Assignment of assets
Tax area
In the European Value Added Tax Law, judgment of taxable land is a very important point. "Taxable land" means the country (member country) where VAT is taxed. In Japan's consumption tax law, there are only two ways to judge domestic and foreign, that is, whether the consumption tax is applied in Japan, and whether the consumption tax is applied outside the country. In this regard, there are 28 options to include the taxable land of the European Value Added Tax Law, including the number of member states, 28, and Japan where your company is located. Therefore, it can be said that judgment of taxable land is more complicated than two kinds of consumption tax. If you mistakenly judge taxable land, even if you intend to take actions that are conscious of legal compliance, we will invalidate those efforts from the ground up.
As an example, suppose you originally had to pay a VAT on Italy, you incorrectly imposed a German VAT on your customers and paid this VAT to the German tax office. Even in this case, the Italian tax office will not only ask you to pay VAT, but also may be subject to various fines due to delay in payment. It does not take into account that VAT that was paid by your company to the German tax office.
The judgment of the taxable place is very important in this way. Please note that the taxable land varies depending on the content of the effort.
① Tax discrimination judgment
② Judgment of taxable land ~
Providing service
In the case of provision of services between businesses, the taxable land for the provision of services is the country where the beneficiary carries out the business. In the case of providing services to the final consumer, the country where the service provider operates is the taxable land.
[Case I]
A case of UK lawyer A and Italian company B. British lawyer A provided consulting services to company B in Italy.
→ The provision of services between businesses is Italy because the country in which the beneficiaries operate is the taxable land.
【Case J】
Case of British Lawyer A and Italian Individual C. British lawyer A provided consulting services to Italian individual C.
→ In the case of providing services to the final consumer, since the country where the service provider operates is the taxable land, the taxable place is the UK.
③ Judgment of taxable land - acquisition within the EU The taxable land acquired within the EU will be the country where the asset is located at the end of transportation.
④ Tax discrimination judgment ~ import The taxable land of import will be the country where the asset is brought into the EU. As an exception, if an asset is placed in a customs clearance procedure, the country where the asset is located at the time the customs procedure is over is the taxable land.
Assignment of assets
If there is no transfer of assets, the taxable land for the transfer of the asset will be "the place where the asset was transferred". Also, if there is a transfer of assets, it will be "the place where asset movement began".
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[Case F] taxable land for selling goods in the same country In Germany, company A in Germany sold goods to company B in Germany. → The taxable area is Germany
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【Case G】 Tax area for selling goods in the EU by Japanese companies In Germany, company A in Japan sold goods to company B in Germany. → The taxable area is Germany
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[Case H] taxable land for direct delivery from companies in the EU to companies in the EU Company A in Japan purchased inventory of company C in Germany and sold goods to company B in Germany. The goods shall be sent directly from C to B.
- →The taxable area is Germany
In each of the above three cases the taxable place is Germany. Notably, as in case 3, even if it is a company is outside the EU, if you purchase goods within the EU and send it directly, it means that you transfer assets. In the cases of Case 2 and Case 3, the taxable land of transactions by Japanese companies became Germany. For this reason, the Japanese company has a duty to register the value-added tax number in Germany, declare the value added tax in Germany, and pay the tax.
