SUPPLY OF GOODS USING THE METHODOLOGY

1
SUPPLY OF GOODSUSING THE METHODOLOGY
2
FIRST QUESTION
3
First question a taxable person acting as such

• Supply of goods made by a taxable person
• Taxable person means a person who carries on an
  economic activity, whatever the purpose or the
  result of that activity

Art. 5(1)VAT Act
4
First question a taxable person acting as such

• Supply of goods made by a taxable person
• Economic activity means an activity carried on by
  a person, other than an employee acting as such,
  and consisting of any one or more of the
  following
•  (a) any trade or business
•  (b) any profession or vocation and the provision
  of any personal services
•  (c) the exploitation of tangible or intangible
  property for the purpose of obtaining income
  therefrom on a continuing basis
•  (d) the provision by a club, association or
  organisation (for a subscription or other
  consideration) of the facilities or advantages
  available to its members
•  (e) the admission, for consideration, of persons
  to any premises.

Art. 5(2) VAT Act
5
First question a taxable person acting as such

• Supply of goods made by a taxable person
• The activities of a public authority acting in
  the exercise of the functions assigned to it by
  law shall not be deemed to be an economic
  activity except as and to the extent provided in
  the First Schedule and except where such
  treatment as non-taxable persons would lead to
  significant distortions in competition

Art. 5(3)VAT Act
6
First question a taxable person acting as such

• Supply of goods made by a taxable person
• A person who does not carry on an economic
  activity within the meaning of the foregoing
  provisions but who, from time to time, makes an
  intra-community supply of new means of transport
  shall, for the purpose of any such supply, be
  treated as a taxable person

Art. 5(4)VAT Act
7
SECOND QUESTION
8
Second question supply in the scope of VAT

• A supply of goods is the transfer of the right to
  dispose of tangible property as owner
• Legal ownership but also economic ownership
• Made for consideration
• By a taxable person acting as such

Item 1(a) Second Schedule
Art. 6 VAT Act
9
THIRD QUESTION
10
Third question place of supply Transport versus
no transport

• Goods ARE NOT TRANSPORTED place is where the
  goods are at the time when they are placed at the
  disposal of the person acquiring those goods
• Goods ARE TRANSPORTED place is where the goods
  are at the time when the transport begins

Item 1(a) Third Schedule
Art. 7 VAT Act
Art. 7 VAT Act
Item 1(b) Third Schedule
11
Third question place of supply Transport versus
no transport
MALTA
A
B
C
Sale Transport 1
Sale Transport 2
Both sales are taking place in Malta where
transport begins
12
Third question place of supply Transport versus
no transport
MALTA
A
B
C
Sale
Sale
One transport in the relation A B (contract)
Sale A - B sale with transport place where
transport begins Sale B - C sale without
transport place where the goods are at the time
they are placed at the disposal of C
13
Third question place of supply Transport versus
no transport
MALTA
A
B
C
Sale
Sale
One transport in the relation B - C (contract)
Sale B - C sale with transport place where
transport begins Sale A - B sale without
transport place where the goods are at the time
they are placed at the disposal of B
14
Third question place of supply Transport versus
no transport
MALTA
Other country
A
B
C
Sale Transport 1
Sale Transport 2
Both sales are taking place in Malta where
transport begins
15
Third question place of supply Transport versus
no transport
MALTA
Other country
A
B
C
Sale
Sale
One transport in the relation A B (contract)
Sale A - B sale with transport place where
transport begins Sale B - C sale without
transport place where the goods are at the time
they are placed at the disposal of C
16
Third question place of supply Transport versus
no transport
MALTA
Other country
A
B
C
Sale
Sale
One transport in the relation B - C (contract)
Sale B - C sale with transport place where
transport begins Sale A - B sale without
transport place where the goods are at the time
they are placed at the disposal of B
17
Third question place of supply Installation or
assembly

• Goods ARE INSTALLED OR ASSEMBLED BY THE SUPPLIER
  OR ON BEHALF OF THE SUPPLIER place is where the
  goods are installed or assembled

Art. 7 VAT Act
Item 2 Third Schedule
18
Third question place of supply Installation or
assembly

• MALTA Other country

A
Installation by or for the account of A
Invoice
C
Invoice
B
Place of supply A-B B-C

19
Third question place of supplyOn board ships or
aircraft

• A supply of goods on board ships, aircraft (or
  trains) during the part of a transport of
  passengers effected in the Community takes place
  at the point of departure of the transport of
  passengers

Art. 7 VAT Act
Item 3 Third Schedule
20
Third question place of supplyOn board ships
and aircraft

• Air Malta flight Malta Brussels (supply of
  perfumes, tobacco)
• Supply takes place in Malta

Brussels
Luqa
21
Third question place of supplyOn board ships
and aircraft

• Air Malta flight Brussels - Malta (supply of
  perfumes, tobacco)
• Supply takes place in Belgium

Luqa
Brussels
22
Third question place of supply Distance sales

• Will be examined during the session distance sales

Item 4 Third Schedule
Art. 7 VAT Act
23
Third question place of supplySupply subsequent
to an importation

• Will be examined during the session importation

Art. 7 VAT Act
Item 1(c) Third Schedule
24
FOURTH QUESTION
25
Fourth question exemptionsExemptions without
credit

• Immovable property no change
• Education changes
• Supply of goods where the said supply is
  connected with and essential for the supply of
  educational services
• Supplies of goods in respect of which the
  supplier had not qualified for input tax credit
  new

26
Fourth question exemptionsExemptions with credit

• Exports and services connected with exports
  changes
• Supply of goods transported or dispatched outside
  the Community by or on behalf of the supplier
• Supply of goods transported or dispatched outside
  the Community by or on behalf of a purchaser not
  established in Malta with exceptions
• Work on movable tangible property acquired or
  imported for such work in Malta and transported
  outside the Community by the performer of the
  service or by the customer not established in
  Malta, or on their behalf (see also services)

27
Fourth question exemptionsExemptions with credit

• International goods traffic new
• The supply of goods intended to be placed or
  while they are placed under a customs duty
  suspension regime
• The supply of services other than those exempted
  by item 6 (read 5 brokers and intermediaries),
  consisting in work on movable goods that are
  intended to be placed or while they are placed
  under a customs duty suspension regime (see
  services)

28
Fourth question exemptionsExemptions with credit

• Intra-Community supplies new (see hereafter)
• International transport and ancillary services
  new (see services)
• The international transport of persons the
  transport of luggage and motor vehicles
  accompanying passengers and the supply of
  services related to the international transport
  of passengers
• The transport of goods from a third territory and
  the supply of services ancillary thereto, where
  the value of these transport and ancillary
  services are included in the taxable value of the
  importation of those goods
• The transport of goods which is directly
  connected with the export of those goods outside
  the Community

29
Fourth question exemptionsExemptions with credit

• Brokers and other intermediaries new (see
  sessions services)
• Sea vessels and aircraft new wording
• Internal transport no change (see services)
• Food no change
• Pharmaceutical products no change

30
Fourth question exemptionsExemptions with credit

• Gold new
• The supply of gold to the Central Bank of Malta.
• The supply of investment gold, including
  investment gold represented by certificates for
  allocated or unallocated gold or traded on gold
  accounts and including, in particular, gold loans
  and swaps, involving a right of ownership or
  claim in respect of investment gold, as well as
  transactions concerning investment gold involving
  futures and forward contracts leading to a
  transfer of right of ownership or claim in
  respect of investment gold.
• The supply of services of agents who act in the
  name and for the account of another when they
  intervene in the supply of investment gold for
  their principal.
• The exemptions in paragraphs (2) and (3) shall be
  subject to the option for taxation in terms of
  Part Six of the Fourteenth Schedule

31
FIFTH QUESTION
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Fifth question person liable to pay VAT

• If supplier established in Malta person who
  makes the supply
• If supplier not established in Malta and not
  registered under art.10 VAT Act person
  established in Malta and registered under article
  10 VAT Act to whom the supply is made
• Special regime for triangulation will be
  examined during the session triangulation

Art. 20(1)(a) VAT Act
Art. 20(2)(c) VAT Act
Art. 20(2)(a) VAT Act
33
Fifth question person liable to pay VAT

• Jointly and severally liable the person who
  mentions the tax on an invoice or a document
• Representative

Art. 20(3) VAT Act
Art. 20(4) and 66 VAT Act
34
INTRA-COMMUNITY SUPPLY OF GOODS
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Definition

• No legal definition in the Sixth Directive
• Concept
• Supply of goods THAT ARE TRANSPORTED by or on
  behalf of the supplier or the person to whom the
  supply is made from a Member State to another
  Member State

Part 1, Preliminary, Interpretation, 2(1), VAT Act
36
Characteristics basic questions 1 and
2Operation in the scope of VAT

• Supply of goods in the scope of VAT YES if made
  by a taxable person acting as such

Art. 4, 5 and 6 VAT Act
Item 1(a) Second Schedule
37
Characteristics basic question 3Place of the
supply

• ALWAYS where transport begins

Art. 7 VAT Act
Item 1(b) Third Schedule
Part 1, Preliminary, Interpretation, 2(1), VAT Act
38
Characteristics basic question 4Exemption

• YES if
• made to a person identified on the relative
  invoice by an EU VAT identification number
  excluding
• a supply made by a person registered under
  article 11
• a supply that is subject to the special scheme of
  the profit margin
• Implicitly goods are transported to another
  Member State

Art. 9(1)(a) VAT Act
Item 3(1) Part One Fifth Schedule
39
Characteristics basic question 5Person liable
to pay VAT

• If any VAT to pay ALWAYS the person who makes
  the supply
• A taxable person not established in Malta who,
  in terms of article 20 VAT Act, is liable for the
  payment of the tax on a supply shall apply to
  register under article 10 VAT Act (EVEN IF THERE
  IS AN EXEMPTION FOR IC SUPPLY formalities such
  as the intra-Community sales listing)

Art. 20(1)(a) VAT Act
Art. 10(4) VAT Act
40
Other questions chargeable event and
chargeability

• The chargeable event takes place on the date
  when the goods are delivered
• The tax becomes chargeable on the earlier of the
  following dates
• The 15th day of the month following the date when
  the chargeable event takes place (compare with
  intra-Community acquisition)
• The date on which a tax invoice (for the whole
  price) is issued for that supply

Art. 8 VAT Act
Item 1(1) Fourth Schedule
Art. 8 VAT Act
Item 4 Fourth Schedule
41
INTRA-COMMUNITY SUPPLY OF GOODSPRACTICAL CASES
42
IC supply by a private individual

• A Maltese private individual sells goods. Goods
  are transported to another Member State
• Is the supply made by a taxable person? NO
• Is the supply in the scope of VAT? N/A
• Where is the place of the supply? N/A
• Is there any exemption? N/A
• Who is liable to pay VAT? N/A

ATTENTION SPECIAL REGIME FOR NEW MEANS OF
TRANSPORT
43
IC supply by a non-taxable legal person

• A Maltese non-taxable legal person sells goods.
  Goods are transported to another Member State
• Supply made by a taxable person? NO (attention
  First Schedule)
• Supply in the scope of VAT? N/A
• Place of supply? N/A
• Is there any exemption? N/A
• Who is liable to pay VAT? N/A

ATTENTION SPECIAL REGIME FOR NEW MEANS OF
TRANSPORT
44
IC supply by a taxable person doing only
operations without credit

• A Maltese taxable person doing only operations
  without credit (even if registered under article
  12 VAT Act) sells goods. Goods are transported to
  another Member State
• Supply made by a taxable person? YES
• Supply in the scope of VAT? YES
• Place of supply? In Malta (where transport
  begins)
• Is there any exemption? YES (but VAT Act,
  art.9(1)(a) and Fifth Schedule, Part Two, item
  13)
• Who is liable to pay VAT? N/A

ATTENTION SPECIAL REGIME FOR NEW MEANS OF
TRANSPORT
45
IC supply of goods subject to the profit margin
scheme

• A Maltese taxable person registered under
  article 10 sells goods subject to the profit
  margin scheme. Goods are transported to another
  Member State
• Supply made by a taxable person? YES
• Supply in the scope of VAT? YES
• Place of supply? In Malta (where transport
  begins)
• Is there any exemption? NO (but Maltese VAT
  due on the profit margin)
• Who is liable to pay VAT? Maltese taxable
  person

ATTENTION SPECIAL REGIME FOR NEW MEANS OF
TRANSPORT
46
IC supply of goods by a taxable person registered
under article 10

• A Maltese taxable person registered under
  article 10 sells goods. Goods are transported to
  another Member State.
• Supply made by a taxable person? YES
• Supply in the scope of VAT? YES
• Place of supply? In Malta (where transport
  begins)
• Is there any exemption? YES (if 2 conditions
  are fulfilled (1) transport and (2) VAT number
  of the acquirer in the other MS)
• Who is liable to pay VAT? N/A

Compliance recapitulative statement (Art.30(3)
VAT Act)
47
IC supply of goods exempt from VATCompliance

• Report of the operation in the proper tax records
• Report of the operation in the appropriate box of
  the VAT return
• Tax invoice on which is reported the EU VAT
  identification number of the recipient in another
  Member State (ISO Code)
• Report of the operation in the recapitulative
  statement to be submitted for each calendar
  quarter during which exempt intra-Community
  supplies take place

Eleventh Schedule
Art.27 VAT Act
Twelfth Schedule
Art.30(3) VAT Act)
48
IC supply of goods exempt from VATProof of
exemption

• Transport to another Member State
• Contracts
• Order forms
• Proof of payment
• Transport documentation (attention when the
  transport is made by the recipient or on his
  behalf)
• Recipient is liable to pay VAT in the Member
  State of destination communication of a valid
  VAT identification number of another Member State
  (preceded by the ISO Code for this Member State)

49
IC supply of goods by a taxable person registered
under article 10

• A Maltese taxable person registered under
  article 10 sells goods. Goods are transported to
  another Member State.
• Supply made by a taxable person? YES
• Supply in the scope of VAT? YES
• Place of supply? In Malta (where transport
  begins)
• Is there any exemption? NO (if one of the 2
  conditions are not fulfilled (1) transport and
  (2) VAT number of the acquirer in the other MS)
• Who is liable to pay VAT? Maltese taxable
  person

50
DEEMED INTRA-COMMUNITY SUPPLY OF GOODS
(TRANSFER)NON TRANSFER
51
Transfer

• The transfer by a taxable person of goods
  forming part of his economic activity to another
  Member State shall be treated as an
  intra-Community supply of goods for consideration
• Goods shall be deemed to be transferred by a
  taxable person to another MS if they are
  transported by or on his behalf from Malta to
  another MS for the purposes of his economic
  activity

Art.6 VAT Act
Item 17 Second Schedule
52
Transfer characteristics

• Move from Malta to another Member State (without
  transaction)
• By a taxable person (article 10, article 11,
  person only doing exempt without credit
  operations)
• Of goods forming part of his economic activity
• Intra-Community supply
• For consideration

All the rules related to intra-Community supplies
are applicable mutatis mutandis including
compliance (recapitulative statement)
53
Transfer example

• MALTA Other EU MS

A taxable person
Premises of A
Move (transport) of goods from the stock of A in
Malta to the stock of A in another MS (without
underlying transaction
A has to register for VAT purposes in the other
Member State

• (Deemed intra-Community) supply by a taxable
  person? YES
• Supply in the scope of VAT (e.g. for
  consideration)? YES
• Place of supply? In Malta (where transport
  begins)
• Is there an exemption? Yes (if 2 conditions are
  fulfilled (1) transport and (2) VAT number of
  the acquirer (A) in the other MS)
• Person liable to pay VAT? N/A

54
Non-transfer

• Goods shall not be deemed to be transferred if
  they are transported from Malta to another MS for
  the purposes of one of the following
  transactions (1)
• A supply with installation or assembly in the
  other MS
• A supply of these goods, which constitutes a
  distance sale taxable in the other MS
• A supply of these goods by or on behalf of the
  taxable person on board ships, aircraft and
  trains that takes place in the other MS
• A supply of these goods that is treated as an
  intra-Community supply exempt from VAT, as a
  supply exempt from VAT for export (see items 1
  to 9 of the Fifth Schedule, Part One)

Art.6 VAT Act and item 17(2)(a,b,c and d) Second
Schedule No special compliance
55
Non-transfer

• (2)
• the supply of services to the taxable person
  involving work on those goods physically carried
  out in the other MS provided the said goods are
  returned to that person in Malta on the
  completion of the said work
• the temporary use of those goods in the other MS
  for the purpose of the supply of services by the
  taxable person if that person is established in
  Malta
• the temporary use of those goods in the other MS
  for a period not exceeding twenty-four months if
  the importation of those goods into that State
  for temporary use would qualify for a full
  exemption from import duties

Art.6 VAT Act and item 17(2)(e,f and g) Second
Schedule Special compliance (register of non
transfer Item 1(i) Eleventh Schedule)
56
Non-transfer becomes a transfer

• If a move of goods satisfies the conditions to
  be a non transfer and if afterwards these
  conditions are no longer met, this non-transfer
  becomes a transfer with all the consequences
• Simplification measures are possible
  (regulations)

Art. 6 VAT Act
Item 17(3) Second Schedule
Art. 6 VAT Act
Item 17(4) Second Schedule
57
Non-transfer example

• MALTA Other EU MS

A taxable person
Export by A
Move (transport) of goods from Malta to another
MS in order to export these goods (in the
framework of a transaction)

• (Deemed intra-Community) supply by a taxable
  person? NO
• BUT
• Supply by a taxable person? YES
• Supply in the scope of VAT? YES
• Place of supply? In Malta (where transport
  begins)
• Is there an exemption? Yes (if goods are
  transported outside the EU)
• Person liable to pay VAT? N/A

58
Non-transfer example

• MALTA Other EU MS

A taxable person
B
IC supply by A to B

• (Deemed intra-Community) supply by a taxable
  person? NO
• BUT
• Supply by a taxable person? YES
• Supply in the scope of VAT? YES
• Place of supply? In Malta (where transport
  begins)
• Is there an exemption? Yes (if 2 conditions are
  fulfilled (1) transport and (2) VAT number of
  the acquirer (B) in the other MS )
• Person liable to pay VAT? NA

59
Non-transfer example

• MALTA Other EU MS

A taxable person
B
Distance sale by A to B

• (Deemed intra-Community) supply by a taxable
  person? NO
• BUT
• Supply by a taxable person? YES
• Supply in the scope of VAT? YES
• Place of supply? In the other MS (where
  transport ends)
• Is there an exemption? N/A
• Person liable to pay VAT? N/A

60
Non-transfer example

• MALTA Other EU MS

A taxable person
B
Supply with installation by A

• (Deemed intra-Community) supply by a taxable
  person? NO
• BUT
• Supply by a taxable person? YES
• Supply in the scope of VAT? YES
• Place of supply? In the other MS (where goods
  are installed or assembled)
• Is there an exemption? N/A
• Person liable to pay VAT? N/A

61
Non-transfer example

• MALTA Other EU MS

A taxable person
B
Supply from A to B on board ships place of
departure in the other MS

• (Deemed intra-Community) supply by a taxable
  person? NO
• BUT
• Supply by a taxable person? YES
• Supply in the scope of VAT? YES
• Place of supply? In the other MS (point of
  departure of transport of passengers)
• Is there an exemption? N/A
• Person liable to pay VAT? N/A

62
Non-transfer example

• MALTA Other EU MS

A taxable person
B processing
Move of goods from Malta to the other MS in order
to be processed After completion of the work,
goods are going back to Malta

• (Deemed intra-Community) supply by a taxable
  person? NO
• Compliance register of non-transfers (movements
  of goods)
• For service from B to A see session on services

63
(Non)-transfer example

• MALTA Other EU MS

A taxable person
B processing
Move of goods from Malta to the other MS in order
to be processed After completion of the work,
goods are not going back to Malta
A has to register for VAT purposes in the other MS

• (Deemed intra-Community) supply by a taxable
  person? YES
• Supply in the scope of VAT (e.g. for
  consideration)? YES
• Place of supply? In Malta (where transport
  begins)
• Is there an exemption? Yes (if 2 conditions are
  fulfilled (1) transport and (2) VAT number of
  the acquirer (A) in the other MS)
• Person liable to pay VAT? N/A

64
Non-transfer example

• MALTA Other EU MS

A taxable person
A service
Move of goods by A from Malta to the other MS in
order to be used in the framework of a service
made in the other MS

• (Deemed intra-Community) supply by a taxable
  person? NO even if A has to register for VAT
  purposes in the other MS for the service rendered
  
• Compliance register of non-transfers (movements
  of goods)

65
Non-transfer example

• MALTA Other EU MS

A taxable person
B goods on trial
Move of goods by A from Malta to B in the other
MS on trial After trial (not satisfactory), goods
are going back to Malta

• (Deemed intra-Community) supply by a taxable
  person? NO
• Compliance register of non-transfers (movements
  of goods)

66
Non-transfer followed by a transfer example

• MALTA Other EU MS

A taxable person
B goods on trial
Move of goods by A from Malta to B in the other
MS on trial. After trial, goods are acquired by B

67
Non-transfer followed by a transfer example
(continued) No simplification

• Operation 1 (no simplification in the other MS
  transfer)
• (Deemed intra-Community) supply in Malta by a
  taxable person? YES (from the moment goods are
  acquired by B). VAT registration of A in the
  other MS
• Supply in the scope of VAT (e.g. for
  consideration)? YES
• Place of supply? In Malta (where transport
  begins)
• Is there an exemption? Yes (if 2 conditions are
  fulfilled (1) transport and (2) VAT number of
  the acquirer (A) in the other MS)
• Person liable to pay Maltese VAT? N/A

68
Non-transfer followed by a transfer example
(continued) No simplification

• Operation 2 (no simplification in the other MS
  supply of goods to B)
• Supply of goods by a taxable person? YES
• Supply in the scope of VAT? YES
• Place of supply? In the other MS (where goods are
  at the time they are put at the disposal of B)
• Is there an exemption? N/A
• Person liable to pay VAT? N/A

69
Non-transfer (followed by a transfer) example
(continued) - Simplification

• Operation 1 and 2 (simplification in the other
  MS movement of goods and supply of goods to B)
• (Deemed intra-Community) supply in Malta by a
  taxable person? NO (from the moment goods are
  acquired by B)
• Supply of goods by a taxable person? YES
• Supply in the scope of VAT? YES (IC supply from
  Malta)
• Place of supply? In Malta (where transport of the
  goods to B on trial began)
• Is there an exemption? Yes (if 2 conditions are
  fulfilled (1) transport and (2) VAT number of
  the acquirer B in the other MS)
• Person liable to pay VAT? N/A