EC sales lists
The measure
This measure is introduced as part of the changes to the place of supply of services rules. The changes are part of a long discussed EU wide initiative which is intended to ensure that, where possible, VAT is due in the country where services are consumed.
Currently businesses trading with other Member States only need to file EC Sales Lists ('ESLs') in respect of supplies of goods. This new measure introduces a requirement for UK businesses that supply services (where the place of supply of the services is the customer's country) to complete calendar quarterly ESLs.
The ESL will only relate to services on which the customer must complete a reverse charge calculation in their country. The ESL will need to include the VAT registration number of the customer and the total value of the services.
Who will be affected?
The measures will affect any UK business supplying services to business customers in other EU countries where the place of supply is the customer's country and the customer is required to account for VAT under the reverse charge procedure.
When?
The new ESL requirement will take effect on 1 January 2010.
The measures have been widely consulted on and reflect many of the concerns raised by businesses in the UK and around the EU.
The completion of ESLs for supplies of services does create an additional administrative burden both for businesses and the tax authorities. It is however felt to be necessary to combat inter EU VAT fraud and is therefore perhaps an inevitable burden.
There are likely to be teething problems in implementing the new ESL requirements, not least in adapting systems and processes for the new changes. As a result, although there is nothing surprising in the measures, affected businesses will need to give this their full focus before 1 January 2010.
