VAT TREATMENT SERVICES PART 1

1
VAT TREATMENT SERVICES(PART 1)
2
Overview

• Definition
• Place of supply of services
• Person liable to pay VAT

3
Definition
4
Definition

• 1. DEFINITION
• What is a supply of services?
• A supply of services means a supply that is not
  a supply of goods

Art. 6 (a) VAT Act Item 1 (b) Second Schedule
5
Definition

• 1. DEFINITION
• What is a supply of services?
• Where a supply includes the provision of both
  goods and services and the consideration for that
  supply does not distinguish between the
  consideration for the goods and the services, the
  supply shall be treated as a supply of goods or
  as a supply of services according to the
  principal nature of that supply.

Item 9 (2) Second Schedule
6
Definition

• 1. DEFINITION
• What is a supply of services in the scope of
  VAT?
• The supply should be made by a taxable person
  (other than a taxable person registered under
  art. 11 VAT Act) in the course or furtherance of
  an economic activity (see basic question nr. 1).
• The supply should be made for a consideration.

Remark apart from the above, a supply of
services will only be subject to Maltese VAT if
additionally the supply is made in Malta and is
not explicitly exempt by a provision in the VAT
Act or the Schedules
7
Definition

• 2. EXAMPLES OF SERVICES
• Examples mentioned in Second, Third and Fifth
  Schedule
• Private use of goods forming part of an economic
  activity provided input VAT was wholly or partly
  deducted (self-supply)

Item 15 Second Schedule
Attention self-supply by exempt person! Not
subject to VAT!
8
Definition

• 3. ARE NOT SUPPLIES OF SERVICES
• Examples
• Intangible goods (e.g. trademarks, ) transferred
  in the frame of a transfer of a going concern
• Warranty repairs (i.e. repairs made under
  product guarantee obligations)

Item 16 Second Schedule
9
Place of supply Person liable to pay VAT
10
VAT treatment of services

• IMPORTANCE OF THE PLACE OF AN OPERATION

In case an operation is not deemed to take place
on the Maltese territory no Maltese VAT is due!
11
VAT treatment of services

• IMPORTANCE OF THE PERSON LIABLE TO PAY VAT

The person liable to pay VAT has to pass on the
VAT due to the VAT Department!
12
VAT treatment of services

• Overview
• Services relating to immovable property
• Valuation and work on movable tangible property
• Transport (including intra-Community transport of
  goods)
• Ancillary services with respect to
  intra-Community transports of goods
• Intermediary services related to intra-Community
  transports of goods and to ancillary services in
  this respect
• Intangible services and related intermediary
  services
• Telecommunications and electronically supplied
  services
• Other intermediary services

13
Place of supply of services
The provisions of the Third Schedule determine
the place of supply of services
Art. 7 VAT Act
14
Place of supply of services General rule

• GENERAL RULE
• Place of establishment of the supplier

Item 5 Third Schedule
The general rule is applicable whenever no
specific place of supply rule or exception is
applicable to a supply of services!
15
Place of supply of services General rule

• GENERAL RULE
• Examples
• Restaurant services
• (Pure) management services

16
Place of supply of services General rule

• GENERAL RULE
• Example
• A Maltese company (registered under art. 10 VAT
  Act) provides (pure) management services to its
  Belgian subsidiary

Belgian subsidiary
Maltese company
Management services
17
VAT treatment of services

• GENERAL RULE
• Solution
• Taxable person YES
• Operation in the scope of VAT YES
• Place of supply Malta (Item 5 Third Schedule
  where the supplier is established)
• Exemption NO
• Person liable to pay VAT the Maltese company
  (Art. 20 (1) (a) VAT Act)

18
Services relating to immovable property

• 1. EXAMPLES
• E.g.
• Construction works
• The services related to an immovable property of
  a.o. an architect, an estate agent or expert, a
  valuer or an appraiser
• On site supervision on construction works
• Repair and maintenance services related to
  immovable property

19
Services relating to immovable property

• 1. EXAMPLES
• E.g.
• Immovable letting (including an emphyteutical
  grant not exceeding 50 years)
• The provision of accommodation

20
Services relating to immovable property

• 2. PLACE OF SUPPLY
• A supply of services in connection with immovable
  property takes place where the immovable property
  is situated

Art. 7 VAT Act Item 6 Third Schedule
21
Services relating to immovable property

• 3. 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
22
Services relating to immovable property

• Example
• A Maltese company A, which is established and
  registered under art. 10 VAT Act in Malta,
  carries on construction works (i.e. the
  construction of an office building) in Malta for
  a Maltese company B registered under art. 10 VAT
  Act

Maltese company A
Maltese company B
Office building in Malta
23
Services relating to immovable property

• Solution
• Taxable person YES
• Operation in the scope of VAT YES
• Place of supply Malta (Item 6 Third Schedule
  where immovable property is situated)
• Exemption NO
• Person liable to pay VAT the Maltese company A
  (Art. 20 (1) (a) VAT Act)

24
Services relating to immovable property

• Example
• A UK company A, which is not established and not
  registered under art. 10 VAT Act in Malta,
  carries on construction works (i.e. the
  construction of an office building) in Malta for
  a Maltese company B registered under art. 10 VAT
  Act

UK company A
Maltese company B
Office building in Malta
25
Services relating to immovable property

• Solution
• Taxable person YES
• Operation in the scope of VAT YES
• Place of supply Malta (Item 6 Third Schedule
  where immovable property is situated)
• Exemption NO
• Person liable to pay VAT the Maltese company B
  (Art. 20 (2) (c) VAT Act)

26
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

27
Valuation of and work on movable tangible property

• EXAMPLES WORK ON MOVABLE TANGIBLE PROPERTY
• The maintenance of movable tangible property
• The repair of movable tangible goods
• The cleaning of movable tangible goods
• The packaging and repackaging of movable tangible
  goods (except if it relates to a transport of
  goods)
• Contracting work (except construction works)

28
Valuation of and work on movable tangible property

• EXAMPLES VALUATION OF MOVABLE TANGIBLE PROPERTY
• The assessment of damage to a movable tangible
  good (e.g. by a surveyor)
• The determination of the value of a movable
  tangible good

29
Valuation of and work on movable tangible
property Questions 1 2

• TAXABLE PERSON AND OPERATION IN THE SCOPE OF VAT
• Taxable person (other than a taxable person
  registered under art. 11 VAT Act)
• A supply of services, made for a consideration by
  the above-mentioned taxable person

Art. 4 (1) (a) VAT Act
Art. 4 (1) (a) and 6 (a) VAT Act Item 1 (b)
Second Schedule
30
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
31
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
32
Valuation of and work on movable tangible
property Question 3

• PLACE OF SUPPLY - REMARKS
• Customer is free to choose (1) whether or not and
  (2) which VAT identification number he
  communicates to the supplier!
• The VAT identification number needs to have a
  country code as prefix
• In Malta
• A VAT registration under article 10 VAT Act
• A VAT registration under article 12 VAT Act

NOT a VAT registration under art. 11 VAT Act!!!
33
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?
34
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)

35
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?
36
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
37
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

38
Record of sent goods

• 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
39
Record of sent goods

• 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

40
Valuation of and work on movable tangible property

• Example 1
• A Danish company B purchases repair services for
  a facsimile used in his sales office in Valetta.
  A, a Maltese company registered under art. 10 VAT
  Act, performs the repair services at the premises
  of the Danish company in Valetta.

41
Valuation of and work on movable tangible property

• Example 1

Denmark
Malta
Supply of services
B
A
B
42
Valuation of and work on movable tangible property

• Solution
• Taxable person YES
• Operation in the scope of VAT YES
• Place of supply Malta (Item 9 (1) Third Schedule
  where the service is physically carried out)
• Exemption NO
• Person liable to pay VAT the Maltese company A
  (Art. 20 (1) (a) VAT Act)

43
Valuation of and work on movable tangible property

• Example 2
• A Maltese company B repairs television sets for
  a hotel A established in Italy. A sends the
  television sets from Italy to Malta, where B
  carries out the repairs. After the repairs are
  finished, the goods are sent back to A in Italy.
  In this respect, A provides B with its Italian
  VAT identification number.

44
Valuation of and work on movable tangible property

• Example 2

Italy
Malta
Movement of goods
A
B
A provides B his IT VAT number
B performs service
45
Valuation of and work on movable tangible property

• Solution
• Taxable person YES
• Operation in the scope of VAT YES
• Place of supply Italy (Item 9 (2) Third Schedule
  MS VAT identification number)
• Exemption N/A
• Person liable to pay VAT N/A

46
Valuation of and work on movable tangible property

• Remark
• How is the physical movement of the television
  sets qualified in the head of the Italian company?

No deemed IC acquisition in Malta (compare item
17 (2) (e) Second Schedule)
47
Valuation of and work on movable tangible property

• Example 3
• An Italian company B repairs television sets for
  a hotel A established in Malta. A sends the
  television sets from Malta to Italy, where B
  carries out the repairs. After the repairs are
  finished, the goods are sent back to A in Malta.
  In this respect, A provides B with its Maltese
  VAT identification number.

48
Valuation of and work on movable tangible property

• Example 3

Malta
Italy
Movement of goods
A
B
A provides B his MT VAT number
B performs service
49
Valuation of and work on movable tangible property

• Solution
• Taxable person YES
• Operation in the scope of VAT YES
• Place of supply Malta (Item 9 (2) Third Schedule
  MS VAT identification number)
• Exemption NO
• Person liable to pay VAT the Maltese company A
  (Art. 20 (2) (c) VAT Act)

50
Valuation of and work on movable tangible property

• Remark
• How is the physical movement of the television
  sets qualified in the head of the Maltese company?

A non-transfer of goods (item 17 (2) (e) Second
Schedule)
51
Valuation of and work on movable tangible property

• Example 4
• An Italian company B repairs television sets for
  a hotel A established in Malta. A sends the
  television sets from Malta to Italy, where B
  carries out the repairs. After the repairs are
  finished, the goods are sent back to A in Malta.
  In this respect, A provides B with its Spanish
  VAT identification number.

52
Valuation of and work on movable tangible property

• Example 4

Malta
Italy
Movement of goods
A
B
A provides B his ES VAT number
B performs service
53
Valuation of and work on movable tangible property

• Solution
• Taxable person YES
• Operation in the scope of VAT YES
• Place of supply Spain (Item 9 (2) Third Schedule
  MS VAT identification number)
• Exemption N/A
• Person liable to pay VAT N/A

54
Valuation of and work on movable tangible property

• Remark
• How is the physical movement of the television
  sets qualified in the head of the Maltese company?

A non-transfer of goods (item 17 (2) (e) Second
Schedule)
55
Valuation of and work on movable tangible property

• Example 5
• A Maltese company A owns two hotels one in
  Malta and one in Belgium (A). The Maltese
  company is registered under art. 10 VAT Act in
  Malta.
• An Italian company B repairs television sets for
  A. A sends the television sets from Malta to
  Italy, where B carries out the repairs. After
  the repairs are finished, the goods are sent to
  A in Belgium. In the frame of the repair
  service, A provides B with its Maltese VAT
  identification number.

56
Valuation of and work on movable tangible property

• Example 5

A
Belgium
Malta
Italy
Movement of goods
A
B
A provides B his MT VAT number
B performs service
57
Valuation of and work on movable tangible property

• Solution
• Taxable person YES
• Operation in the scope of VAT YES
• Place of supply Malta (Item 9 (2) Third Schedule
  MS VAT identification number)
• Exemption NO
• Person liable to pay VAT the Maltese company A
  (Art. 20 (2) (c) VAT Act)

58
Valuation of and work on movable tangible property

• Remark
• How is the physical movement of the television
  sets from Malta to Italy qualified in the head of
  the Maltese company?

A transfer of goods (item 17 (2) Second
Schedule) Deemed (exempt) IC supply in Malta
The Maltese company has to VAT register in
Italy. Normally, transfer of repaired TV
sets From Italy to Belgium.
59
Transport services, incl. intra-Community
transport of goods

• DEFINITION
• An intra-Community transport of goods means a
  transport of goods where the place of departure
  and the place of arrival of the goods are
  situated within the territories of two different
  EU Member States
• The crossing of the territory of a non-EU country
  does as such not affect the qualification of the
  transport as an intra-Community transport of goods

Item 7 (6) (a) (i) Third Schedule
60
Transport services, incl. intra-Community
transport of goods

• DEFINITION
• The place of departure of the goods is the
  place where the transport of the goods actually
  starts
• The place of arrival of the goods is the place
  where the transport of the goods actually ends

Item 7 (6) (b) and (c) Third Schedule
61
Transport services, incl. intra-Community
transport of goods

• DEFINITION ASSIMILATED LOCAL TRANSPORT
• A local transport of goods (i.e. a transport of
  goods whereby the place of departure and the
  place of arrival of the goods are situated within
  the same EU Member State) is deemed to be an
  intra-Community transport of goods when it is
  directly linked to an intra-Community transport
  of goods
• This deemed intra-Community transport of goods
  can a.o. precede or follow the intra-Community
  transport of goods to which it is directly linked

Item 7 (6) (a) (ii) Third Schedule
62
Transport services, incl. intra-Community
transport of goods

• DEFINITION ASSIMILATED LOCAL TRANSPORT
• All three of the following conditions have to be
  met
• The local transport has to be a part of a larger
  intra-Community transport of goods
• The person carrying out the local transport of
  goods supplies its service either (1) to the
  person carrying out the core intra-Community
  transport of goods or (2) to the person that
  ordered the core intra-Community transport of
  goods and
• At the end of the local transport preceding or
  following the core intra-Community transport of
  goods, goods still have to be in the same state
  as they were at the moment of the start of the
  concerned local transport

63
Transport services, incl. intra-Community
transport of goods

• DEFINITION ASSIMILATED LOCAL TRANSPORT

ATTENTION A local transport of goods that is
deemed to be an intra-Community transport of
goods is subject to the same rules as a normal
intra-Community transport of goods!
64
Transport services, incl. intra-Community
transport of goods

• EXAMPLES
• A Maltese company transports for its customer
  goods from Rome (Italy) to Valetta

Italy
Malta
Rome
Valetta
IC transport of goods
65
Transport services, incl. intra-Community
transport of goods

• EXAMPLES
• A Maltese company A transports goods from Sliema
  to Valetta on demand of another Maltese company
  B, whereby B will subsequently transport the
  goods further on from Valetta to Marseille
  (France)

France
Malta
Sliema
Marseille
Valetta
IC transports of goods
66
Transport services, incl. IC transport of goods
Quest. 1 2

• TAXABLE PERSON AND OPERATION IN THE SCOPE OF VAT
• Taxable person (other than a taxable person
  registered under art. 11 VAT Act)
• A supply of services, made for a consideration by
  the above-mentioned taxable person

Art. 4 (1) (a) VAT Act
Art. 4 (1) (a) and 6 (a) VAT Act Item 1 (b)
Second Schedule
67
Transport services, incl. IC transport of goods
Question 3

• PLACE OF SUPPLY GENERAL RULE FOR TRANSPORT
• Where the transport takes place, having regard to
  the distances covered

Art. 7 VAT Act Item 7 (1) Third Schedule
68
Transport services, incl. IC transport of goods
Question 3

• PLACE OF SUPPLY IC TRANSPORT OF GOODS
• Principle in the Member State of departure

Art. 7 VAT Act Item 7 (2) first sentence Third
Schedule
69
Transport services, incl. IC transport of goods
Question 3

• PLACE OF SUPPLY IC TRANSPORT OF GOODS
• Exception where the service is rendered to a
  customer who communicates a VAT identification
  number (with prefix) of another EU Member State
  than the place of departure of the IC transport
  of goods, the service is deemed to take place in
  the Member State that granted the VAT
  identification number under which the service was
  rendered to the customer

Art. 7 VAT Act Item 7 (2) second sentence Third
Schedule
70
Transport services, incl. IC transport of goods
Question 3

• PLACE OF SUPPLY IC TRANSPORT OF GOODS - REMARKS
• Customer is free to choose (1) whether or not and
  (2) which VAT identification number he
  communicates to the supplier!
• The VAT identification number needs to have a
  country code as prefix
• In Malta
• A VAT registration under article 10 VAT Act
• A VAT registration under article 12 VAT Act

NOT a VAT registration under art. 11 VAT Act!!!
71
Transport services, incl. IC transport of goods
Question 4

• EXEMPTIONS (WITH CREDIT)
• (1) The international transport of persons the
  transport of luggage and motor vehicles
  accompanying passengers and the supply of
  services related to the international transport
  of passengers
• (2) The transport of goods from a third
  territory, where the value of this transport is
  included in the taxable value of the importation
  of those goods
• (3) The transport of goods which is directly
  connected with the export of those goods outside
  the Community

Art. 9 VAT Act and item 4, Part One, Fifth
Schedule
72
Transport services, incl. IC transport of goods
Question 4

• EXEMPTIONS (WITH CREDIT)
• (4)The transport of goods that are subject to a
  customs duty suspension regime
• (5) The intra-Community transport of goods
  effected to or from the islands composing the
  autonomous regions of Açores or Madera

Art. 9 VAT Act and item 4, Part One, Fifth
Schedule
73
Transport services, incl. IC transport of goods
Question 4

• EXEMPTIONS (WITH CREDIT)
• (a) transport by the scheduled bus service
• (b) scheduled inter-island sea transport of
  passengers by authorised carriers and other
  scheduled sea transport of passengers recognised
  by the Commissioner
• (c) school transport supplied by or to an
  educational establishment recognised by the
  Commissioner and school transport organised or
  supplied by a central office 
• (d) transport supplied or organised by an
  employer or by a central office to transport
  employees to and from their place of work and
  recognised by the Commissioner

Art. 9 VAT Act and item 11, Part One, Fifth
Schedule
74
Transport services, incl. IC transport of goods
Question 4

• EXEMPTION (WITHOUT CREDIT)
• The supply of transport services for sick,
  injured or disabled persons in vehicles specially
  designed for that purpose

Art. 9 VAT Act and item 11 (5), Part Two, Fifth
Schedule
75
Transport services, incl. IC transport of goods
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?
76
Transport services, incl. intra-Community
transport of goods

• Example 1
• A Maltese company A, registered under art. 10
  VAT Act, supplies transport services to a French
  company B. In this respect, A transports goods
  from Valetta to Paris. B provides his French VAT
  identification number to A.

77
Transport services, incl. intra-Community
transport of goods

• Example 1

Malta
France
Transport of goods
A
B
B provides A with his FR VAT number
A performs service
78
Transport services, incl. intra-Community
transport of goods

• Solution
• Taxable person YES
• Operation in the scope of VAT YES
• Place of supply France (Item 7 (2) second
  sentence Third Schedule MS VAT identification
  number)
• Exemption N/A
• Person liable to pay VAT N/A

79
Transport services, incl. intra-Community
transport of goods

• Example 2
• An Italian transporter A supplies transport
  services to a Maltese company B (registered under
  art. 10 VAT Act). In this respect, A transports
  goods from Rome to Valetta. B provides its
  Maltese VAT identification number to A.

80
Transport services, incl. intra-Community
transport of goods

• Example 2

Italy
Malta
Transport of goods
A
B
B provides A with his MT VAT number
A performs service
81
Transport services, incl. intra-Community
transport of goods

• Solution
• Taxable person YES
• Operation in the scope of VAT YES
• Place of supply Malta (Item 7 (2) second
  sentence Third Schedule MS VAT identification
  number)
• Exemption NO
• Person liable to pay VAT the Maltese company B
  (Art. 20 (2) (c) VAT Act)

82
Transport services, incl. intra-Community
transport of goods

• Example 3
• An Italian transporter A supplies transport
  services to a Maltese small undertaking B
  (registered under art. 11 VAT Act). In this
  respect, A transports goods from Genova (Italy)
  to Valetta. B provides its Maltese registration
  number to A.

83
Transport services, incl. intra-Community
transport of goods

• Example 3

Italy
Malta
Transport of goods
A
B
B provides A with his Maltese VAT number
A performs service
84
Transport services, incl. intra-Community
transport of goods

• Solution
• Taxable person YES
• Operation in the scope of VAT YES
• Place of supply Italy (Item 7 (2) first sentence
  Third Schedule MS of departure)
• Exemption N/A
• Person liable to pay VAT N/A

85
Transport services, incl. intra-Community
transport of goods

• Example 4
• An Italian transporter A supplies transport
  services to a Maltese company B (registered under
  art. 10 VAT Act). In this respect, A transports
  goods from Rome to Valetta. B provides its
  Portuguese VAT identification number to A.

86
Transport services, incl. intra-Community
transport of goods

• Example 4

Italy
Malta
Transport of goods
A
B
B provides A with his PT VAT number
A performs service
87
Transport services, incl. intra-Community
transport of goods

• Solution
• Taxable person YES
• Operation in the scope of VAT YES
• Place of supply Portugal (Item 7 (2) second
  sentence Third Schedule MS VAT identification
  number)
• Exemption N/A
• Person liable to pay VAT N/A

88
Transport services, incl. intra-Community
transport of goods

• Example 5
• A Portuguese company A supplies transport
  services to a Maltese company B, registered under
  art. 10 VAT Act. In this respect, A must
  transport goods from Lisbon (Portugal) to Sliema.
  B provides its Maltese VAT registration number
  to A.
• A subcontracts the transport from Valetta to
  Sliema to C, a Maltese company registered under
  art. 10 VAT Act. A provides his Portuguese VAT
  identification number to C.

89
Transport services, incl. intra-Community
transport of goods

• Example 5

Portugal
Malta
C performs service
C
A provides C with his PT VAT number
Transport of goods
Transport of goods
A
B
B provides A with his MT VAT number
A performs service
90
Transport services, incl. intra-Community
transport of goods

• Solution A-B
• Taxable person YES
• Operation in the scope of VAT YES
• Place of supply Malta (Item 7 (2) second
  sentence Third Schedule MS VAT identification
  number)
• Exemption NO
• Person liable to pay VAT the Maltese company B
  (Art. 20 (2) (c) VAT Act)

91
Transport services, incl. intra-Community
transport of goods

• Solution C-A
• Taxable person YES
• Operation in the scope of VAT YES (deemed IC
  transport of goods!)
• Place of supply Portugal (Item 7 (2) second
  sentence Third Schedule MS VAT identification
  number)
• Exemption N/A
• Person liable to pay VAT N/A

92
Services ancillary to an intra-Community
transport of goods Questions 1 2

• DEFINITION AND EXAMPLES
• Services ancillary to an intra-Community
  transport of goods are services consisting of
  e.g. loading, unloading, handling, weighing,
  sorting, storing, of goods that relate to an
  intra-Community transport of goods or to a deemed
  IC transport
• The services ancillary to an intra-Community
  transport of goods must normally be supplied
  either
• (1) to the person carrying out the
  intra-Community transport of goods or
• (2) to the person that ordered the
  intra-Community transport of goods

93
Services ancillary to an intra-Community
transport of goods Questions 1 2

• EXAMPLES
• A Maltese company A transports for its customer
  goods from Sliema to Rome. The transport is made
  by truck from Sliema to Valetta and by ship from
  Valetta to Rome. When goods arrive in Valetta A
  asks B, another Maltese company to unload the
  truck and to put the goods on a ship.

Italy
Malta
Sliema
Rome
Valetta
B unloads truck and loads ship
94
Services ancillary to an intra-Community
transport of goods Question 3

• PLACE OF SUPPLY
• Principle where the services are physically
  carried out

Art. 7 VAT Act Item 7 (3) first sentence Third
Schedule
95
Services ancillary to an intra-Community
transport of goods Question 3

• PLACE OF SUPPLY
• Exception where the service is rendered to a
  customer who communicates a VAT identification
  number (with prefix) of another EU Member State
  than the one where the services are physically
  carried out, the ancillary service is deemed to
  take place in the Member State that granted the
  VAT identification number under which the service
  was rendered to the customer

Art. 7 VAT Act Item 7 (3) second sentence Third
Schedule
96
Services ancillary to an intra-Community
transport of goods Question 3

• PLACE OF SUPPLY REMARKS
• Customer is free to choose (1) whether or not and
  (2) which VAT identification number he
  communicates to the supplier!
• The VAT identification number needs to have a
  country code as prefix
• In Malta
• A VAT registration under article 10 VAT Act
• A VAT registration under article 12 VAT Act

NOT a VAT registration under art. 11 VAT Act!!!
97
Services ancillary to an intra-Community
transport of goods Question 4

• EXEMPTIONS (WITH CREDIT)
• (1)The supply of services used for the transport
  of goods that are subject to a customs duty
  suspension regime and relating to the loading,
  unloading, transhipment, handling, stowage,
  weighing, measuring, control, valuation, storage,
  supervision or delivery
• (2) The ancillary services to an intra-Community
  transport of goods effected to or from the
  islands composing the autonomous regions of
  Açores or Madera

Art. 9 VAT Act and item 4, Part One, Fifth
Schedule
98
Services ancillary to an intra-Community
transport of goods Question 4

• EXEMPTIONS (WITH CREDIT)
• Sea vessels services for the direct needs of
  these vessels or their cargo
• Aircraft services for the direct needs of these
  aircraft or their cargo

Art. 9 VAT Act and item 6 (5) and item 7 (5),
Part One, Fifth Schedule
99
Services ancillary to an intra-Community
transport of goods 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?
100
Services ancillary to an intra-Community
transport of goods

• Example 1
• A Maltese company A, only registered for VAT
  purposes in Malta (art. 10 VAT Act), transports
  for its customer goods from Rome to Sliema. The
  transport is made by ship from Italy to Valetta
  and by truck from Valetta to Sliema. When goods
  arrive in Malta A asks B, another Maltese company
  registered under art. 10 VAT Act, to unload the
  ship and to put the goods on a truck for
  transport to Sliema.

101
Services ancillary to an intra-Community
transport of goods

• Example 1

Italy
Malta
B
B performs service (ancillary services)
Valetta
A
Customer
Movement of goods
102
Services ancillary to an intra-Community
transport of goods

• Solution
• Taxable person YES
• Operation in the scope of VAT YES
• Place of supply Malta (Item 7 (3) first sentence
  Third Schedule where the service is physically
  carried out)
• Exemption NO
• Person liable to pay VAT the Maltese company B
  (Art. 20 (1) (a) VAT Act)

103
Services ancillary to an intra-Community
transport of goods

• Example 2
• A Maltese company A, registered under art. 10
  VAT Act, supplies transport services to a French
  company B. In this respect, A transports goods
  from Valetta to Paris (France). The transport is
  made by ship from Valetta to Marseille (France)
  and by truck from Marseille to Paris. B provides
  A with his French VAT identification number.
• In Marseille, upon request of A, a French
  company C unloads the ship and puts the goods on
  a truck. A provides his Maltese VAT
  identification number to C.

104
Services ancillary to an intra-Community
transport of goods

• Example 2

Malta
France
C performs service
C
A provides C with his MT VAT number
Unloading/loading of goods in Marseille
Movement of goods
A
B
B provides A with his FR VAT number
A performs service
105
Services ancillary to an intra-Community
transport of goods

• Solution A-B
• Taxable person YES
• Operation in the scope of VAT YES (IC transport
  of goods)
• Place of supply France (Item 7 (2) second
  sentence Third Schedule MS VAT identification
  number)
• Exemption N/A
• Person liable to pay VAT N/A

106
Services ancillary to an intra-Community
transport of goods

• Solution C-A
• Taxable person YES
• Operation in the scope of VAT YES (service
  ancillary to an IC transport of goods)
• Place of supply Malta (Item 7 (3) second
  sentence Third Schedule MS VAT identification
  number)
• Exemption NO
• Person liable to pay VAT the Maltese company A
  (Art. 20 (2) (c) VAT Act)

107
Services ancillary to an intra-Community
transport of goods

• Example 3
• An Italian transporter A supplies transport
  services to a Maltese company B (registered under
  art. 10 VAT Act). In this respect, A transports
  goods from Genova (Italy) to Sliema. The
  transport is made by ship from Italy to Valetta
  and by truck from Valetta to Sliema. B provides
  his Italian VAT identification number to A.
• When goods arrive in Malta A asks C, another
  Maltese company, to unload the ship and to put
  the goods on a truck. A provides his Italian VAT
  identification number to C.

108
Services ancillary to an intra-Community
transport of goods

• Example 3

Italy
Malta
C performs service
C
A provides C with his IT VAT number
Unloading/loading of goods in Valetta
Movement of goods
A
B
B provides A with his IT VAT number
A performs service
109
Services ancillary to an intra-Community
transport of goods

• Solution A-B
• Taxable person YES
• Operation in the scope of VAT YES (IC transport
  of goods)
• Place of supply Italy (Item 7 (2) first sentence
  Third Schedule MS of departure)
• Exemption N/A
• Person liable to pay VAT N/A

110
Services ancillary to an intra-Community
transport of goods

• Solution C-A
• Taxable person YES
• Operation in the scope of VAT YES (service
  ancillary to an IC transport of goods)
• Place of supply Italy (Item 7 (3) second
  sentence Third Schedule MS VAT identification
  number)
• Exemption N/A
• Person liable to pay VAT N/A

111
Intermediary services re. IC transport of goods
or ancillary services Q 1 2
Item 11, Second Schedule

• DEFINITION
• Intermediary services mean services carried out
  by a disclosed agent. A disclosed agent (i.e. a
  broker or a mandatory not an independent agent)
  is an intermediary acting on behalf of and for
  the account of another person (i.e. the
  principal). The supplies for which the
  intermediary intervenes are deemed to be made by
  that other person. The service of the
  intermediation itself is a supply of services
  made by the intermediary to its principal.
• The intermediary services have to relate to an
  intra-Community transport of goods or ancillary
  services thereto.

112
Intermediary services re. IC transport of goods
or ancillary services Q 1 2

• EXAMPLE RE. IC TRANSPORT OF GOODS
• A Maltese company A has to transport for its
  customer goods from Rome to Valetta. A calls
  upon B, another Maltese company, to find him a
  person that could carry out the transport from
  Rome to Valetta. B, as an intermediary acting in
  the name of and on behalf of A, contacts C, an
  Italian company, in order to get the job done.
  Subsequently, C carries out the ordered transport
  of the goods.
• The transport of the goods from Rome to Valetta
  (for which B intervened as the intermediary of A)
  is a supply of services directly from C to A
  (i.e. an intra-Community transport of goods).
• B will only charge A for his intermediary
  services related to the intra-Community transport
  of goods.

113
Intermediary services re. IC transport of goods
or ancillary services Q 1 2

• EXAMPLE RE. IC TRANSPORT OF GOODS

B performs service (intermediary services re. IC
transport of goods)
Italy
Malta
C
B
C performs service (IC transport of goods)
A
Customer
Movement of goods
A performs service (IC transport of goods)
114
Intermediary services re. IC transport of goods
or ancillary services Q 1 2

• EXAMPLE RE. ANCILLARY SERVICES
• A Maltese company A has to transport for its
  customer goods from Rome to Sliema. The
  transport will be made by ship from Italy to
  Valetta and by truck from Valetta to Sliema. A
  calls upon B, another Maltese company, to find
  him a person that could carry out the unloading
  of the ship and the loading of a truck. B, as an
  intermediary acting in the name of and on behalf
  of A, contacts C, a Maltese company, in order to
  get the job done. When goods arrive in Malta C
  unloads the ship and puts the goods on a truck.
• The unloading/loading (for which B intervened as
  the intermediary of A) is a supply of services
  directly from C to A (i.e. services ancillary to
  an IC transport of goods).
• B will only charge A for his intermediary
  services re. the unloading and loading.

115
Intermediary services re. IC transport of goods
or ancillary services Q 1 2

• EXAMPLE RE. ANCILLARY SERVICES

B performs service (intermediary services re.
ancillary service)
Italy
Malta
C
B
C performs service (ancillary service)
Valetta
Movement of goods
A
Customer
A performs service (IC transport of goods)
116
Intermediary services re. IC transport of goods
or ancillary services Q 3

• PLACE OF SUPPLY RE. IC TRANSPORT OF GOODS
• Principle the intermediary services take place
  in the Member State of departure of the
  underlying IC transport of goods

Art. 7 VAT Act Item 7 (4) first sentence Third
Schedule
117
Intermediary services re. IC transport of goods
or ancillary services Q 3

• PLACE OF SUPPLY RE. IC TRANSPORT OF GOODS
• Exception where the intermediary service is
  rendered to a customer (i.e. the principal) who
  communicates a VAT identification number (with
  prefix) of another EU Member State than the one
  where the underlying IC transport of goods
  starts, the intermediary service is deemed to
  take place in the Member State that granted the
  VAT identification number under which the service
  was rendered to the customer (i.e. the principal)

Art. 7 VAT Act Item 7 (4) second sentence Third
Schedule
118
Intermediary services re. IC transport of goods
or ancillary services Q 3

• PLACE OF SUPPLY RE. ANCILLARY SERVICES
• Principle the intermediary services take place
  where the underlying ancillary services are
  physically carried out

Art. 7 VAT Act Item 7 (5) first sentence Third
Schedule
119
Intermediary services re. IC transport of goods
or ancillary services Q 3

• PLACE OF SUPPLY RE. ANCILLARY SERVICES
• Exception where the intermediary service is
  rendered to a customer (i.e. the principal) who
  communicates a VAT identification number (with
  prefix) of another EU Member State than the one
  where the underlying ancillary services are
  physically carried out, the intermediary service
  is deemed to take place in the Member State that
  granted the VAT identification number under which
  the service was rendered to the customer (i.e.
  the principal)

Art. 7 VAT Act Item 7 (5) second sentence Third
Schedule
120
Intermediary services re. IC transport of goods
or ancillary services Q 3

• PLACE OF SUPPLY REMARKS
• Customer (i.e. the principal) is free to choose
  (1) whether or not and (2) which VAT
  identification number he communicates to the
  supplier (i.e. the intermediary)!
• The VAT identification number needs to have a
  country code as prefix
• In Malta
• A VAT registration under article 10 VAT Act
• A VAT registration under article 12 VAT Act

NOT a VAT registration under art. 11 VAT Act!!!
121
Intermediary services re. IC transport of goods
or ancillary services Q 4

• EXEMPTION (WITH CREDIT)
• Intermediary services related to the following
  services
• Sea vessels services for the direct needs of
  these vessels or their cargo
• Aircraft services for the direct needs of these
  aircraft or their cargo

Art. 9 VAT Act and item 5, Part One, Fifth
Schedule
122
Intermediary services re. IC transport of goods
or ancillary services Q 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?
123
Intermediary services re. IC transport of goods
or ancillary services

• Example 1
• A Maltese taxable person A, only registered for
  VAT purposes in Malta (art. 10 VAT Act), has to
  transport for its customer goods from Valetta to
  Rome. The customer provides his Italian VAT
  identification number to A.
• A calls upon B, another Maltese company
  registered under art. 10 VAT Act, to find him a
  person that could carry out the transport from
  Valetta to Rome. B, as an intermediary acting in
  the name of and on behalf of A, contacts C in
  order to get the job done. Subsequently, C
  carries out the ordered transport of the goods.

124
Intermediary services re. IC transport of goods
or ancillary services

• Example 1

Italy
Malta
C
B performs service
B
C performs service
Movement of goods
A
Customer
Customer provides his IT VAT number to A
A performs service
125
Intermediary services re. IC transport of goods
or ancillary services

• Solution A-Customer
• Taxable person YES
• Operation in the scope of VAT YES (IC transport
  of goods)
• Place of supply Italy (Item 7 (2) second
  sentence Third Schedule MS VAT identification
  number)
• Exemption N/A
• Person liable to pay VAT N/A

126
Intermediary services re. IC transport of goods
or ancillary services

• Solution C-A
• Taxable person YES
• Operation in the scope of VAT YES (IC transport
  of goods)
• Place of supply Malta (Item 7 (2) first sentence
  Third Schedule MS of departure)
• Exemption NO
• Person liable to pay VAT the Maltese company C
  (art. 20 (1) (a) VAT Act)

127
Intermediary services re. IC transport of goods
or ancillary services

• Solution B-A
• Taxable person YES
• Operation in the scope of VAT YES (intermediary
  service re. IC transport of goods)
• Place of supply Malta (Item 7 (4) first sentence
  Third Schedule MS of departure)
• Exemption NO
• Person liable to pay VAT the Maltese company B
  (art. 20 (1) (a) VAT Act)

128
Intermediary services re. IC transport of goods
or ancillary services

• Example 2
• An Italian transporter A transports goods from
  Rome to Sliema for a Maltese company B,
  registered under art. 10 VAT Act. The transport
  is made by ship from Italy to Valetta and by
  truck from Valetta to Sliema. B provides his
  French VAT identification number to A.
• A calls upon C, a Maltese company registered
  under art. 10 VAT Act, to find him a person that
  could carry out the unloading of the ship and to
  put the goods on a truck. C, as an intermediary
  acting in the name of and on behalf of A,
  contacts D, a Maltese company registered under
  art. 10 VAT Act, in order to get the job done.
  When goods arrive in Valetta, D unloads the ship
  and puts the goods on a truck. A is VAT
  registered in Italy and also in Malta under art.
  10 VAT Act. In the case at hand, A chooses to
  provide his Maltese VAT identification number to
  C and his Italian VAT identification number to D.

129
Intermediary services re. IC transport of goods
or ancillary services

• Example 2

Italy
Malta
D performs service
D
A provides his IT VAT number to D
C performs service
C
A provides his MT VAT number to C
Movement of goods
B
A
B provides his FR VAT number to A
A performs service
130
Intermediary services re. IC transport of goods
or ancillary services

• Solution A-B
• Taxable person YES
• Operation in the scope of VAT YES (IC transport
  of goods)
• Place of supply France (Item 7 (2) second
  sentence Third Schedule MS VAT identification
  number)
• Exemption N/A
• Person liable to pay VAT N/A

131
Intermediary services re. IC transport of goods
or ancillary services

• Solution D-A
• Taxable person YES
• Operation in the scope of VAT YES (service
  ancillary to an IC transport of goods)
• Place of supply Italy (Item 7 (3) second
  sentence Third Schedule MS VAT identification
  number)
• Exemption N/A
• Person liable to pay VAT N/A

132
Intermediary services re. IC transport of goods
or ancillary services

• Solution C-A
• Taxable person YES
• Operation in the scope of VAT YES (intermediary
  service re. ancillary service to an IC transport
  of goods)
• Place of supply Malta (Item 7 (5) first sentence
  Third Schedule where the ancillary service is
  physically carried out)
• Exemption NO
• Person liable to pay VAT the Maltese company C
  (art. 20 (1) (a) VAT Act)