Deloitte warns platforms of EU tax nightmare 

deloitte

Incoming European tax legislation could cause a headache for UK platforms with non-UK citizen clients, who would be liable to pay VAT on providers’ services, consultants Deloitte has warned.

Daniel Lyons, partner at Deloitte, said platforms could fall under legislation set to come into force in January 2015.

Under the EU rules electronically supplied services would incur VAT in the country they were purchased in.

Lyons (pictured) said Deloitte strongly believed platform services would fit under the category of electronically supplied services, meaning clients who were not UK citizens would be liable to pay VAT for platform services, while UK citizens would not, due to an exemption.

‘This rule has been created to try to take the anomalies out of the tax system. The place of supply is now where the consumer is, not the supplier,’ he said.

‘We think platforms could be deemed to be within the rules. This means if you are a client of X platform based in the UK but you live in France, you would be subject to its rules, which is to charge VAT for platform services at the standard rate,’ said Lyons.

He said platforms would have a huge administrative task of registering for VAT in all the European member states.

The alternative was that platforms paid an aggregate of all the EU member states’ VAT, which HM Revenue & Customs would then pay out to each state, he said.

 

Source: citywire

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