A series of important VAT amendments came into force on January 1 as a result of the "VAT package" agreement reached by EU finance ministers in December 2007, VAT director-general Joseph Sammut told The Times Business.
The amendments, which have been transposed to the VAT Act, mainly involve new place of supply of services rules, new capitulative statement rules and new rules for applying for refunds for VAT incurred in other member states.
Mr Sammut explained that the new place of supply of services rules consist in changes to the rules that are to be applied in determining where a service is to be taxed when supplied by a firm established in Malta to a recipient not established in Malta, and vice-versa.
"The place of supply rules have a general rule and a number of exceptions," Mr Sammut pointed out. "The 'old' general rule provided that the place of supply of a service was the place where the supplier was established, irrespective to whom that service is supplied. The 'new' general rules distinguish between the customer who receives the service: when the service is supplied to a taxable person (business-to-business) the place of supply would be the place where the customer is established. When the service is supplied to a non-taxable person (business to consumer) the place of supply would be the place where the supplier of the service is established."
The recapitulative statement is that which suppliers submit to the tax administration where they list the VAT number of people in other member states to whom they make intra-community supplies.
Mr Sammut explained: "Prior to the introduction of the new place of supply rules, this reporting requirement was only for taxable persons making exempt intra-community supplies of goods. Now this statement is also extended to supplies of exempt services which are taxable in the member state of the purchaser. Therefore, the new recapitulative statement rules require suppliers of services, where the place of supply is in another member state other than in Malta, to report services so supplied in a recapitulative statement. This report is to be furnished electronically to the VAT Department through the VAT Department's website."
The new rules interest people registered under Article 10 of the VAT Act, who Mr Sammut said, are not necessarily registered in Malta and who make supplies for consideration in the course of an economic activity.
"The registration under Article 10 is to distinguish these people from the registration under Article 11 (people who have a turnover below the taxable threshold) and the registration under Article 12 (people who are not taxable but who make intra-community acquisitions for which they are liable to pay VAT in Malta)."
More information and guidelines are available through the VAT Department's portal at http://www.vat.gov.mt/morenews.asp?lang=en&a=1 .
jripard@timesofmalta.com