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VAT Package Adopted - Major Changes to the VAT System from 1 January 2010
The law implementing the so-called "VAT package" was passed on 10 November 2009. This law implements a number of directives into the Luxembourg VAT legislation. Taxand Luxembourg sets out the changes made to the VAT system.
The directives are as follows:
- council Directive 2008/8/EC of 12 February 2008 amending Directive 2006/112/EC regarding the place of supply of services
- council Directive 2008/9/EC of 12 February 2008 laying down detailed rules for the refund of VAT, provided for in Directive 2006/112/EC, to taxable persons not established in the Member State in which a refund is due, but established in another Member State
- council Directive 2008/117/EC of 16 December 2008 amending Directive 2006/112/EC on the common system of VAT to combat tax evasion connected with intra-Community transactions.
In addition, the following Grand-Ducal Decrees were published on 7 December 2009:
- grand-Ducal Decree dated 1 December 2009 in relation to the reporting requirements for transactions in EU sales listings as well as to the filing deadlines for these documents
- grand-Ducal Decree dated 1 December 2009 with respect to the request for the refund of Luxembourg VAT for foreign EU taxable persons
- grand-Ducal Decree dated 1 December 2009 with respect to the request for the refund of Luxembourg VAT for taxable persons established outside the EU
- grand-Ducal Decree dated 1 December 2009 with respect to the declaration and payment of VAT
- grand-Ducal Decree dated 1 December 2009 with respect to administrative obligations of taxable persons regarding VAT registration and obligations in case of modification/cessation of activities.
As a reminder, the VAT package brings major changes to the VAT system. These changes are applicable from 1 January 2010 and can be summarised as follows:
- new rules regarding the place of supply of services
- enhanced cooperation between Member States
- additional compliance obligations for intra-EU supplies of services
- simplified procedure for claiming foreign VAT refunds.
The legislative changes triggered by the VAT package also have consequences on invoicing requirements, VAT registration obligations and administrative procedures. The consequences of the new rules must be analysed on a case-by-case basis.
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