Deemed IC supplies and acquisitions Non-transfers Valuation of and work on movable tangible property

1. Deemed IC supplies and acquisitionsNon-transfersValuation of and work on movable tangible property

2. Deemed IC supplies

3. Transfer The transfer by a taxable person of goods forming part of his economic activity to another Member State shall be treated as an intra-Community supply of goods for consideration Goods shall be deemed to be transferred by a taxable person to another MS, if they are transported by or on his behalf from Malta to another MS for the purposes of his economic activity… Art. 6 VAT Act Item 17 Second Schedule

4. Transfer: characteristics • Move from Malta to another Member State (without transaction) • By a taxable person (article 10, article 11, person only doing exempt without credit operations) • Of goods forming part of his economic activity = • Intra-Community supply • For consideration All the rules related to intra-Community supplies are applicable mutatis mutandis including compliance (recapitulative statement)

5. Transfer: example MALTA Other EU MS A = taxable person Premises of A Move (transport) of goods from the stock of A in Malta to the stock of A in another MS (without underlying transaction A has to register for VAT purposes in the other Member State • (Deemed intra-Community) supply by a taxable person? YES • Supply in the scope of VAT (e.g. for consideration)? YES • Place of supply? In Malta (where transport begins) • Is there an exemption? Yes (if 2 conditions are fulfilled: (1) transport and (2) VAT number of the acquirer (A’) in the other MS) • Person liable to pay VAT? N/A

6. Non-transfers

7. Non-transfer Goods shall not be deemed to be transferred if they are transported from Malta to another MS for the purposes of one of the following transactions: (1) • A supply with installation or assembly in the other MS • A supply of these goods, which constitutes a distance sale taxable in the other MS • A supply of these goods by or on behalf of the taxable person on board ships, aircraft and trains that takes place in the other MS • A supply of these goods that is treated as an intra-Community supply exempt from VAT, as a supply exempt from VAT for export… (see items 1 to 9 of the Fifth Schedule, Part One) Art.6 VAT Act and item 17(2)(a,b,c and d) Second Schedule No special compliance

8. Non-transfer … : (2) • the supply of services to the taxable person involving work on those goods physically carried out in the other MS provided the said goods are returned to that person in Malta on the completion of the said work • the temporary use of those goods in the other MS for the purpose of the supply of services by the taxable person if that person is established in Malta • the temporary use of those goods in the other MS for a period not exceeding twenty-four months if the importation of those goods into that State for temporary use would qualify for a full exemption from import duties Art.6 VAT Act and item 17(2)(e,f and g) Second Schedule Special compliance (register of non-transfers = Item 1(i) Eleventh Schedule)

9. Non-transfer: temporary use with full exemption from import duties • Examples: temporary use of those goods in the other MS for a period not exceeding twenty-four months if the importation of those goods into that State for temporary use would qualify for a full exemption from import duties • Goods sent in the frame of a trade fair, exhibition… • Goods on trial (all goods): art. 16, §1er, b, Regulation EEC 3599/92 of 21/12/92 • Goods on sight: precious stones, carpets and jewelleries, manufactured fur-skins (Art. 16, §1er, d, Regulation EEC 3599/92 of 21/12/92) • Forms of transport

10. Non-transfer becomes a transfer If a move of goods satisfies the conditions to be a non-transfer and if afterwards these conditions are no longer met, this non-transfer becomes a transfer with all the consequences Simplification measures are possible (regulations) Art. 6 VAT Act Item 17(3) Second Schedule Art. 6 VAT Act Item 17(4) Second Schedule

11. Non-transfer: example MALTA Other EU MS A = taxable person Export by A Move (transport) of goods from Malta to another MS in order to export these goods (in the framework of a transaction) • (Deemed intra-Community) supply by a taxable person? NO • BUT • Supply by a taxable person? YES • Supply in the scope of VAT? YES • Place of supply? In Malta (where transport begins) • Is there an exemption? YES (if goods are transported outside the EU) • Person liable to pay VAT? N/A

12. Non-transfer: example MALTA Other EU MS A = taxable person B IC supply by A to B • (Deemed intra-Community) supply by a taxable person? NO • BUT • Supply by a taxable person? YES • Supply in the scope of VAT? YES • Place of supply? In Malta (where transport begins) • Is there an exemption? YES (if 2 conditions are fulfilled: (1) transport and (2) VAT number of the acquirer (B) in the other MS) • Person liable to pay VAT? N/A

13. Non-transfer: example MALTA Other EU MS A = taxable person B Distance sale by A to B • (Deemed intra-Community) supply by a taxable person? NO • BUT • Supply by a taxable person? YES • Supply in the scope of VAT? YES • Place of supply? In the other MS (where transport ends) • Is there an exemption? N/A • Person liable to pay VAT? N/A

14. Non-transfer: example MALTA Other EU MS A = taxable person B Supply with installation by A • (Deemed intra-Community) supply by a taxable person? NO • BUT • Supply by a taxable person? YES • Supply in the scope of VAT? YES • Place of supply? In the other MS (where goods are installed or assembled) • Is there an exemption? N/A • Person liable to pay VAT? N/A

15. Non-transfer: example MALTA Other EU MS A = taxable person B Supply from A to B on board ships: place of departure in the other MS • (Deemed intra-Community) supply by a taxable person? NO • BUT • Supply by a taxable person? YES • Supply in the scope of VAT? YES • Place of supply? In the other MS (point of departure of transport of passengers) • Is there an exemption? N/A • Person liable to pay VAT? N/A

16. Non-transfer: example MALTA Other EU MS A = taxable person B : processing Move of goods from Malta to the other MS in order to be processed After completion of the work, goods are going back to Malta • (Deemed intra-Community) supply by a taxable person? NO • Compliance: register of non-transfers (movements of goods) • For service from B to A: see hereafter

17. (Non)-transfer: example MALTA Other EU MS A = taxable person B : processing Move of goods from Malta to the other MS in order to be processed After completion of the work, goods are not going back to Malta A has to register for VAT purposes in the other MS • (Deemed intra-Community) supply by a taxable person? YES • Supply in the scope of VAT (e.g. for consideration)? YES • Place of supply? In Malta (where transport begins) • Is there an exemption? Yes (if 2 conditions are fulfilled: (1) transport and (2) VAT number of the acquirer (A’) in the other MS) • Person liable to pay VAT? N/A

18. Non-transfer: example MALTA Other EU MS A = taxable person A : service Move of goods by A from Malta to the other MS in order to be used in the framework of a service made in the other MS • (Deemed intra-Community) supply by a taxable person? NOeven if A has to register for VAT purposes in the other MS for the service rendered • Compliance: register of non-transfers (movements of goods)

19. Non-transfer: example MALTA Other EU MS A = taxable person B : goods on trial Move of goods by A from Malta to B in the other MS on trial After trial (not satisfactory), goods are going back to Malta • (Deemed intra-Community) supply by a taxable person? NO • Compliance: register of non-transfers (movements of goods)

20. Non-transfer followed by a transfer: example MALTA Other EU MS A = taxable person B : goods on trial Move of goods by A from Malta to B in the other MS on trial. After trial, goods are acquired by B

21. Non-transfer followed by a transfer: example (continued) – No simplification Operation 1 (no simplification in the other MS : transfer) • (Deemed intra-Community) supply in Malta by a taxable person? YES (from the moment goods are acquired by B). VAT registration of A in the other MS • Supply in the scope of VAT (e.g. for consideration)? YES • Place of supply? In Malta (where transport begins) • Is there an exemption? Yes (if 2 conditions are fulfilled: (1) transport and (2) VAT number of the acquirer (A’) in the other MS) • Person liable to pay Maltese VAT? N/A

22. Non-transfer followed by a transfer: example (continued) – No simplification Operation 2 (no simplification in the other MS : supply of goods to B) • Supply of goods by a taxable person? YES • Supply in the scope of VAT? YES • Place of supply? In the other MS (where goods are at the time they are put at the disposal of B) • Is there an exemption? N/A • Person liable to pay VAT? N/A

23. Non-transfer (followed by a transfer): example (continued) - Simplification Operation 1 and 2 (simplification in the other MS : movement of goods and supply of goods to B) • (Deemed intra-Community) supply in Malta by a taxable person? NO (from the moment goods are acquired by B) • Supply of goods by a taxable person? YES • Supply in the scope of VAT? YES (IC supply from Malta) • Place of supply? In Malta (where transport of the goods to B on trial began) • Is there an exemption? Yes (if 2 conditions are fulfilled: (1) transport and (2) VAT number of the acquirer B in the other MS) • Person liable to pay VAT? N/A

24. Deemed IC acquisitions

25. Deemed intra-Community acquisition: definition The use in Malta by a taxable person for the purpose of his economic activity of goods transported by him or on his behalf from another Member State within the territory of which those goods were produced, extracted, purchased, acquired or imported by him for the purpose of his economic activity, where the transport of those goods would, if made from Malta to another Member State, be treated as a transfer of goods to another Member State, shall be treated as an intra-Community acquisition for consideration Item 18(1)(b) and 18(2) Second Schedule Art. 6 VAT Act

26. Deemed intra-Community acquisition: characteristics • Move from another Member State to Malta (without transaction) • By a taxable person • Of goods forming part of his economic activity = • Intra-Community acquisition • For consideration All the rules related to intra-Community acquisitions are applicable mutatis mutandis including compliance (recapitulative statement in the Member State of departure)

27. Deemed intra-Community acquisition: example Other EU MS Malta A = taxable person Premises of A Move (transport) of goods from the stock of A in the other MS to the stock of A in Malta (without underlying transaction A has to register for VAT purposes in Malta • (Deemed intra-Community) acquisition by a taxable person? YES • Deemed ICA in the scope of VAT (e.g. for consideration)? YES • Place of ICA? In Malta (where transport ends) • Is there an exemption? NO (assumption) • Person liable to pay VAT? A (must register for VAT purposes in Malta)

28. No deemed IC acquisitions

29. No deemed intra-Community acquisition Goods shall not be deemed to be intra-Community acquired for consideration if they are transported from another MS to Malta for the purposes of one of the following transactions: (1) • A supply with installation or assembly in Malta • A supply of these goods, which constitutes a distance sale taxable in Malta • A supply of these goods by or on behalf of the taxable person on board ships, aircraft that takes place in Malta • A supply of these goods that is treated as an intra-Community supply exempt from VAT, as a supply exempt from VAT for export… Art. 6 VAT Act and item 17(2)(a, b, c and d) Second Schedule No special compliance

30. No deemed intra-Community acquisition … : (2) • the supply of services to the taxable person involving work on those goods physically carried out in Malta provided the said goods are returned to that person in the Member State of departure on the completion of the said work • the temporary use of those goods in Malta for the purpose of the supply of services by the taxable person if that person is established in the other Member State • the temporary use of those goods in Malta for a period not exceeding twenty-four months if the importation of those goods into Malta for temporary use would qualify for a full exemption from import duties Art. 6 VAT Act and item 17(2)(e, f and g) Second Schedule Special compliance (register of materials received for first bullet point : Item 1(j) Eleventh Schedule)

31. The no deemed ICA becomes an ICA If a move of goods to Malta satisfies the conditions to be a non-transfer from Malta (and therefore a no deemed ICA in Malta ) and if afterwards these conditions are not longer met, this non transfer (no deemed ICA) becomes a transfer (and consequently an ICA) with all the consequences Simplification measures are possible (regulations) Art. 6 VAT Act Items 17(3) and 18(2) Second Schedule Art. 6 VAT Act Item 17(4) Second Schedule

32. No deemed intra-Community acquisition: example Other EU MS Malta A = taxable person Export by A Move (transport) of goods from another MS to Malta in order to export these goods (in the framework of a transaction) • (Deemed) ICA in Malta by a taxable person? NO • BUT • Supply by a taxable person? YES • Supply in the scope of VAT? YES • Place of supply? In the other MS (where transport begins) • Is there an exemption? N/A (Yes in the other MS if goods are transported outside the EU) • Person liable to pay VAT? N/A

33. No deemed intra-Community acquisition: example Other EU MS Malta A = taxable person B IC supply by A to B • (Deemed) ICA in Malta by a taxable person? NO • BUT • ICA in Malta by a taxable person? YES (B) • ICA in the scope of VAT? YES • Place of ICA? In Malta (where transport ends) • Is there an exemption? NO (assumption) • Person liable to pay VAT? B

34. No deemed intra-Community acquisition: example Other EU MS Malta A = taxable person B Distance sale by A to B • (Deemed) ICA in Malta by a taxable person? NO • BUT • Supply by a taxable person? YES (A) • Supply in the scope of VAT? YES • Place of supply? In Malta (where transport ends) • Is there an exemption? NO (assumption) • Person liable to pay VAT? A (must register for VAT purposes in Malta)

35. No deemed intra-Community acquisition: example Other EU MS Malta A = taxable person B Supply with installation by A • (Deemed) ICA in Malta by a taxable person? NO • BUT • Supply by a taxable person? YES (A) • Supply in the scope of VAT? YES • Place of supply? In Malta (where goods are installed or assembled) • Is there an exemption? NO (assumption) • Person liable to pay VAT? Either B if he is registered under article 10 or A if B is not registered under article 10

36. No deemed intra-Community acquisition: example Other EU MS Malta A = taxable person Passenger Supply by A on board ships: place of departure in Malta • (Deemed) ICA in Malta by a taxable person? NO • BUT • Supply by a taxable person? YES (A) • Supply in the scope of VAT? YES • Place of supply? In Malta (point of departure of transport of passengers) • Is there an exemption? YES or NO • Person liable to pay VAT? A (if any)

37. No deemed intra-Community acquisition: example Other EU MS Malta A = taxable person B : processing Move of goods from the other MS to Malta in order to be processed After completion of the work, goods are going back to the other MS • (Deemed) ICA in Malta by a taxable person? NO • Compliance: register of materials received (movements of goods) • For service from B to A: see hereafter

38. (No) deemed intra-Community acquisition: example Other EU MS Malta A = taxable person B : processing Move of goods from the other MS to Malta in order to be processed After completion of the work, goods are not going back to the other MS A has to register for VAT purposes in Malta • (Deemed) ICA in Malta by a taxable person? YES • ICA in the scope of VAT (e.g. for consideration)? YES • Place of ICA? In Malta (where transport ends) • Is there an exemption? NO • Person liable to pay VAT? A (must register for VAT purposes in Malta)

39. No deemed intra-Community acquisition: example Other EU MS Malta A : service A = taxable person Move of goods by A from the other MS to Malta in order to be used in the framework of a service made in Malta • (Deemed) ICA in Malta by a taxable person? NO (even if A has to register for VAT purposes in Malta for the service rendered)

40. No deemed intra-Community acquisition: example Other EU MS Malta A = taxable person B : goods on trial Move of goods by A from the other MS to B in Malta on trial After trial (not satisfactory), goods are going back to the other MS • (Deemed) ICA in Malta by a taxable person? NO

41. No deemed ICA followed by a deemed ICA: example Other EU MS Malta A = taxable person B : goods on trial Move of goods by A from the other MS to B in Malta on trial. After trial, goods are acquired by B (assumption that B is registered under article 10 and that A is not established nor registered under article 10)

42. No deemed ICA followed by a deemed ICA : example (continued) – No simplification Operation 1 (no simplification in Malta : ICA) • (Deemed) ICA in Malta by a taxable person? YES (from the moment goods are acquired by B). VAT registration of A in Malta • ICA in the scope of VAT (e.g. for consideration)? YES • Place of ICA? In Malta (where transport ends) • Is there an exemption? NO (assumption) • Person liable to pay Maltese VAT? A (must register for VAT purposes in Malta)

43. No deemed ICA followed by a deemed ICA : example (continued) – No simplification Operation 2 (no simplification in Malta : supply of goods to B) • Supply of goods by a taxable person? YES • Supply in the scope of VAT? YES • Place of supply? In Malta (where goods are at the time they are put at the disposal of B) • Is there an exemption? NO (assumption) • Person liable to pay VAT? B

44. No deemed ICA (followed by a deemed ICA): example (continued) - Simplification Operation 1 and 2 (simplification in the other MS : movement of goods and supply of goods to B) • (Deemed) ICA in Malta by a taxable person? NO (from the moment goods are acquired by B) AND • ICA in Malta by a taxable person? YES (B) • ICA in the scope of VAT? YES • Place of ICA? In Malta (where transport of the goods to B on trial ended) • Is there an exemption? NO (assumption) • Person liable to pay VAT? B

45. Valuation of and work on movable tangible property

46. Valuation of and work on movable tangible property DEFINITION • Work on movable tangible property: all human and mechanical operations made to a movable tangible good. It concerns services consisting in a treatment to or a processing of movable tangible property • Valuation of movable tangible property: every act consisting in assessing the characteristics or appraising a movable tangible good

47. Valuation of and work on movable tangible property – Question 3 PLACE OF SUPPLY • Principle: where the services are physically carried out Art. 7 VAT Act Item 9 (1) Third Schedule

48. Valuation of and work on movable tangible property – Question 3 PLACE OF SUPPLY • Exception: in the Member State that granted the VAT identification number for the purpose of those services, if the following conditions are met: • The goods are transported out of the Member State where the services are physically carried out after having been processed; AND • The services are provided to customers that communicate a VAT identification number (with prefix) of another Member State than the Member state where the services are physically carried out Item 9 (2) Third Schedule

49. Valuation of and work on movable tangible property – Question 4 EXEMPTION • Work on movable goods acquired or imported for the purpose of undergoing such work within Malta, and transported outside the Community by or on behalf of either the supplier of the services or the customer (if the latter is not established within Malta) (Item 1 (3), Part One, Fifth Schedule) • International goods traffic: work on movable goods to be placed or placed under a customs duty suspension regime (Item 2 (2), Part One, Fifth Schedule) Sixth Directive?

50. Valuation of and work on movable tangible property – Question 4 EXEMPTION • Sea vessels: modification and maintenance (Item 6 (3), Part One, Fifth Schedule) and some other services for the direct needs of these vessels or their cargo (Item 6 (5), Part one, Fifth Schedule) • Aircraft: modification and maintenance (Item 7 (3), Part One, Fifth Schedule) and some other services for the direct needs of these aircraft or their cargo (Item 7 (5), Part One, Fifth Schedule)