Mike Lane and Zoe Andrews (Slaughter and May) review recent tax developments affecting the City.
Prevention of ‘offshore looping’
The general position under current UK law is that the supply of (broadly) intermediation for financial services or insurance products is an exempt supply in respect of which there is no recovery of input tax. Where however such services are exported from the EU by a taxable person (one who is or is required to be registered in the UK for VAT) the supplier can reclaim the VAT incurred on the provision of the services (VATA 1994 s 26(2)(c) and the VAT (Input Tax) (Specified Supplies) Order SI 1999/3121 (the ‘SSO’)). This rule is currently being exploited by companies (particularly in the insurance sector) that form arrangements with organisations outside of the EU to re-supply or ‘loop’ those services back to UK consumers...
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Mike Lane and Zoe Andrews (Slaughter and May) review recent tax developments affecting the City.
Prevention of ‘offshore looping’
The general position under current UK law is that the supply of (broadly) intermediation for financial services or insurance products is an exempt supply in respect of which there is no recovery of input tax. Where however such services are exported from the EU by a taxable person (one who is or is required to be registered in the UK for VAT) the supplier can reclaim the VAT incurred on the provision of the services (VATA 1994 s 26(2)(c) and the VAT (Input Tax) (Specified Supplies) Order SI 1999/3121 (the ‘SSO’)). This rule is currently being exploited by companies (particularly in the insurance sector) that form arrangements with organisations outside of the EU to re-supply or ‘loop’ those services back to UK consumers...
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If you do not subscribe but are a registered user, please enter your details in the following boxes:
