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In a recent development, the United Arab Emirates (UAE) Cabinet of Ministers introduced Cabinet Resolution No. (91) of 2023, implementing a domestic reverse charge mechanism for electronic devices.
This resolution takes effect on 25 August 2023, and brings about changes in the way electronic devices are supplied and accounted for in the UAE.
Electronic devices, as defined in the resolution, encompass mobile phones, smartphones, computers, tablets, and their associated parts and components.
The application of the reverse charge mechanism hinges on specific conditions that must be met.
This reverse charge mechanism applies when:
This decision took effect from 30 October 2023.
As such, businesses involved in electronic device supply, be it for resale or production, should act proactively to align their processes and adapt their accounting and reporting systems accordingly.
By doing so, they can ensure seamless compliance with these new provisions, avoid discrepancies, and ultimately maintain the efficiency of their business operations.
If you have any queries about the UAE reverse charge, or UAE tax matters in general, then please get in touch.
On 6 October 2023, Legal Notice 231 was published by the Maltese government.
The Notice amended the Eighth Schedule of the Value Added Tax Act in Malta (Chapter 406 of the Laws of Malta).
Broadly, this amendment introduced a reduced VAT rate of 12% for specific services
The Notice transposes paragraph 5 of Article 105a of Council Directive 2006/112/EC, as amended by Council Directive (EU) 2022/542 in April 2022.
This obliges Member States to provide detailed rules for applying reduced rates, not lower than 12%, to specific transactions by October 7, 2023.
The Eighth Schedule of the VAT Act in Malta specifies the tax rates for particular supplies and imported goods, offering a reduction from the standard rate of 18%.
With the publication of this Legal Notice, four new services are included, all subject to the reduced VAT rate of 12%.
The newly introduced services are as follows:
The implementation of the 12% VAT rate will become effective from January 1, 2024.
The MTCA is expected to release further details on its application in the coming weeks.
If you have any queries about this new Malta VAT rate, or Maltese tax matters in general, then please get in touch.
On 6 October 2023, Legal Notice 231 (“The Notice”) was published by the Maltese government.
The Notice amended the Eighth Schedule of the Value Added Tax Act in Malta (Chapter 406 of the Laws of Malta).
Broadly, this amendment introduced a reduced VAT rate of 12% for specific services.
Let’s look at the reasons behind the Notice and where the changes might apply.
The Notice transposes paragraph 5 of Article 105a of Council Directive 2006/112/EC, as amended by Council Directive (EU) 2022/542 in April 2022.
This obliges Member States to provide detailed rules for applying reduced rates, not lower than 12%, to specific transactions by October 7, 2023.
The Eighth Schedule of the VAT Act in Malta specifies the tax rates for particular supplies and imported goods, offering a reduction from the standard rate of 18%.
With the publication of this Legal Notice, four new services are included, all subject to the reduced VAT rate of 12%.
The newly introduced services are as follows:
The implementation of the 12% VAT rate will become effective from 1 January 2024.
The MTCA is expected to release further details on its application in the coming weeks.
If you have any queries about the Malta’s new VAT rate, Maltese tax, or tax matters in general then please get in touch.
In the world of professional football, player transfers are a common occurrence. These complex transactions often involve various parties, including agents who facilitate the transfer process.
One such case that garnered attention involved Sports Invest (SI), a prominent UK football agency, and the transfer of a Portuguese football player from a Portuguese club to an Italian club in 2016.
The transfer not only raised questions about the nature of services provided by SI but also shed light on the intricacies of value-added tax (VAT) regulations in international football transfers.
In this particular transfer, the Italian club paid SI, the agent, for their services, while the player himself was not required to contribute financially.
However, the UK’s tax authority, His Majesty’s Revenue and Customs (HMRC), contended that SI provided services to the player worth €3 million, which should be subject to UK VAT.
Conversely, SI argued that the entire €4 million payment was for services rendered to the Italian club and should not be subject to UK VAT.
SI further claimed that even if the services were considered to be provided to the player, they should be classified as intermediary services and thus outside the scope of UK VAT.
To resolve the dispute, the UK First-tier Tribunal (FTT) carefully reviewed the contracts and supporting evidence presented by both parties.
After careful consideration, the FTT concluded that SI had indeed provided services to both the player and the Italian club.
However, the services rendered to the player were deemed to be made for no consideration, meaning they were provided free of charge. The FTT determined that the EUR4 million payment related exclusively to services provided to the Italian club and should be subject to VAT in Italy.
Moreover, the FTT agreed with SI’s argument that even if the services were provided to the player and related to the payment, they could still be regarded as intermediary services falling outside the scope of UK VAT.
This case serves as a reminder of the significance of maintaining accurate documentary evidence in the context of economic and commercial realities.
It underscores the importance of clear and detailed contracts that accurately reflect the nature and extent of services provided in football transfers. Such documentation becomes crucial when disputes arise and can greatly impact the VAT implications of the transaction.
Furthermore, it is important to note that this judgment is highly specific to the facts of the case and should not be considered a blanket rule for all similar scenarios. Given the potential wider implications of the untaxed consumption of agent services to players, it is likely that HMRC may choose to appeal the decision.
The outcome of such an appeal could significantly affect the sector, as the case highlights the importance of the party making the payment and the consideration involved. Had the player paid EUR1 million, even if reimbursed by the club, it would have constituted consideration moving from the player, triggering UK VAT liability under the intermediary rules.
The Sports Invest case demonstrates the intricate interplay between football player transfers, agent services, and VAT regulations. It underscores the necessity of thorough documentation and a clear understanding of the economic and commercial reality of the transactions involved.
As the football industry continues to evolve, it is crucial for all parties involved to stay abreast of regulatory requirements and seek professional advice to ensure compliance with VAT and other relevant tax laws.
If you have any queries relating to Sport Invest or tax matters in the UK or Italy more generally, then please do not hesitate to get in touch.
The content of this article is provided for educational and information purposes only. It is not intended, and should not be construed, as tax or legal advice. We recommend you seek formal tax and legal advice before taking, or refraining from, any action based on the contents of this article.