Martin Sharratt Head of VAT at Smith & Williamson Limited considers how these transactions should be dealt with for VAT purposes
Despite over 30 years of experience and a decision by the European Court of Justice the VAT treatment of foreign exchange (FX) trading is still in doubt. The technical difficulties at the heart of this debate also affect dealings in futures and certain other derivatives such as swaps.
The fundamental problem is that the VAT system was not designed to deal with transactions of this kind — this being of course the main reason why they were exempted in the first place. When VAT was first introduced financial businesses' main costs were VAT-free (salaries etc) but with the shift towards technology and the...
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Martin Sharratt Head of VAT at Smith & Williamson Limited considers how these transactions should be dealt with for VAT purposes
Despite over 30 years of experience and a decision by the European Court of Justice the VAT treatment of foreign exchange (FX) trading is still in doubt. The technical difficulties at the heart of this debate also affect dealings in futures and certain other derivatives such as swaps.
The fundamental problem is that the VAT system was not designed to deal with transactions of this kind — this being of course the main reason why they were exempted in the first place. When VAT was first introduced financial businesses' main costs were VAT-free (salaries etc) but with the shift towards technology and the...
If you or your firm subscribes to Taxjournal.com, please click the login box below:
If you do not subscribe but are a registered user, please enter your details in the following boxes:
