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TAX NEWS - October 2009

Luxembourg vat: 2010 EC Sales Lists and VAT returns published

The Luxembourg VAT authorities have published the draft EC Sales Lists (ESLs) and VAT returns for 2010, which are now available on the authorities' website.

ESLs are a means of documenting sales to VAT-registered traders in other EU Member States. Currently applicable to sales of goods, the introduction of the EU VAT package on 1 January 2022 includes an obligation to complete ESLs for services.

Taxpayers that supply goods to traders registered for VAT in other EC Member States are required to complete periodic ESLs, and the information provided is used by other Member States to ensure that VAT has been correctly accounted for.

Beginning 1 January 2010, the period for filing ESLs for goods in Luxembourg will depend on the volume of sales. If sales per quarter exceed EUR 100,000, monthly ESLs will be required and if less than EUR 100,000, only a quarterly return will be needed. It will be up to the taxpayer to track its sales and ensure that it has met its filing obligations. The VAT authorities will no longer be sending paper forms to taxpayers, so taxpayers will need to ensure they have the relevant forms for completion.

Also as from 1 January 2010, the requirement to complete ESLs will be extended to the supply of services to businesses in other EC Member States, although this requirement will be limited to services that are not VAT-exempt in the country of the recipient. The ESL will include the value of sales made in the period per customer, together with the country and VAT number of the customer.

Although seemingly straightforward, the obligation to complete ESLs may give rise to practical difficulties for traders that were not required to complete these forms in the past:

- It will be necessary for traders to ascertain the VAT number of their clients if they do not already have this information.

- Traders will need to ensure that the VAT numbers are valid, and to repeat such checks on a regular basis to ensure that the number has not become invalid. Failure to have valid VAT numbers for customers may result in questions from the VAT authorities, requalification of the VAT treatment of the supply, penalties and/or delays in the review of the relevant VAT returns.

- The potential VAT exemption for services will be decisive in determining whether or not to include the data on the listing. From a Luxembourg perspective, whether the VAT exemption applies will depend on the legislation in the country where the recipient is located. Traders operating in sectors such as financial services and the fund industry will have to verify the VAT treatment in the country of their customers to complete the listings correctly.

ESLs also will have to correspond to the returns, and, in particular, the 2010 VAT returns will have additional boxes to complete, specifically with respect to splitting out supplies of cross-border services to customers in and outside the EU, and for services exempt from VAT.
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