VAT: cash in or cash out?
For most banks, VAT ranks as one of their top 5 cost items. This is reason enough to keep a close eye on your VAT position. The banking sector is also in a constant state of flux, with developments following each other in rapid succession. New legislation (AIFMD, MiFID II, UCITS V, EMIR, CRD IV (Basel III), SEPA and FATCA) has resulted in changes to organizational structures and revenue models. A continuous stream of case law requires a growing understanding of tax control measures, which need to be constantly updated. Tax advisors are also increasingly confronted with the changing face of what is considered socially responsible.
While all these developments carry VAT risks, they also offer VAT opportunities. Meijburg & Co’s Indirect Tax Financial Services Group advises clients active in the banking industry. Our specialists have extensive experience with identifying VAT risks, advising on tax control measures and optimizing the VAT position of businesses in the banking industry. Their day-to-day activities include advising banks on:
- the application of VAT exemptions to the services they provide;
- the application of VAT exemptions to the acquisition of goods and services;
- the right to recover VAT, including determining the pro rata recovery right;
- using contractual clauses and general terms and conditions as a way to cover VAT risks;
- setting up VAT efficient outsourcing procedures;
- introducing VAT control measures and setting up VAT systems and processes;
- the sale and purchase of business activities and their impact on VAT;
- intra-group transactions and their impact on VAT.
The Indirect Tax Financial Services Group is well aware of the challenges facing the banking industry and would be pleased to provide any assistance necessary. If you would like more information on the VAT position of financial institutions in general, please click here to download our fact sheet ‘VAT in the financial sector’. If you would like more information on the VAT position of banks, please click here to download our fact sheet on 'Banks and VAT'.
If you would like to read more about our general services provided to banks, please click here.