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Capital Gain Tax on Real Estate

Social contributions

According to the comments of the decision of the Constitutional Council which has not censured the assignments of the social contributions, the capital gains tax returns of non-residents remains to be subject to social security contributions of 15.5%.

Social contributions

According to the comments of the decision of the Constitutional Council which has not censured the assignments of the social contributions, the capital gains tax returns of non-residents remains to be subject to social security contributions of 15.5%.

What's new ?

From 1st of January 2015, a new VAT legislation apply to telecommunication services, radio broadcasting and television, as well as e-services.

 

Review of the previous situation :

Companies based in the European Union who provide BtoC e-services bill with a single VAT rate : that of the country in which they are established. On the other hand, companies based outside of the European Union apply multiple VAT rates, as they bill the VAT applicable in the client's country.

What changes :

The focus of change is the place of taxation of the service because this is always taxed in the client's country. This rule applies just as much for professional clients, as it does for private clients. The place of establishment of the provider, whether inside or outside of the EU, is no longer important for the taxation of services. As a consequence, locating the client becomes essential for the vendor.

Furthermore, the use of Mini One Stop Shop (MOSS) is available to companies in the EU from the 1st of January 2015. They will be able to register for VAT in their country of establishment via this web portal. VAT will be declared in a single document which takes into consideration all the sales effected in all the countries where the provider has clients, and the provider will make only one payment (to their tax administration). But under the guise of wanting to simplify the process, this scheme still has several difficulties for its users, notably in combination with the other declarative obligations already in place.

Locating the client, a new issue :

Given the changes, the principal challenge for merchants of e-services will be to locate their clients in order to apply the correct VAT. In the light of the great mobility of clients and internet access which is becoming ever easier no matter where one finds oneself, this task is indeed more complex than it appears. How should, for example, a private German client (whose country of residence is Spain), who downloads musical content for his Smartphone during holidays in Finland and who uses a Spanish payment card be taxed ? Merchants of e-services will have to determine which measures to put into place in order to locate their clients, produce evidence and maintain this for audit purposes.

Prepare with the support of a complete diagnosis :

The change of legislation will necessitate the putting into place of new practices and processes, such as adaptations to information systems. In order to prepare you, TEVEA International can guide you in identifying all the consequences of the change with a compliance audit, which includes mapping of your operations and analysis of their VAT treatment, an analysis of the process of locating clients, our organisational recommendations on the subject of VAT, an analysis of your declarative obligations, as well as our operational recommendations to prepare you for the use of the Mini One Stop Shop.

Links to the European Commission :

Do not hesitate to contact us for any additional information by e-mail at mail@tevea.fr or by phone : +33 1 42 24 96 96.

The general information given in this document is not binding and TEVEA International shall not be liable for it. Furthermore, TEVEA International cannot be held responsible for changes in legislation and their effects.

From 1st of January 2015, a new VAT legislation apply to telecommunication services, radio broadcasting and television, as well as e-services.

 

Review of the previous situation :

Companies based in the European Union who provide BtoC e-services bill with a single VAT rate : that of the country in which they are established. On the other hand, companies based outside of the European Union apply multiple VAT rates, as they bill the VAT applicable in the client's country.

What changes :

The focus of change is the place of taxation of the service because this is always taxed in the client's country. This rule applies just as much for professional clients, as it does for private clients. The place of establishment of the provider, whether inside or outside of the EU, is no longer important for the taxation of services. As a consequence, locating the client becomes essential for the vendor.

Furthermore, the use of Mini One Stop Shop (MOSS) is available to companies in the EU from the 1st of January 2015. They will be able to register for VAT in their country of establishment via this web portal. VAT will be declared in a single document which takes into consideration all the sales effected in all the countries where the provider has clients, and the provider will make only one payment (to their tax administration). But under the guise of wanting to simplify the process, this scheme still has several difficulties for its users, notably in combination with the other declarative obligations already in place.

Locating the client, a new issue :

Given the changes, the principal challenge for merchants of e-services will be to locate their clients in order to apply the correct VAT. In the light of the great mobility of clients and internet access which is becoming ever easier no matter where one finds oneself, this task is indeed more complex than it appears. How should, for example, a private German client (whose country of residence is Spain), who downloads musical content for his Smartphone during holidays in Finland and who uses a Spanish payment card be taxed ? Merchants of e-services will have to determine which measures to put into place in order to locate their clients, produce evidence and maintain this for audit purposes.

Prepare with the support of a complete diagnosis :

The change of legislation will necessitate the putting into place of new practices and processes, such as adaptations to information systems. In order to prepare you, TEVEA International can guide you in identifying all the consequences of the change with a compliance audit, which includes mapping of your operations and analysis of their VAT treatment, an analysis of the process of locating clients, our organisational recommendations on the subject of VAT, an analysis of your declarative obligations, as well as our operational recommendations to prepare you for the use of the Mini One Stop Shop.

Links to the European Commission :

Do not hesitate to contact us for any additional information by e-mail at mail@tevea.fr or by phone : +33 1 42 24 96 96.

The general information given in this document is not binding and TEVEA International shall not be liable for it. Furthermore, TEVEA International cannot be held responsible for changes in legislation and their effects.

VAT focus

Since 1 January 2010, the procedure for the reimbursement of VAT borne in European Union countries has been made paperless in accordance with the provisions of Directive 2008/9/EC dated 12 February 2008.

Since then, companies established in the European Union have to submit their VAT reimbursement applications via an electronic tele-procedure portal made available to them by their respective national tax authorities.

This new procedure, which was intended to be a real simplification for businesses, at times becomes a source of difficulty in obtaining the refund of VAT paid abroad.

In effect, some European tax authorities have a reading and application of the EU laws which is too strict, leading sometimes to an effect contrary to the objective pursued by these texts.

By way of illustration, we can cite the German tax authorities who exclude invoices included in VAT reimbursement applications submitted via an electronic portal from VAT reimbursements for the sole reason that the full address of the supplier/invoice provider in question has not been correctly entered on the electronic portal even though the invoices are attached electronically to the application. For the German tax authorities, if a claimant, when submitting a refund claim, merely enters the town in which the provider who issued the invoice for which the claimant is asking the refund is based, then the VAT on that invoice cannot be reimbursed.

In order to justify this stance, the German tax authorities apply a literal and strict reading of articles 7 and 8 or the above directive.

These articles state that:

"Article 7

To obtain a refund of VAT in the Member State of refund, the taxable person not established in the Member State of refund shall address an electronic refund application to that Member State and submit it to the Member State in which he is established via the electronic portal set up by that Member State.

Article 8

2. In addition to the information specified in paragraph 1, the refund application shall set out, for each Member State of refund and for each invoice or importation document, the following details:

(a) name and full address of the supplier; [...]"

The question to ask is:

Is the German tax authority's decision not too restrictive with regard to the principle of VAT neutrality?

Our comments:

Obviously, a literal reading of articles 7 and 8 previously cited leads to the exclusion of invoices for which data entry on the portal was not completed from VAT reimbursements. It seems to us that this constitutes an additional administrative burden on taxpayers, thus taking us away from the simplification which should predominate with the introduction of the new reimbursement procedure.

In order to avoid any rejections solely on the grounds of form, the greatest care has to be taken in the preparation of applications and the use of an expert such as TEVEA International offers a number of guarantees.

In addition, we will not resign ourselves to enduring the authorities' manifestly excessive attitudes. European case-law can help us in this respect. On a number of occasions, the Court of Justice of the European Union has pointed out that the right of VAT deduction (reimbursement) is a fundamental right of taxpayers. The right to deduct VAT may not be called into question on the sole basis that the claimant has failed to comply with certain formal requirements when the substantive requirements have been satisfied.

The ECJ reminded us of this fundamental principle in the ECJ judgement, Case C-284/11 dated 12 July 2012, points 62 and 71, in these terms:

"[...] the fundamental principle of VAT neutrality requires deduction of input tax to be allowed if the substantive requirements are satisfied, even if the taxable person has failed to comply with some of the formal requirements. Where the tax authority has the information necessary to establish that the taxable person is, as the recipient of the supplies in question, liable to VAT, it cannot impose, in relation to the right of that taxable person to deduct that tax, additional conditions which may have the effect of rendering that right ineffective for practical purposes (see Ecotrade, paragraphs 63 and 64; Nidera Handelscompagnie, paragraph 42; and Case C 438/09 [2010] ECR I-14009, paragraph 35).

As is apparent from the case-law referred to in paragraph 62 of this judgement, the deduction of input VAT must, as a rule, be allowed if the substantive requirements are satisfied, even if the taxable person has failed to comply with some of the formal requirements. The case may be different if non-compliance with such formal requirements effectively prevents the production of conclusion evidence that the substantive requirements have been satisfied (see, by analogy, Case C 146/05 Collée [2007] ECR I 7861, paragraph 31)."

In our case, since the invoices are attached to the application, as required by the German tax authorities, the latter have at their disposal the necessary information for establishing the provider/supplier's identity. They therefore have all the elements needed to judge whether the substantive requirements have been satisfied.

Consequently, on the basis of this case-law, TEVEA International systematically contests any rejection delivered by the German tax authority on the basis previously described. The German tax authorities have not yet responded to the arguments that we have put forward, but we believe that the objective intended by the legislator cannot have been to put in place a VAT reimbursement system in which the act of forgetting to enter a postcode should be grounds for putting the right to VAT deduction into question.

If you have encountered a similar problem then please do not hesitate to contact us by e-mail at mail@tevea.fr or by phone : +33 1 42 24 96 96. We will consider together what solutions may be found.

This document can be downloaded, click here.

The general information given in this document is not binding and TEVEA International shall not be liable for it. Furthermore, TEVEA International cannot be held responsible for changes in legislation and their effects.

Since 1 January 2010, the procedure for the reimbursement of VAT borne in European Union countries has been made paperless in accordance with the provisions of Directive 2008/9/EC dated 12 February 2008.

Since then, companies established in the European Union have to submit their VAT reimbursement applications via an electronic tele-procedure portal made available to them by their respective national tax authorities.

This new procedure, which was intended to be a real simplification for businesses, at times becomes a source of difficulty in obtaining the refund of VAT paid abroad.

In effect, some European tax authorities have a reading and application of the EU laws which is too strict, leading sometimes to an effect contrary to the objective pursued by these texts.

By way of illustration, we can cite the German tax authorities who exclude invoices included in VAT reimbursement applications submitted via an electronic portal from VAT reimbursements for the sole reason that the full address of the supplier/invoice provider in question has not been correctly entered on the electronic portal even though the invoices are attached electronically to the application. For the German tax authorities, if a claimant, when submitting a refund claim, merely enters the town in which the provider who issued the invoice for which the claimant is asking the refund is based, then the VAT on that invoice cannot be reimbursed.

In order to justify this stance, the German tax authorities apply a literal and strict reading of articles 7 and 8 or the above directive.

These articles state that:

"Article 7

To obtain a refund of VAT in the Member State of refund, the taxable person not established in the Member State of refund shall address an electronic refund application to that Member State and submit it to the Member State in which he is established via the electronic portal set up by that Member State.

Article 8

2. In addition to the information specified in paragraph 1, the refund application shall set out, for each Member State of refund and for each invoice or importation document, the following details:

(a) name and full address of the supplier; [...]"

The question to ask is:

Is the German tax authority's decision not too restrictive with regard to the principle of VAT neutrality?

Our comments:

Obviously, a literal reading of articles 7 and 8 previously cited leads to the exclusion of invoices for which data entry on the portal was not completed from VAT reimbursements. It seems to us that this constitutes an additional administrative burden on taxpayers, thus taking us away from the simplification which should predominate with the introduction of the new reimbursement procedure.

In order to avoid any rejections solely on the grounds of form, the greatest care has to be taken in the preparation of applications and the use of an expert such as TEVEA International offers a number of guarantees.

In addition, we will not resign ourselves to enduring the authorities' manifestly excessive attitudes. European case-law can help us in this respect. On a number of occasions, the Court of Justice of the European Union has pointed out that the right of VAT deduction (reimbursement) is a fundamental right of taxpayers. The right to deduct VAT may not be called into question on the sole basis that the claimant has failed to comply with certain formal requirements when the substantive requirements have been satisfied.

The ECJ reminded us of this fundamental principle in the ECJ judgement, Case C-284/11 dated 12 July 2012, points 62 and 71, in these terms:

"[...] the fundamental principle of VAT neutrality requires deduction of input tax to be allowed if the substantive requirements are satisfied, even if the taxable person has failed to comply with some of the formal requirements. Where the tax authority has the information necessary to establish that the taxable person is, as the recipient of the supplies in question, liable to VAT, it cannot impose, in relation to the right of that taxable person to deduct that tax, additional conditions which may have the effect of rendering that right ineffective for practical purposes (see Ecotrade, paragraphs 63 and 64; Nidera Handelscompagnie, paragraph 42; and Case C 438/09 [2010] ECR I-14009, paragraph 35).

As is apparent from the case-law referred to in paragraph 62 of this judgement, the deduction of input VAT must, as a rule, be allowed if the substantive requirements are satisfied, even if the taxable person has failed to comply with some of the formal requirements. The case may be different if non-compliance with such formal requirements effectively prevents the production of conclusion evidence that the substantive requirements have been satisfied (see, by analogy, Case C 146/05 Collée [2007] ECR I 7861, paragraph 31)."

In our case, since the invoices are attached to the application, as required by the German tax authorities, the latter have at their disposal the necessary information for establishing the provider/supplier's identity. They therefore have all the elements needed to judge whether the substantive requirements have been satisfied.

Consequently, on the basis of this case-law, TEVEA International systematically contests any rejection delivered by the German tax authority on the basis previously described. The German tax authorities have not yet responded to the arguments that we have put forward, but we believe that the objective intended by the legislator cannot have been to put in place a VAT reimbursement system in which the act of forgetting to enter a postcode should be grounds for putting the right to VAT deduction into question.

If you have encountered a similar problem then please do not hesitate to contact us by e-mail at mail@tevea.fr or by phone : +33 1 42 24 96 96. We will consider together what solutions may be found.

This document can be downloaded, click here.

The general information given in this document is not binding and TEVEA International shall not be liable for it. Furthermore, TEVEA International cannot be held responsible for changes in legislation and their effects.

VAT refund in Serbia

According to a recent circular, Serbia allows VAT reimbursement for foreign companies established in countries which have signed a reciprocal agreement.

List of countries which are concerned :

  • Germany (since 1st of july 2013)
  • Netherlands
  • Denmark
  • Austria
  • Belgium
  • Slovakia
  • Slovenia (only for trade fair)
  • Croatia (only for trade fair)
  • Bosnia and Herzegovina
  • Montenegrins
  • Macedonia

Deadline to forward the claim : 30th of the year following the date of invoice.

Minimum VAT amount : 200 EUR.

Other conditions : invoices in compliance with Serbian invoicing rules and proofs of payment are requested.

Normal rate of VAT in Serbia : 20%.

IMPORTANT : Having a local tax representative is not requested to claim the VAT back in Serbia, and there is no need to be VAT registered in Serbia.

According to a recent circular, Serbia allows VAT reimbursement for foreign companies established in countries which have signed a reciprocal agreement.

List of countries which are concerned :

  • Germany (since 1st of july 2013)
  • Netherlands
  • Denmark
  • Austria
  • Belgium
  • Slovakia
  • Slovenia (only for trade fair)
  • Croatia (only for trade fair)
  • Bosnia and Herzegovina
  • Montenegrins
  • Macedonia

Deadline to forward the claim : 30th of the year following the date of invoice.

Minimum VAT amount : 200 EUR.

Other conditions : invoices in compliance with Serbian invoicing rules and proofs of payment are requested.

Normal rate of VAT in Serbia : 20%.

IMPORTANT : Having a local tax representative is not requested to claim the VAT back in Serbia, and there is no need to be VAT registered in Serbia.

Yacht rentals in France : ending of VAT exemption

Since July 15th 2013, companies operating yachts in France must collect the French VAT (19.6%). For further information, click here.

***** New premises *****

Since April 1th 2013, our new adress in Paris is :

29-31 rue Saint-Augustin

75002 - PARIS

Since April 1th 2013, our new adress in Paris is :

29-31 rue Saint-Augustin

75002 - PARIS

Capital gain tax on real estate

TEVEA International may be appointed as an accredited property French tax representative, according to article 244bis A of the CGI regarding capital gains realised on the sale of real estate or equivalent by private persons or corporations non resident in France.

 

TEVEA International may be appointed as an accredited property French tax representative, according to article 244bis A of the CGI regarding capital gains realised on the sale of real estate or equivalent by private persons or corporations non resident in France.

 

Online assistance on VAT matters

Try our Online assistance service and get a quick answer from TEVEA's experts on all your VAT issue ....

Try our Online assistance service and get a quick answer from TEVEA's experts on all your VAT issue ....

Need a VAT registration in a European country ?

TEVEA International can handle everything on your behalf and offers tax representation solutions customised according to your restrictions and duties. Please contact us.

 

Capital Gain Tax on Real Estate - Social contributions as of 2016, January 1st
What's new ? - VAT rules applicable to e-commerce from 2015 January 1st
VAT focus - Find out more on why refund claims in Germany are turned down and the rules governing the form of VAT refund claims onto the electronic portal.
VAT refund in Serbia - Serbia allows VAT reimbursement for foreign companies established in countries which have signed a reciprocal agreement.
Yacht rentals in France : ending of VAT exemption - What changes are involved by the new regulation ?
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