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Document Sample
Deemed IC supplies and
acquisitions
Non-transfers
Valuation of and work on movable
tangible property
Deemed IC supplies
2
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
3
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)
4
Transfer: example
MALTA Other EU MS
A = taxable person Premises of A
Move (transport) of goods from the A has to register for VAT purposes
stock of A in Malta to the stock of A in in the other Member State
another MS (without underlying
transaction
• (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
5
Non-transfers
6
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
7
No special compliance
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)
8 Eleventh Schedule)
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
9
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
Art. 6 VAT Act Item 17(3) Second Schedule
Simplification measures are possible (regulations)
Art. 6 VAT Act
Item 17(4) Second Schedule
10
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
11
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
12
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
13
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
14
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
15 • Person liable to pay VAT? N/A
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
16
(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 A has to register for VAT
After completion of the work, goods purposes in the other MS
are not going back to Malta
• (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
17
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? NO even if A
has to register for VAT purposes in the other MS for the service rendered
• Compliance: register of non-transfers (movements of goods)
18
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)
19
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
20
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
21
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
22
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
23
Deemed IC acquisitions
24
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
Art. 6 VAT Act Item 18(1)(b) and 18(2) Second Schedule
25
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)
26
Deemed intra-Community acquisition:
example
Other EU MS Malta
A = taxable person Premises of A
Move (transport) of goods from the A has to register for VAT
stock of A in the other MS to the stock of purposes in Malta
A in Malta (without underlying
transaction
• (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)
27
No deemed
IC acquisitions
28
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
29
No special compliance
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
30 bullet point : Item 1(j) Eleventh Schedule)
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
Art. 6 VAT Act Items 17(3) and 18(2) Second Schedule
Simplification measures are possible (regulations)
Art. 6 VAT Act
Item 17(4) Second Schedule
31
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)
32
• Person liable to pay VAT? N/A
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
33
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)
34
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
35
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)
36
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 hereafter
37
(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 A has to register for VAT
After completion of the work, goods purposes in Malta
are not going back to the other MS
• (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)
38
No deemed intra-Community
acquisition: example
Other EU MS Malta
A = taxable person A : service
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)
39
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
40
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)
41
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)
42
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
43
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
44
Valuation of and
work on movable
tangible property
45
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
46
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
47
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
48
Item 9 (2) Third Schedule
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)
Sixth Directive?
• 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)
49
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)
50
Valuation of and work on movable
tangible property – Question 5
PERSON LIABLE TO PAY MALTESE VAT
• Principle: the supplier
Art. 20 (1) (a) VAT Act
• 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 (2) (c) VAT Act Sixth Directive?
51
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
52
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
53 supplied
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
54
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
55
Questions?
56
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