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Dániel Sztankó, RSM Hungary, Head of Indirect Tax Services
Dániel Sztankó
ProfessionalTax

EU rulings on complex VAT cases – summary of the sub-group on crossborder rulings (CBR)

The Cross-Border Ruling (CBR) system intended to support preliminary decision making launched in June 2013 as a test case for 18-months under the framework of the EU VAT Forum was evaluated after one year.

In this document, I summarize the details of the system and the published rulings of the first year.

Cross-Border Rulings

In the CBR test case, businesses could request rulings regarding the VAT implications of cross-border transactions involving the participating member states. Rulings can currently be requested in 15 member states (Belgium, Cyprus, United Kingdom, Estonia, Finland, France, Netherlands, Latvia, Lithuania, Hungary, Malta, Portugal, Spain, Slovenia and Sweden).

Conditions of filing CBR requests:

  1. The request must relate to a complex VAT transaction that the business concerned intends to realize.
  2. The envisaged transaction must concern at least two member states participating in the CBR test case.
  3. The ruling request must be filed in a member state in which the requestant has a tax number or in a member state in which it can be assumed that the requestant will have a tax number in relation to the envisaged transaction.

In most cases the ruling requests have to be filed in the language of the member states concerned and/or in English (the Hungarian Tax and Customs Authority always asks for a Hungarian translation of the ruling request),presenting all relevant details of the transaction. If necessary, the tax authorities perform reconciliaitons before answering the request. The rules of the state receiving the request apply regarding the procedure (e.g. deadlines).

EU CBR rulings regarding VAT transactions between June 2013 and May 2014.

Based on approval from the businesses concerned, the member states published five CBR rulings (making sure that the businesses concerned cannot be identified). In the table below, I summarize the facts of each case, the question(s) and the answers confirmed in the rulings: 

Experiences, the future of Cross-Border Rulings

Non-participation of large member states, Germany in particular, is a sensitive issue as one of the conditions of issuing Cross-Border Rulings is that all of the member states concerned must participate in the system. Experience so far confirms that CRBs would provide substantial support for businesses with the publication of rulings and the standardization of procedures, deadlines in particular, and the development of the envisaged internet database of rulings. Confirmation of the VAT obligations relating to complex international transactions by tax authorities proved to be a good idea and the initiative closed a successful first year.

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    Dániel Sztankó, RSM Hungary, Head of Indirect Tax Services

    Dániel Sztankó

    Director, Indirect Tax services

    Dániel Sztankó has been the VAT expert of RSM Hungary Zrt., has supported the compliance of our fiscal representation team's clients in domestic and international VAT services since 2014. He was a manager at an international advisory network in Hungary specialising in VAT and indirect taxes from 2008 and then in Singapore from 2012, prior to which he had worked for a London based tax advisory firm. He began his professional career with the tax authority where he worked as a tax specialist in VAT for more than 5 years.
    As an advisor to global market players, he has focused on the regulation and application of European, Asian and international value-added taxes and indirect taxes for more than a decade. He has acquired experience in a number of sectors, such as energy, telecommunication, technology, logistics, pharmaceuticals, financial services, and real estate, both in Hungary and abroad. Beside consultations, Dániel is a regular lecturer of business and professional conferences focused on Hungarian VAT, online invoice reporting and EKAER legislation.

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