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VAT: Place of Supply of Services
by Kieran Kennelly

Under the new VAT place of supply of services rules - the general rule for the VAT treatment of a service provided by a supplier in one EU Member State to a customer in another (referred to as “a cross border supply”) is as follows:

“Business to Business” (“B2B”) Supplies

The service is supplied where the customer is located.

“Business to Customer” (“B2C”) Supplies

The service is supplied where the supplier is located.

For B2B supplies the supplier does not charge VAT and instead the business customer is required to “reverse charge” or self account for VAT.  For B2C supplies, the rules remain unchanged and the place of supply continues to be where the supplier is located.

There are a number of exceptions to the general rules some of which are a continuation of the old rules in place before 1 January 2010, for those specific services.  Any exceptions not specifically covered by a reverse charge will require a supplier to register and account for VAT in the Member State of supply. These include the following:

Restaurant and Catering Services

For B2B and B2C supplies, the place of supply is the Member State where the services are physically carried out.

Restaurant and Catering Services – On Board (For Consumption on Ships, Planes, Trains etc.)

The place of supply of services within the EU is the place of departure.

Land or Buildings – Related Services

The supply of services related to land or buildings continue to be treated as supplied in the country where the property is located whether B2B or B2C supplies. These include the services of estate agents, architects, site preparation, site supervision and the provision of hotel or guesthouse accommodation. 

Short Term Hiring of Means of Transport

Short term hiring of a means of transport for B2B or B2C is supplied where the means of transport is put at the disposal of a customer.

Intra Community and Transport of Goods

The general reverse charge rule applies for B2B services but the VAT on B2C supplies will be based on the place of departure of the goods.

Intermediary Services

An intermediary is any person who operates to facilitate any transaction or interaction between two other parties and can include agents.  For B2B intermediary services the general reverse charge rule applies but B2C services are VATable where the underlying transaction is supplied.

Cultural, Artistic, Sporting, Scientific, Educational, Entertainment and Similar Services

These continue to be VATable in the jurisdiction in which the services are physically carried out.

If you have any questions on the above or any other aspect of VAT, please contact Kieran Kennelly on kierank@parfreymurphy.ie or 021 4310266.

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