International & European VAT Consulting Services

While each member state can set its own standard and reduced VAT rates, they must adhere to the minimum thresholds established by the EU.

The EU has standardized the information that must be included on VAT invoices, ensuring consistency and transparency across member states.

The EU VAT system includes specific rules for cross-border transactions, such as the reverse charge mechanism for business-to-business (B2B) transactions and the destination principle for business-to-consumer (B2C) sales.

Businesses operating in multiple EU countries can benefit from simplified VAT registration and return filing procedures, such as the Mini One-Stop Shop (MOSS) scheme for digital services.

The EU has established mechanisms for cooperation and information exchange between tax authorities to ensure consistent enforcement of VAT rules and combat VAT fraud.

Deciding which VAT number to use can indeed be a complex issue, especially for businesses operating across multiple EU countries. Determining which VAT number to use for specific transactions can be confusing, especially when dealing with cross-border sales.

Different countries have different VAT registration requirements. Understanding when and where to register for VAT and which VAT number to use can be complicated.

Cross-Border Sales within the EU (B2C): When selling goods to individual consumers in other EU countries, you must charge and pay VAT according to the VAT rate of the destination country. This is in line with the EU’s destination principle for VAT.

Cross-Border Sales within the EU (B2B): For sales between businesses, the reverse charge mechanism often applies. In this case, the buyer is responsible for paying the VAT, and the seller does not charge VAT on the invoice. However, the buyer must account for the VAT on their VAT return.

Importing Goods from Non-EU Countries: When importing goods into the EU from non-EU countries, VAT is typically paid at the point of import. The importer is responsible for paying the VAT to the customs authorities based on the value of the goods, including any customs duties.

Digital Services to Consumers in the EU: If you’re providing digital services (e.g., e-books, online courses, software) to consumers in the EU, you must charge and pay VAT based on the customer’s location. This rule applies regardless of where your business is established.

Hiring Subcontractors: If you’re hiring subcontractors to provide services, you may need to pay VAT on their invoices, depending on the nature of the services and the VAT rules in your country.

Special Schemes: Certain industries or transactions may be subject to special VAT schemes. For example, the Tour Operators Margin Scheme (TOMS) applies to travel agents, and the Mini One-Stop Shop (MOSS) scheme applies to digital service providers.

Property Transactions: The sale or lease of commercial property can attract VAT. The rules vary by country, but generally, the sale of new buildings and land for commercial purposes is subject to VAT.

Exempt Financial Services: Certain financial services are exempt from VAT under EU law. These include the granting of credit (e.g., loans), the issue of shares and other securities, and the provision of financial guarantees. Determining whether a service falls under these exemptions requires careful analysis of the specific activities involved.

Mixed Supplies: Some transactions may involve a combination of taxable and exempt services, known as mixed supplies. For example, a bank may provide both taxable services (e.g., payment processing) and exempt services (e.g., granting a loan). In such cases, it’s crucial to allocate the consideration received between the taxable and exempt components to determine the correct VAT treatment.

Outsourced Services: When financial institutions outsource certain services, determining the VAT treatment can be challenging. The VAT liability may depend on whether the outsourced service is considered a supply of goods or services and whether it falls under any exemptions.

Digital Financial Services: The rise of fintech and digital financial services has introduced new complexities in VAT treatment. Determining whether these services are taxable or exempt requires staying up-to-date with evolving regulations and guidance from tax authorities.

Regulatory Alignment: Guiding governments through the process of aligning their VAT laws with EU directives, ensuring a smooth transition and compliance.

Policy Development: Assisting in the development of VAT policies and procedures that meet EU standards while addressing local economic considerations.

Implementation Support: Providing hands-on support for the implementation of new VAT systems, including training government officials and tax authorities.

Value Added Tax (VAT) Gap Estimation: Preparation a model to estimate and analyse the Value Added Tax (VAT) Gap according to IMF standards (International Monetary Fund’s Revenue Administration Gap Analysis Program). Design of the model and use it to produce VAT gap estimates. Overview and analyse the overall structure of the model, and how each of its components interacts. The model is based on inputs provided to compute the potential and actual VAT, which are compared to determine the VAT gap.

Tax Digitalization: Expert advice on designing and implementing VAT compliance measures with digital techniques, drawing from Hungary’s successful strategies. Detailed description and presentation of the Hungarian tax administration’s digital practice. Guidance on setting up online cash registers, real-time invoice reporting, consulting on platforms similar to Hungary’s eVAT and eInvoice systems to leverage Hungary’s technological advancements (focusing on real-time data capture, transparency, and compliance).

eVAT & eInvoicing Platforms: Expert advice on designing and implementing VAT compliance measures, drawing from Hungary’s successful strategies. Detailed description and presentation of the Hungarian practice. Guidance on setting up online cash registers, real-time invoice reporting, consulting on platforms similar to Hungary’s eVAT and eInvoice systems to leverage Hungary’s technological advancements (focusing on real-time data capture, transparency, and compliance).

Economic Impact Assessment: Analyzing the economic impact of the VAT gap on government budgets and public spending. This includes assessing how lost VAT revenues affect the provision of public goods and services, such as healthcare, education, and infrastructure.