CRISTINA TRENTA

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CRISTINA TRENTAINTERNATIONELL MERVARDESSKATTERATT

COUNCIL IMPLEMENTING REGULATION 282/2011 IDENTIFIKATIONEN AV FAST ETABLERINGSSTALLE ENLIGT ARTIKEL 22

ÖREBRO UNIVERSITY – 27-28 NOVEMBER 2014

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WE ANALYZE ART. 22 OF 282/2011 HAVING THE AIM TO IDENTIFY THE

FIXED ESTABLISHMENT OF A CUSTOMER IN CASE OF A MULTIPLE

LOCATION

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WE USE A TELEOLOGICAL METHOD OF INTERPRETATION TO SEE IF THE

TEXT OF THE PROVISION IS COHERENT WITH THE AIM OF IDENTIFICATION OF ART. 22

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ART. 44 DIRECTIVE 2008/8/EC MOVES THE PLACE OF SUPPLY OF B2B SERVICES TO THE PLACE OF

ESTABLISHMENT OF THE CUSTOMER IN ACCORDANCE WITH THE NEW

PLACE OF SUPPLY RULES

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DIRECTIVE 2008/8/EC RECITAL 4 STATES THAT THE NEW PLACE OF SUPPLY RULES HAVE THE AIM OF

MINIMIZING BURDENS ON BUSINESSES

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A TELEOLOGICAL APPROACH LEADS TO CONSIDER THREE FOUNDATIONAL ELEMENTS

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EXPECTATION ASKS FOR LEGISLATION TO OUTLINE CLEARLY DEFINED RULES

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PRIORITIES IMPLY SIMPLE AND ACCESSIBLE LEGISLATION, EASY

TO COMPLY WITH

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AVOIDANCE IMPLIES SAID LEGISLATION SHOULD NOT BE

UNNECESSARILY BURDENSOME

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ART. 9 OF DIRECTIVE 2006/112/ECTAXABLE PERSON SHALL MEAN ANY

PERSON WHO, INDEPENDENTLY, CARRIES OUT IN ANY PLACE ANY

ECONOMIC ACTIVITY

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ART. 20 DEALS WITH A SINGLE LOCATION FOR TAXABLE CUSTOMERS

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BUT ART. 9 SAYS A TAXABLE PERSON CAN EXERCISE AN

ECONOMIC ACTIVITY IN ANY PLACE: A NUMBER OF DIFFERENT

STATES IS ALSO A POSSIBILITY

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WHAT THEN IF WE HAVE MULTIPLE LOCATIONS?

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ART. 21 AND 22 BOTH DEAL WITH THIS SITUATION

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21TH WHEREAS

IF A CUSTOMER IS ESTABLISHED IN MORE THAN ONE PLACE, THERE SHOULD BE RULES TO HELP THE

SUPPLIER DETERMINE THE CUSTOMER’S FIXED ESTABLISHMENT

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ART. 21 (1) STATES THAT IF THE TAXABLE PERSON IS ESTABLISHED IN MORE THAN ONE COUNTRY, THAT SUPPLY SHALL BE TAXABLE

IN THE COUNTRY WHERE THAT TAXABLE PERSON HAS

ESTABLISHED THEIR BUSINESS

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ART. 21 (2) STATES THAT WHERE THE SERVICE IS PROVIDED TO A FIXED

ESTABLISHMENT IN A PLACE OTHER THAN THAT WHERE BUSINESS HAS BEEN

ESTABLISHED, SUPPLIES ARE TAXABLE AT THE PLACE OF THE FIXED ESTABLISHMENT RECEIVING THAT SERVICE AND USING IT

FOR ITS OWN NEEDS

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ART. 22 HELPS IDENTIFYING THE CUSTOMER’S FIXED ESTABLISHMENT

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IT ESTABLISHES A PRINCIPAL CRITERION, A SET OF AUXILIARY

CRITERIA, AND A FALLBACK RULE

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ART. 22 (1)

IN ORDER TO IDENTIFY THE CUSTOMER’S FIXED ESTABLISHMENT

TO WHICH THE SERVICE IS PROVIDED, THE SUPPLIER SHALL

EXAMINE THE NATURE AND USE OF THE SERVICE PROVIDED

ART. 22(1) PRINCIPAL CRITERION

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IN ART. 22 (1) TERMINOLOGY AND CONCEPTS BECOME LESS CLEAR

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ART. 21 (2)

RECEIVING THAT SERVICE AND USING IT FOR ITS OWN

NEEDS

ART. 22 (1)

THE NATURE AND USE OF THE SERVICE

PROVIDED

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THIS HENDIADYS POSES PROBLEMSWHAT ABOUT IF THE NATURE OF THE SERVICE IS NOT CONSISTENT WITH THE USE OF THAT SERVICE?

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AN EXAMINATION OF THE NATURE OF THE SERVICE IS NOT A DIFFICULT

INTERPRETATION FOR THE SUPPLIER

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THE RULE AIMS AT SOLVING HOW TO LOCATE THE PLACE OF SUPPLY IN

CASE OF MULTIPLE FIXED ESTABLISHMENTS

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AND HERE USE MIGHT BECOME FUNDAMENTAL FOR THE FINAL

ASSESSMENT

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BUT HOW SHOULD WE PROCEED?

WHICH PERSPECTIVE SHOULD BE GIVEN MORE WEIGHT? THE

CUSTOMER’S OR THE SERVICE PROVIDER’S?

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WHAT IF CUSTOMER USE IS NOT STANDARD, BUT RATHER SOME

CUSTOMIZED USE FIT TO THE REAL NEEDS OF THEIR BUSINESS?

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IS IT POSSIBLE FOR THE PROVIDER TO KNOW THE REAL PURPOSE OF THE

OPERATION FROM THE SIDE OF THE CUSTOMER?

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NATURE AND USE IS A MUCH VAGUER EXPRESSION THAT RAISES

ISSUES OF INTERPRETATION

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IF ITS STANDARDIZED USE IS CONSISTENT WITH THE NATURE OF

THE SERVICE BUT THE CUSTOMIZED USE IS NOT, WHICH INTERPRETATION

SHOULD PREVAIL?

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ART. 59A OF THE VAT DIRECTIVE ON EFFECTIVE USE AND ENJOYMENT

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“In order to prevent double taxation, non-taxation or distortion of competition,

member states may consider the place of supply of any or all of those services, if

situated outside the community, as being situated within their territory if the

effective use and enjoyment of the services takes place within their territory”

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THE CONCEPT OF NATURE AND USE OF A SERVICE IN THE IMPLEMENTING

REGULATION DIFFERS FROM THE CONCEPT OF EFFECTIVE USE AND ENJOYMENT IN THE VAT DIRECTIVE

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NATURE AND USE OF A SERVICE IDENTIFYING THE FIXED

ESTABLISHMENT BASED ON THE SERVICE’S USE AND NATURE

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USE AND ENJOYMENT IDENTIFYING THE LOCATION OF

THE EFFECTIVE USE AND ENJOYMENT OF SAID SERVICE

WITHIN A STATE

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BOTH MAY LEAD TO DOUBLE OR NON-TAXATION AND BOTH MAY LEAD TO ABUSIVE PRACTICES

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A SECOND SET OF AUXILIARY CRITERIA IS ALSO PROVIDED

BY ART. 22

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“Where the nature and use of the service provided do not enable identification of the fixed establishment, the supplier shall pay attention to whether the contract, order

form and vat identification number issued by the member state of the customer, identify

the fixed establishment as the customer of the service and whether the fixed establishment is

the entity paying for the service”

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THE CONTRACT, THE ORDER FORM, THE VAT IDENTIFICATION NUMBER

AND THE METHOD OF PAYMENT WORK TOGETHER

THEY SHOULD COEXIST FOR THE ATTRIBUTION TO THE SERVICE TO

THAT FIXED ESTABLISHMENT

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THIS IS AN ASYNCHRONOUS SET OF TRANSACTIONS

THERE IS A TIME WHEN THE INVOICE IS ISSUED AND A TIME

WHEN IT IS THEN PAID

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AND THIS PRODUCES UNCERTAINTY

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FINALLY ART. 22 PROVIDES A FALLBACK RULE

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“Where the customer’s fixed establishment to which the service is provided cannot be determined (...) or where services covered

(…) are supplied to a taxable person under a contract covering one or more services used

in an unidentifiable and non-quantifiable manner, the supplier may legitimately

consider that the services have been supplied at the place where the customer

has established his business”

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THE FALLBACK RULE INTRODUCES A SIDE EFFECT WHICH WAS NOT

ORIGINALLY INTENDED BY THE IMPLEMENTING REGULATION

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AS THE RISK OF A NATIONAL TAX AUDIT IS BORN BY THE SUPPLIER,

THE FALLBACK RULE ALWAYS ALLOWS FOR A WAY OUT

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ART. 22 (2) STATES THAT ANY APPLICATION OF THE ARTICLE ITSELF SHOULD BE WITHOUT PREJUDICE TO

THE CUSTOMER’S OBLIGATIONS

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EACH PART OF THE TRANSACTION IS INDEPENDENT AS CONCERNING

THEIR VAT OBLIGATIONS THIS CAN DETERMINE DOUBLE TAXATION OR NON-TAXATION

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WE ALSO HAVE TIMING ISSUES

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ART. 25 ESTABLISHES THAT FOR THE APPLICATION OF THE RULES

GOVERNING THE PLACE OF SUPPLY OF SERVICES, ONLY THE

CIRCUMSTANCES EXISTING AT THE TIME OF THE CHARGEABLE EVENT SHALL BE TAKEN INTO ACCOUNT

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ANY SUBSEQUENT CHANGES TO THE USE OF THE SERVICE RECEIVED SHALL NOT AFFECT THE DETERMINATION OF

THE PLACE OF SUPPLY, PROVIDED THERE IS NO ABUSIVE PRACTICE

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TEMPUS REGIT ACTUM

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ART. 25 ORIGINATES FROM ART. 24 OF THE PROPOSAL FOR A COUNCIL

REGULATION COM. 672/2009

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IN THE END ART. 22 OF THE IMPLEMENTING REGULATION DOES

NOT MEET THE TELEOLOGICAL GOALS OF SIMPLIFICATION AND CLARITY

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EXPECTATION: LEGISLATION WITH CLEARLY DEFINED RULES

|LACK OF CLARITY: THERE ARE

AMBIGUOUS AND LAYERED RULES

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PRIORITIES: SIMPLE AND ACCESSIBLE LEGISLATION, AND EASY TO COMPLY

WITH|

INEFFECTIVE: DOESN'T ACHIEVE THE INTENDED POLICY AIM OF

SIMPLIFICATION AND MAY GENERATES NEGATIVE OUTCOMES

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AVOIDANCE: NOT UNNECESSARILY BURDENSOME

|INACCESSIBLE: LACK OF ADEQUATE

GUIDANCE

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IT MERELY GIVES UNCLEAR GUIDANCE IN DISTINGUISHING THE FIXED ESTABLISHMENT IN CASE OF MULTIPLE FIXED ESTABLISHMENTS

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RISKS OF DOUBLE TAXATION, NON-TAXATION, AND TAX AVOIDANCE ARE

STILL PRESENT

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THANK YOU

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