The VAT treatment of public bodies is complicated, inconsistent and outdated. Martin Salisbury and Ian Hyde consider the European Commission’s consultation on reforming the rules
The application of VAT rules to public bodies is by no means straightforward. Difficult issues arise in identifying what is a public body and special rules apply to the VAT treatment of outputs and the recoverability of input tax in the supply of public services.
More topically there has been recognition by the European Commission no less that in a world of increasing private sector involvement in public services the current rules are outdated and may be counterproductive to the efficient provision of public services.
The Commission has suggested in a...
