IMPLEMENTATION LEVEL

Supranational

AFFECTED FLOW

Inflow

ANNOUNCED AS TEMPORARY

No

NON-TRADE-RELATED RATIONALE

No

ELIGIBLE FIRMS

all

JUMBO

No

TARIFF PEAK

No
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Inception date: 01 Jan 2015 | Removal date: open ended
Still in force

Import-related non-tariff measure, nes

On 7 October 2013, the European Commission issued Regulation No. 1042/2013, introducing a new VAT regime for telecommunications and broadcasting firms as well as B2C providers of electronic services, with effect from 1 January 2015.
Under the current regime, EU firms are VAT taxed in the member state where they were established, whereas non-EU firms are taxed where the customer 'belongs' (i.e. where the person is established, has his permanent address or usually resides). This means that, for example, a Luxembourg firm selling in Hungary is taxed at the Luxembourg VAT rate of 15%, while an American company selling the same product in Hungary is taxed at the Hungarian rate of 27%.
From 1 January 2015 onwards, all companies will be taxed in the member state where the costumer belongs, regardless of whether the company is established within or outside the EU. In addition, the regime will henceforth be the same for B2B services as for B2C services, since the former services were already taxed where the recipient is established regardless of the domicile of the supplier.

AFFECTED COUNTRIES

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