)
Is there an exemption? NO (assumption)
Person liable to pay VAT? A (must register for VAT purposes in Malta) 32

33. NO DEEMED INTRA-COMMUNITY ACQUISITION33

34. No deemed intra-Community acquisition
Goods shall not be deemed to be intra-Community acquired for consideration if they are transported from another MS to Malta for the purposes of one of the following transactions: (1)
A supply with installation or assembly in Malta
A supply of these goods, which constitutes a distance sale taxable in Malta
A supply of these goods by or on behalf of the taxable person on board ships, aircraft that takes place in Malta
A supply of these goods that is treated as an intra-Community supply exempt from VAT, as a supply exempt from VAT for export…
Art. 6 VAT Act and item 17(2)(a,b,c and d) Second Schedule
No special compliance 34

35. No deemed intra-Community acquisition
… : (2)
the supply of services to the taxable person involving work on those goods physically carried out in Malta provided the said goods are returned to that person in the Member State of departure on the completion of the said work
the temporary use of those goods in Malta for the purpose of the supply of services by the taxable person if that person is established in the other Member State
the temporary use of those goods in Malta for a period not exceeding twenty-four months if the importation of those goods into Malta for temporary use would qualify for a full exemption from import duties
Art. 6 VAT Act and item 17(2)(e,f and g) Second Schedule
Special compliance (register of materials received for first bullet point : Item 1(j) Eleventh Schedule) 35

36. The no deemed ICA becomes an ICA
If a move of goods to Malta satisfies the conditions to be a non transfer from Malta (and therefore a no deemed ICA in Malta ) and if afterwards these conditions are not longer met, this non transfer (no deemed ICA) becomes a transfer (and consequently an ICA) with all the consequences
Simplification measures are possible (regulations)
Art. 6 VAT Act
Items 17(3) and 18(2) Second Schedule
Art. 6 VAT Act
Item 17(4) Second Schedule 36

37. No deemed intra-Community acquisition: example
Other EU MS Malta
A = taxable person
Export by A
Move (transport) of goods from another MS to Malta in order to export these goods (in the framework of a transaction)
(Deemed) ICA in Malta by a taxable person? NO
BUT
Supply by a taxable person? YES
Supply in the scope of VAT? YES
Place of supply? In the other MS (where transport begins)
Is there an exemption? N/A (Yes in the other MS if goods are transported outside the EU)
Person liable to pay VAT? N/A 37

38. No deemed intra-Community acquisition: example
Other EU MS Malta
A = taxable person B
IC supply by A to B
(Deemed) ICA in Malta by a taxable person? NO
BUT
ICA in Malta by a taxable person? YES (B)
ICA in the scope of VAT? YES
Place of ICA? In Malta (where transport ends)
Is there an exemption? NO (assumption)
Person liable to pay VAT? B 38

39. No deemed intra-Community acquisition: example
Other EU MS Malta
A = taxable person B
Distance sale by A to B
(Deemed) ICA in Malta by a taxable person? NO
BUT
Supply by a taxable person? YES (A)
Supply in the scope of VAT? YES
Place of supply? In Malta (where transport ends)
Is there an exemption? NO (assumption)
Person liable to pay VAT? A (must register for VAT purposes in Malta) 39

40. No deemed intra-Community acquisition: example
Other EU MS Malta
A = taxable person B
Supply with installation by A
(Deemed) ICA in Malta by a taxable person? NO
BUT
Supply by a taxable person? YES (A)
Supply in the scope of VAT? YES
Place of supply? In Malta (where goods are installed or assembled)
Is there an exemption? NO (assumption)
Person liable to pay VAT? Either B if he is registered under article 10 or A if B is not registered under article 10 40

41. No deemed intra-Community acquisition: example
Other EU MS Malta
A = taxable person
Passenger
Supply by A on board ships: place of departure in Malta
(Deemed) ICA in Malta by a taxable person? NO
BUT
Supply by a taxable person? YES (A)
Supply in the scope of VAT? YES
Place of supply? In Malta (point of departure of transport of passengers)
Is there an exemption? YES or NO
Person liable to pay VAT? A (if any) 41

42. No deemed intra-Community acquisition: example
Other EU MS Malta
A = taxable person
B : processing
Move of goods from the other MS to Malta in order to be processed
After completion of the work, goods are going back to the other MS
(Deemed) ICA in Malta by a taxable person? NO
Compliance: register of materials received (movements of goods)
For service from B to A: see session on services 42

43. (No) deemed intra-Community acquisition: example
Other EU MS Malta
A = taxable person
B : processing
Move of goods from the other MS to Malta in order to be processed
After completion of the work, goods are not going back to the other MS
A has to register for VAT purposes in Malta
(Deemed) ICA in Malta by a taxable person? YES
ICA in the scope of VAT (e.g. for consideration)? YES
Place of ICA? In Malta (where transport ends)
Is there an exemption? NO
Person liable to pay VAT? A (must register for VAT purposes in Malta) 43

44. No deemed intra-Community acquisition: example
Other EU MS Malta
A : service
A = taxable person
Move of goods by A from the other MS to Malta in order to be used in the framework of a service made in Malta
(Deemed) ICA in Malta by a taxable person? NO (even if A has to register for VAT purposes in Malta for the service rendered) 44

45. No deemed intra-Community acquisition: example
Other EU MS Malta
A = taxable person
B : goods on trial
Move of goods by A from the other MS to B in Malta on trial
After trial (not satisfactory), goods are going back to the other MS
(Deemed) ICA in Malta by a taxable person? NO 45

46. No deemed ICA followed by a deemed ICA: example
Other EU MS Malta
A = taxable person
B : goods on trial
Move of goods by A from the other MS to B in Malta on trial. After trial, goods are acquired by B (assumption that B is registered under article 10 and that A is not established nor registered under article 10) 46

47. No deemed ICA followed by a deemed ICA : example (continued) – No simplification
Operation 1 (no simplification in Malta : ICA)
(Deemed) ICA in Malta by a taxable person? YES (from the moment goods are acquired by B). VAT registration of A in Malta
ICA in the scope of VAT (e.g. for consideration)? YES
Place of ICA? In Malta (where transport ends)
Is there an exemption? NO (assumption)
Person liable to pay Maltese VAT? A (must register for VAT purposes in Malta) 47

48. No deemed ICA followed by a deemed ICA : example (continued) – No simplification
Operation 2 (no simplification in Malta : supply of goods to B)
Supply of goods by a taxable person? YES
Supply in the scope of VAT? YES
Place of supply? In Malta (where goods are at the time they are put at the disposal of B)
Is there an exemption? NO (assumption)
Person liable to pay VAT? B 48

49. No deemed ICA (followed by a deemed ICA): example (continued) - Simplification
Operation 1 and 2 (simplification in the other MS : movement of goods and supply of goods to B)
(Deemed) ICA in Malta by a taxable person? NO (from the moment goods are acquired by B)
AND
ICA in Malta by a taxable person? YES (B)
ICA in the scope of VAT? YES
Place of ICA? In Malta (where transport of the goods to B on trial ended)
Is there an exemption? NO (assumption)
Person liable to pay VAT? B 49