The EU has proposed that a new category of ‘certified taxable person’ be established. This was originally included in Regulation 904/2010, from October 2010. The latest document is here: http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=COM:2017:567:FIN
The exact details of how an ordinary taxable person obtains ‘certified’ status are yet to be determined. The conclusion will be that the certified taxable person will be a reliable taxpayer.
The record of certified taxable person will be made available via the VIES system.
In practice, in relation to transactions which re considered ‘fraud-sensitive,’ the Reverse Charge procedure will only be used where the recipient is a certified taxable person. The supplier will be required to verify his customer’s status. Presumably, if the recipient is not certified, VAT will be chargeable, forcing the recipient to claim VAT under the EU Refund scheme.
Post-Brexit, of course, this may present British traders in those sectors with additional costs. If we retain access to the Single Market, UK traders may be entitled to certified status.
Whilst this seems a rather peripheral proposal, its impact may become significant.
About Les Howard
Hi, I am a VAT Consultant, working mainly with charities. I am based in Cambridgeshire
I have over 20 years experience in VAT, and am currently also a part-time member of the Tax Tribunals.