With the VAT Package, changes have been made to the rules on the place of supply of services (which determines where services are taxed) and on the refund of VAT to businesses established within the EU (to modernise and simplify the refund procedure). These changes were adopted by the Council of EU Ministers by unanimity in 2008. Most of the changes have had to be transposed into national legislation by the Member States on 1 January 2010.

The European Chapter of IAPCO fired questions at Ms Pia Michelsen of the European Commission (DG TAXUD) at the IAPCO Annual Meeting in Athens who explained the changes which had taken place, with particular focus on those changes which are likely to affect the members of IAPCO:

There are now two general rules relating to the supply of services:

• one rule for services supplied to businesses (B2B) - the services must be taxed at the place of the customer who will have to account for VAT if established in a another Member State than that of the supplier
• another rule for services supplier to private consumers (B2C) - the services continue to be taxed in the Member State of the supplier.

There are still exceptions, for example:

• for services connected to immovable property, including the provision of hotel accommodation - the services are taxed where the property is located
• for passenger transport - the services are taxed where the transport takes place
• for cultural, artistic, sporting, scientific, educational, entertainment or similar activities - the services are taxed where the activity is carried out - for B2B services, limited to admission to cultural, artistic, sporting, scientific, educational, entertainment or similar as from 1 January 2011

There is also a new procedure for the refund of VAT, explained by Ms Michelsen, who replied in depth to the various questions put by members of IAPCO. "Learning from the source is" said Philippe Fournier, IAPCO President, "one of the great advantages of IAPCO membership. We all benefit from such exchanges, these benefits of knowledge which we pass immediately on to our clients, enabling us to manage their VAT efficiently and effectively".