VAT in Financial Sector Webinar Tuesday 12 May 2015 Mark Agnew London David Jamieson London Martin Morawski Amsterdam Thierry Vialaneix Paris Baker & McKenzie LLP is a member firm of Baker & McKenzie International, a Swiss Verein with member law firms around the world. In accordance with the common terminology used in professional service organisations, reference to a "partner" means a person who is a partner, or equivalent, in such a law firm. Similarly, reference to an "office" means an office of any such law firm. 2014 Baker & McKenzie LLP
Mark Agnew London Moderator Martin Morawski Amsterdam David Jamieson London Thierry Vialaneix Paris 2
VAT grouping and branch structures Input tax recovery
Skandia Case C-7/13 What does it say? Compatibility with FCE Why is it relevant? Recharge of shared costs No supply Company A branch Recharge of shared costs Supply? Company A branch Company B VAT group 4
Skandia Scope restricted to head office to branch supplies? Third country / Member State A VAT group in Member State B (branch) Company B Third country / Member State A VAT group in Member State B (branch) Company B 5
VAT grouping and branch structures Skandia Bought-in supplies vs. internally generated supplies Third party VAT group in Member State B Same legal entity (branch) Company B Third Country / Member State A 6
Skandia Interaction with cost-sharing associations Member State A VAT group in Member State B (member) (Branch - member) Company D Company C (member) Cost-sharing association 7
Input tax recovery Credit Lyonnais Input tax Supplies of services central costs related to head office and subsidiary operations Mixed supplies Third party Recharge of shared costs Taxable supply reverse chargeable Company B subsidiary supplies / turnover Input tax Supplies of services central costs related to head office and branch operations Third party Mixed supplies Recharge of shared costs No supply To what extent is branch turnover relevant for input tax recovery in head office? Company A branch supplies / turnover 8
Input tax recovery Credit Lyonnais and Skandia interaction Third country / Member State A VAT group (Art.11) in Member State B - Single taxable person Mixed supplies Supply of services to VAT group (branch) Supply of services Company B Input tax Supply of services Third Party 9
VAT Grouping and VAT recovery by holding companies Larentia + Minerva 1. VAT recovery by a holding company engaged in taxable activity (management) but relating to capital transactions (those transactions not in themselves giving rise to any supply being made by the holding company)? 2. Must members of a VAT group have legal personality? 3. Do the EU VAT grouping provisions have direct effect? 10
Things to look out for: Bookit Ltd v HMRC (Case C-607/14) Questions refered to ECJ on the scope of the VAT payment exemption Fiscale Eenheid X NV cs (Case C-595-/13) Test case on whether a real estate fund is a special invesment fund for purposes of the VAT exemption 11
HANK YOU
Mark Agnew London Mark Agnew advises on a wide spectrum of UK and EU VAT law, with a keen emphasis on domestic and international services in the finance and technology sectors. He focuses on the finance and insurance exemptions, real estate transactions, inbound investments to the UK, cross-border supplies of services, and M&A. He also handles VAT-related matters including partial exemption issues and maximising VAT recovery, efficient outsourcing, risk management, and litigation and dispute support. Tel.: +44 20 7919 1620 Email: mark.agnew@bakermckenzie.com David Jamieson London David Jamieson has 10 years of experience in advising clients on VAT and indirect taxes. Since joining Baker & McKenzie in 2012, he has advised multinational companies on a wide range of VAT matters, including supply chain planning, technology, financial services and real estate. David also has a particular focus on tax dispute resolution and litigation support. He has appeared as the lead advocate at both the First-tier Tribunal and Upper Tribunal in the UK and represented clients at all stages of the litigation process, including to the Supreme Court (the highest court in the UK). David is a solicitor and chartered tax adviser; prior to Baker & McKenzie, he worked at a Big 4 accountancy firm and a London city law firm. Tel.: +44 20 7919 1289 Email: david.jamieson@bakermckenzie.com 13
Martin Morawski Amsterdam Martin Morawski joined Baker & McKenzie s Amsterdam office in 2011. Martin specializes in advising and litigating with regard to VAT in financial and telecom markets. His field of expertise includes financial instruments, securitisation, investment funds, payment services and cash pooling arrangements. VAT litigation before Dutch District Courts, Dutch Courts of Appeal, the Dutch Supreme Court and the Court of Justice of the European Union is also part of Martin s practice. Tel.: +31 20 551 7198 Email: martin.morawski@bakermckenzie.com Thierry Vialaneix Paris Thierry Vialaneix joined Baker & McKenzie in 2004 as a local partner and became a senior counsel in 2009. He handles all legal matters related to VAT and indirect taxes. He began his career with CMS Bureau Francis Lefebvre, and subsequently joined Price Waterhouse Legal and Tax. Thierry also worked in the tax department of Ernst & Young and Landwell & Associés before joining Baker & McKenzie, where he currently supervises the Paris office s VAT practice. In addition to his legal practice, he has published several articles tackling VAT issues and has participated in various tax seminars. Tel.: +33 1 44 17 53 21 Email: thierry.vialaneix@bakermckenzie.com 14