The Guardian’s headlines on VAT are beginning to irritate me.
Amazon might “make UK publishers pay 20% VAT“, but only if it sells a service to those publishers and in that case, it would probably be self-assessed by those publishers under the reverse charge mechanism. Regardless, it’s UK tax law that makes the publishers pay VAT.
Kronospan Mielec sp zoo v Dyrektor Izby Skarbowej w Rzeszowie (Case C-222/09): the ECJ confirmed that where R&D services carried out by engineers are supplied ‘on a contract basis for the benefit of a recipient established in another Member State’, they were ‘services of engineers’ and so the place of supply is the country in which their work is carried out, not the country from which they are supplied.
EMI Group plc v HMRC (ECJ Case C-581/08) – EMI were seeking clarification of whether they needed to account for VAT on sample CDs provided to promoters and media businesses; the particular question was over the VAT treatment that applied when they provided several CDs to one promoter. UK VAT law allows only the first sample given to someone to be VAT-free (as a supply not for consideration) so that, where several CDs were provided to a promoter for that promoter to pass on to contacts, HMRC wanted EMI to account for VAT on all except the first CD. The matter arrived at the Commissioners in 2004, who referred the question of what constitutes a sample to the ECJ.
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The VAT rules on the place of supply of services – which includes the transfer and licensing of intellectual property – are changing from January 1st, 2010. The practical effect of this is relatively limited for intellectual property, as the rules are changing to make the VAT implications for other services more closely aligned to the rules that already apply to intellectual property. The principal changes are the legislation references.
In RM Education plc v HM Revenue & Customs [2009] UKVAT V20911 (decision published 9 January 2009), the VAT Tribunal confirmed that exam marking software & associated services do not qualify for the VAT exemption for education.