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European VAT On Providing Services

Published: 24.01.2018 |

Tags:

#Accounting #VAT

The companies which have customers in the European countries have to determine the state in which their income is subject to VAT and related consequences with respect to the indirect tax. The supply of “services” is defined as something that is not a “commodity”. Each supply of services should be analyzed in the light of the rules of the place of delivery in order to ensure the right accounting of VAT by the right person in the proper jurisdiction. It is especially important on making global sales that may lead to VAT obligations, and the rules of the place of delivery are the starting point for this. As in the case of goods, there are different rules for determining the place of delivery (as well as, accordingly, the place of their taxation) for the services provided to the business (B2B) and services to the end user (B2C). As a general rule, the provision of B2B services is taxed at the location of the client. In this case, the customer must provide the VAT number to the service provider, otherwise such a transaction is considered as B2C. If the client is a resident of a third country (not EU Member State) and does not have a European VAT number, he must provide...

Unblocking Tax Invoices: Will It Be the Same for Everyone?

Published: 17.01.2018 |

Tags:

#Tax disputes #Tax planning

Before New Year, our legislators traditionally adopt and publish numerous changes in the tax legislation. The change from 2017 to 2018 was no exception. Thus, on December 7, 2017, the Law of Ukraine No.2245-VII “On Amending the Tax Code of Ukraine and Certain Legislative Acts of Ukraine on Ensuring the Balance of Budget Revenue in 2018” was adopted and officially published on December 30, 2017 (newspaper “Golos Ukrainy” No.248 (6753) dated December 30, 2017). The Law provides for the numerous changes in the tax legislation. The most expected change for business, perhaps, was the abolition of the “blocking” of tax invoices from January 1, 2018, at least until March 1, 2018. It became possible in connection with the exclusion of clause 74.2, article 74, of the Tax Code of Ukraine, which provided for the continuous automated monitoring of tax invoices and adjustment calculations for compliance with the criteria for the risk assessment sufficient to stop the registration of such tax invoices/adjustment calculations. In addition, paragraph 201.16 Art. 201 of the Tax Code of Ukraine has also been amended, according to which (new edition) “registration of a tax...

Rules for Choosing the Place of Taxation On Selling Goods

Published: 10.01.2018 | blog

Tags:

#VAT

The next issue, which we suggest to figure out during the consideration of the European VAT system, is the place of taxation on delivering goods. This issue is decisive for the companies that have a large number of counterparties in Europe, when planning their trading activities. The EU Directive 2006/112 /EU defines different rules for determining the place of taxation for each type of transactions: supply of goods intra-Community acquisition of goods importation of goods supply of services For the supply of goods, VAT is levied at the place of delivery depending both on the way of supply and the nature of the goods themselves: If the goods are not sent or transported, the place of taxation will be the location of the goods at the time of delivery. For example, if an Austrian company after renting a car in Austria from a German company decides to purchase this machine, Austria will be the place of delivery, and VAT will apply in Austria. If the goods are dispatched/transported by the supplier, the customer or a third person, the place of delivery (and accordingly the taxation) will be the country where the goods were at the beginning of the dispatch/transportation. For...

Legal Regulation of ICO in Different Countries

Published: 28.12.2017 |

Tags:

#Cryptocurrency #ICO #ICO

Earlier in our articles, we have already considered what Initial Coin Offering is. However, we remind that the Initial Coin Offering (ICO) is a popular method among start-ups and other companies to raise capital. Investors participate in the collection of financial resources by transferring funds to the issuer in official currencies such as dollar, euro, yuan, etc. or in cryptocurrencies, for example, Bitcoins or Ethers, in exchange for digital tokens (Tokens, electronic coins). It is Tokens that confirm the rights of the holder to receive profit or the fulfillment of obligations on the part of the issuer. In addition, Tokens can be used to pay for services/goods of the issuing company. In contrast to the initial public offering (IPO), usually Tokens do not represent an ownership interest or receipt of dividends from the issuing company. Investors who participate in the ICO often expect to profit from the development of the activities of the company in the future, or play at increasing the value of Tokens (probably the brightest example at the moment is the rise in the price of Bitcoin). Like all cryptocurrencies, Tokens are based on Blockchain (distributed ledger technology,...

Single Judicial Information and Telecommunication System (SJITS) within the Framework of the Code of Administrative Court Procedure

Published: 26.12.2017 |

Tags:

#Tax disputes #Taxes

It’s not a secret for anyone that in order to protect your rights and protected interests, in the event of a tax dispute, taxpayers apply to the district administrative courts. Since December 15, 2017, the procedure of appeal and the consideration procedure in the district administrative courts has changed significantly, in connection with the entry into force of the new edition of the Code of Administrative Court Procedure of Ukraine. The number of novels that appeared in the new edition of the Code is quite significant. In this article, I would like to provide an overview of such an innovation in administrative procedure as the Single Judicial Information and Telecommunication System. Article 18 of the Code of Administrative Court Procedure of Ukraine defines the tasks that are imposed on the Single Judicial Information and Telecommunication System (hereinafter - the System): registration of documents entering the court (which may be the subject of litigation); determination of the judge(s) for the consideration of the case; exchange of documents (sending and receiving documents) in electronic form between the courts, between the court and the participants to the legal...

Obtaining Licenses by Companies Working with Cryptocurrencies on the Isle of Man

Published: 20.12.2017 |

The Isle of Man shows considerable activity with respect to cryptocurrencies: everyone is interested in digital currencies and is discussing what benefits they can bring to the island. So, the government of the Isle of Man shows that it is entirely open to such a novelty and even offers the opportunity for residents to pay taxes using Bitcoins. The Commission on Financial Supervision of the Isle of Man reacted very quickly to the revitalization of the sphere and brought promptly the rules for preventing the laundering of funds obtained by criminal means in line with the development of the industry. Thus, the government shows its desire not to burden this developing sphere with regulation. In 2015, the amendments were made to the legislation of the Isle of Man, according to which the Financial Services Commission (hereinafter referred to as the Commission) should monitor the compliance of laundering laws by the companies that operate in the field of cryptocurrencies. On October 26, 2015, the amendments to the Companies Act, which carry out certain types of activities (registration and supervision issues) (The Designated Businesses (Registration and Oversight) Act 2015) came into...

Why is the EU VAT System Necessary and How it Works

Published: 18.12.2017 |

Данным блогом мы начинаем серию публикаций, посвященных европейскому НДС, который так интересует наших клиентов. Неудивительно, ведь он имеет большое значение для ведения бизнеса в ЕС. Поскольку тема очень обширная, обсуждать ее будем поэтапно. И начнем мы с рассмотрения сути и назначения системы НДС, а также общих понятий и правил. On posting this blog, we are starting a series of publications on the topic of the EU VAT which is so interesting for our customers. It is not surprising, as it is important for doing business in the EU. As the topic is very extensive, we will discuss it step by step. Let’s start with considering the essence and purpose of the VAT system, as well as the general concepts and rules. The idea of the European VAT is that enterprises could trade within the EU without being registered as a VAT payer in each individual union country. The rules of the EU VAT are quite complicated,...

From “paradise” to “black list”. EU has approved a new list of offshore jurisdictions

Published: 07.12.2017 |

On Tuesday, at the meeting of the Ministers of Finance of the European Union, the long-awaited list of low-tax countries which included 17 countries was approved. This list was finally approved at the meeting in Brussels on December 4, 2017 after 10 months of investigation and two years of struggle for obtaining national support from the EU countries. So, the black list of offshore states of the EU includes: American Samoa, Barbados, Bahrain, Grenada, Guam, Macau, Marshall Islands, Mongolia, Namibia, Palau, Panama, UAE, Samoa, Saint Lucia, Trinidad and Tobago, Tunisia, and South Korea. It is noteworthy that the British Overseas Territories such as the Cayman Islands and Bermuda are not included in the black list, even though they have been in the previous list of June 2015. The methodology for identifying countries in the list of 2015 was strictly criticized, which resulted in the need to refuse from the old list and replace it with a new one. At the same time, real activity is directed to 47 countries that have been included in the so-called “gray list” and promise to amend their taxation rules in order to bring them in line with EU requirements, and also to cooperate more in...

European Regulatory Authorities Publish ICO Hazard Notifications

Published: 29.11.2017 |

Tags:

#Bitcoin #Investments #Legislation

ICO (Initial coin offering) is a form of attracting investments in the form of selling a fixed number of new units of cryptocurrency, received with a single or accelerated emission. In the middle of November, the European financial regulators, including ESMA (the European Securities and Markets Authority), the Belgian FSMA (the Financial Services and Markets Authority) and the Dutch AFM (the Authority for the Financial Markets), issued warnings about risks for the investors and rules applicable to the companies participating in the ICO. The market of so-called cryptocurrencies has heated up. The approximate total market capitalization of all cryptocurrencies has increased from $ 18 billion in early 2017 to staggering $ 200 billion by the time of writing this article. Needless to say, some people were worried about this hype, and not only the European financial regulators. ICO is the key concept of cryptocurrency as a type of “crowdsale” (“crowd” and “sale”) where the project developers offer a new type of cryptocurrency (also called “token” or “coin”) using the distributed ledger technology. Cryptocurrency can acquire various characteristics based on the...

Next changes in the criteria for risk assessment

Published: 21.11.2017 |

At the beginning of November 2017, we have already analyzed the draft proposed by the Ministry of Finance of Ukraine on amending Order No.567 of 13.06.2017 “On approval of the criteria for risk assessment sufficient to suspend the registration of tax invoice/adjustment calculation in the Unified Register of Tax Invoices” (hereinafter - Criteria). At present, the changes to the criteria have been made and entered into force on November 17, 2017. They are approved by the Order of the Ministry of Finance No.926 of 09.11.2017 and registered with the Ministry of Justice of Ukraine under No.138/31250 on November 13, 2017. It should be noted that the changes that have been made and their project differ significantly from each other. The experts of Finance Business Service have been considering the essence of the latest innovations and how they will affect the business. First, the clause 3 of the Criteria is set out in a new version, namely in the part that concerns the automatic recording of the information by the monitoring system, submitted by the taxpayer in the prescribed form. As for the payers, agricultural commodity producers, automatic accounting of information is carried...

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