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Deemed IC supplies and acquisitions Non-transfers Valuation of and work on movable tangible property. Deemed IC supplies. Transfer.

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Deemed IC supplies and acquisitions Non-transfers Valuation of and work on movable tangible property

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Deemed IC supplies and acquisitionsNon-transfersValuation of and work on movable tangible property


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Deemed IC supplies


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Transfer

The transfer by a taxable person of goods forming part of his economic activity to another Member State shall be treated as an intra-Community supply of goods for consideration

Goods shall be deemed to be transferred by a taxable person to another MS, if they are transported by or on his behalf from Malta to another MS for the purposes of his economic activity…

Art. 6 VAT Act

Item 17 Second Schedule


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Transfer: characteristics

  • Move from Malta to another Member State (without transaction)

  • By a taxable person (article 10, article 11, person only doing exempt without credit operations)

  • Of goods forming part of his economic activity

    =

  • Intra-Community supply

  • For consideration

All the rules related to intra-Community supplies are applicable mutatis mutandis including compliance (recapitulative statement)


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Transfer: example

MALTA Other EU MS

A = taxable person

Premises of A

Move (transport) of goods from the stock of A in Malta to the stock of A in another MS (without underlying transaction

A has to register for VAT purposes in the other Member State

  • (Deemed intra-Community) supply by a taxable person? YES

  • Supply in the scope of VAT (e.g. for consideration)? YES

  • Place of supply? In Malta (where transport begins)

  • Is there an exemption? Yes (if 2 conditions are fulfilled: (1) transport and (2) VAT number of the acquirer (A’) in the other MS)

  • Person liable to pay VAT? N/A


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Non-transfers


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Non-transfer

Goods shall not be deemed to be transferred if they are transported from Malta to another MS for the purposes of one of the following transactions: (1)

  • A supply with installation or assembly in the other MS

  • A supply of these goods, which constitutes a distance sale taxable in the other MS

  • A supply of these goods by or on behalf of the taxable person on board ships, aircraft and trains that takes place in the other MS

  • A supply of these goods that is treated as an intra-Community supply exempt from VAT, as a supply exempt from VAT for export… (see items 1 to 9 of the Fifth Schedule, Part One)

Art.6 VAT Act and item 17(2)(a,b,c and d) Second Schedule

No special compliance


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Non-transfer

… : (2)

  • the supply of services to the taxable person involving work on those goods physically carried out in the other MS provided the said goods are returned to that person in Malta on the completion of the said work

  • the temporary use of those goods in the other MS for the purpose of the supply of services by the taxable person if that person is established in Malta

  • the temporary use of those goods in the other MS for a period not exceeding twenty-four months if the importation of those goods into that State 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 non-transfers = Item 1(i) Eleventh Schedule)


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Non-transfer: temporary use with full exemption from import duties

  • Examples: temporary use of those goods in the other MS for a period not exceeding twenty-four months if the importation of those goods into that State for temporary use would qualify for a full exemption from import duties

    • Goods sent in the frame of a trade fair, exhibition…

    • Goods on trial (all goods): art. 16, §1er, b, Regulation EEC 3599/92 of 21/12/92

    • Goods on sight: precious stones, carpets and jewelleries, manufactured fur-skins (Art. 16, §1er, d, Regulation EEC 3599/92 of 21/12/92)

    • Forms of transport


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Non-transfer becomes a transfer

If a move of goods satisfies the conditions to be a non-transfer and if afterwards these conditions are no longer met, this non-transfer becomes a transfer with all the consequences

Simplification measures are possible (regulations)

Art. 6 VAT Act

Item 17(3) Second Schedule

Art. 6 VAT Act

Item 17(4) Second Schedule


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Non-transfer: example

MALTA Other EU MS

A = taxable person

Export by A

Move (transport) of goods from Malta to another MS in order to export these goods (in the framework of a transaction)

  • (Deemed intra-Community) supply by a taxable person? NO

  • BUT

  • Supply by a taxable person? YES

  • Supply in the scope of VAT? YES

  • Place of supply? In Malta (where transport begins)

  • Is there an exemption? YES (if goods are transported outside the EU)

  • Person liable to pay VAT? N/A


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Non-transfer: example

MALTA Other EU MS

A = taxable person

B

IC supply by A to B

  • (Deemed intra-Community) supply by a taxable person? NO

  • BUT

  • Supply by a taxable person? YES

  • Supply in the scope of VAT? YES

  • Place of supply? In Malta (where transport begins)

  • Is there an exemption? YES (if 2 conditions are fulfilled: (1) transport and (2) VAT number of the acquirer (B) in the other MS)

  • Person liable to pay VAT? N/A


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Non-transfer: example

MALTA Other EU MS

A = taxable person

B

Distance sale by A to B

  • (Deemed intra-Community) supply 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 ends)

  • Is there an exemption? N/A

  • Person liable to pay VAT? N/A


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Non-transfer: example

MALTA Other EU MS

A = taxable person

B

Supply with installation by A

  • (Deemed intra-Community) supply 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 goods are installed or assembled)

  • Is there an exemption? N/A

  • Person liable to pay VAT? N/A


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Non-transfer: example

MALTA Other EU MS

A = taxable person

B

Supply from A to B on board ships: place of departure in the other MS

  • (Deemed intra-Community) supply 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 (point of departure of transport of passengers)

  • Is there an exemption? N/A

  • Person liable to pay VAT? N/A


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Non-transfer: example

MALTA Other EU MS

A = taxable person

B : processing

Move of goods from Malta to the other MS in order to be processed

After completion of the work, goods are going back to Malta

  • (Deemed intra-Community) supply by a taxable person? NO

  • Compliance: register of non-transfers (movements of goods)

  • For service from B to A: see hereafter


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(Non)-transfer: example

MALTA Other EU MS

A = taxable person

B : processing

Move of goods from Malta to the other MS in order to be processed

After completion of the work, goods are not going back to Malta

A has to register for VAT purposes in the other MS

  • (Deemed intra-Community) supply by a taxable person? YES

  • Supply in the scope of VAT (e.g. for consideration)? YES

  • Place of supply? In Malta (where transport begins)

  • Is there an exemption? Yes (if 2 conditions are fulfilled: (1) transport and (2) VAT number of the acquirer (A’) in the other MS)

  • Person liable to pay VAT? N/A


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Non-transfer: example

MALTA Other EU MS

A = taxable person

A : service

Move of goods by A from Malta to the other MS in order to be used in the framework of a service made in the other MS

  • (Deemed intra-Community) supply by a taxable person? NOeven if A has to register for VAT purposes in the other MS for the service rendered

  • Compliance: register of non-transfers (movements of goods)


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Non-transfer: example

MALTA Other EU MS

A = taxable person

B : goods on trial

Move of goods by A from Malta to B in the other MS on trial

After trial (not satisfactory), goods are going back to Malta

  • (Deemed intra-Community) supply by a taxable person? NO

  • Compliance: register of non-transfers (movements of goods)


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Non-transfer followed by a transfer: example

MALTA Other EU MS

A = taxable person

B : goods on trial

Move of goods by A from Malta to B in the other MS on trial. After trial, goods are acquired by B


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Non-transfer followed by a transfer: example (continued) – No simplification

Operation 1 (no simplification in the other MS : transfer)

  • (Deemed intra-Community) supply in Malta by a taxable person? YES (from the moment goods are acquired by B). VAT registration of A in the other MS

  • Supply in the scope of VAT (e.g. for consideration)? YES

  • Place of supply? In Malta (where transport begins)

  • Is there an exemption? Yes (if 2 conditions are fulfilled: (1) transport and (2) VAT number of the acquirer (A’) in the other MS)

  • Person liable to pay Maltese VAT? N/A


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Non-transfer followed by a transfer: example (continued) – No simplification

Operation 2 (no simplification in the other MS : supply of goods to B)

  • Supply of goods by a taxable person? YES

  • Supply in the scope of VAT? YES

  • Place of supply? In the other MS (where goods are at the time they are put at the disposal of B)

  • Is there an exemption? N/A

  • Person liable to pay VAT? N/A


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Non-transfer (followed by a transfer): example (continued) - Simplification

Operation 1 and 2 (simplification in the other MS : movement of goods and supply of goods to B)

  • (Deemed intra-Community) supply in Malta by a taxable person? NO (from the moment goods are acquired by B)

  • Supply of goods by a taxable person? YES

  • Supply in the scope of VAT? YES (IC supply from Malta)

  • Place of supply? In Malta (where transport of the goods to B on trial began)

  • Is there an exemption? Yes (if 2 conditions are fulfilled: (1) transport and (2) VAT number of the acquirer B in the other MS)

  • Person liable to pay VAT? N/A


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Deemed IC acquisitions


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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


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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)


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Deemed intra-Community acquisition: example

Other EU MSMalta

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)


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No deemed

IC acquisitions


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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


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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)


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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


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No deemed intra-Community acquisition: example

Other EU MSMalta

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


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No deemed intra-Community acquisition: example

Other EU MSMalta

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


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No deemed intra-Community acquisition: example

Other EU MSMalta

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)


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No deemed intra-Community acquisition: example

Other EU MSMalta

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


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No deemed intra-Community acquisition: example

Other EU MSMalta

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)


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No deemed intra-Community acquisition: example

Other EU MSMalta

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 hereafter


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(No) deemed intra-Community acquisition: example

Other EU MSMalta

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)


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No deemed intra-Community acquisition: example

Other EU MSMalta

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)


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No deemed intra-Community acquisition: example

Other EU MSMalta

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


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No deemed ICA followed by a deemed ICA: example

Other EU MSMalta

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)


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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)


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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


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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


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Valuation of and

work on movable

tangible property


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Valuation of and work on movable tangible property

DEFINITION

  • Work on movable tangible property: all human and mechanical operations made to a movable tangible good. It concerns services consisting in a treatment to or a processing of movable tangible property

  • Valuation of movable tangible property: every act consisting in assessing the characteristics or appraising a movable tangible good


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Valuation of and work on movable tangible property – Question 3

PLACE OF SUPPLY

  • Principle: where the services are physically carried out

Art. 7 VAT Act

Item 9 (1) Third Schedule


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Valuation of and work on movable tangible property – Question 3

PLACE OF SUPPLY

  • Exception: in the Member State that granted the VAT identification number for the purpose of those services, if the following conditions are met:

    • The goods are transported out of the Member State where the services are physically carried out after having been processed; AND

    • The services are provided to customers that communicate a VAT identification number (with prefix) of another Member State than the Member state where the services are physically carried out

Item 9 (2) Third Schedule


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Valuation of and work on movable tangible property – Question 4

EXEMPTION

  • Work on movable goods acquired or imported for the purpose of undergoing such work within Malta, and transported outside the Community by or on behalf of either the supplier of the services or the customer (if the latter is not established within Malta) (Item 1 (3), Part One, Fifth Schedule)

  • International goods traffic: work on movable goods to be placed or placed under a customs duty suspension regime (Item 2 (2), Part One, Fifth Schedule)

Sixth Directive?


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Valuation of and work on movable tangible property – Question 4

EXEMPTION

  • Sea vessels: modification and maintenance (Item 6 (3), Part One, Fifth Schedule) and some other services for the direct needs of these vessels or their cargo (Item 6 (5), Part one, Fifth Schedule)

  • Aircraft: modification and maintenance (Item 7 (3), Part One, Fifth Schedule) and some other services for the direct needs of these aircraft or their cargo (Item 7 (5), Part One, Fifth Schedule)


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Valuation of and work on movable tangible property – Question 5

PERSON LIABLE TO PAY MALTESE VAT

  • Principle: the supplier

  • Exception: the customer under the following conditions:

    • The supplier is not established in Malta AND not registered under art. 10 VAT Act; and

    • The customer is established in Malta AND registered under art. 10 VAT Act

Art. 20 (1) (a) VAT Act

Art. 20 (2) (c) VAT Act

Sixth Directive?


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Record of received goods

  • When a supplier receives goods in Malta coming from another EU Member State to carry out a valuation of or works on tangible movable property, he has to keep a special record

Art. 48 VAT Act and item 1 (j)Eleventh Schedule


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Record of received goods

  • This record has to contain the following elements:

    • A sequential number

    • Date of receipt of the goods

    • Name, address and VAT number of the customer (if any)

    • Quantity and description of the goods received

    • Date of dispatch to the customer of the processed goods

    • Quantity and description of the dispatched goods

    • Quantity and description of the goods that are not sent back to the client

    • Date and reference to the documents issued related to the services supplied


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Record of sent goods (Register of non-transfers)

  • When the customer sends goods from Malta to another EU Member State to have a valuation of or works on tangible movable property carried out, he has to keep a special record.

Art. 48 VAT Act and item 1 (i)Eleventh Schedule


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Record of sent goods (Register of non-transfers)

  • This record has to contain the following elements:

    • a description of the goods;

    • their quantity;

    • their value;

    • their movements;

    • a description and the quantity of the goods not transported back; and

    • the date and the reference to the documents issued, if any, relating to these operations


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