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We are presenting our third FS Tax Newsletter for this year in which we have summarized the most recent tax-related developments of the last two months in the FS-sector for you.This issue includes VAT related topics regarding amongst others the management of SIFs, the cross-border application of the cost sharing exemption and the VAT treatment of outsourced services relating to the operation of ATMs.

Within the framework of the Generalized System of Preferences (GSP) a new system for certification of the origin of goods, the Registered Exporter system (REX; Registered Exporter), was implemented on January 1, 2017.

On 29 March 2017, the United Kingdom’s (hereinafter: UK) Prime Minister, Theresa May, invoked Article 50 of the Treaty of the European Union (hereinafter: TEU). This marks the official beginning of the withdrawal procedure of the UK from the European Union (hereinafter: EU). In this short article we will take a glance at the meaning and consequences of the invocation of Article 50 TEU.

On September 28, 2016, the European Commission presented a proposal to update the current EU dual-use regulation (no. 428/2009) for export control in order to modernize the system “to keep up with new threats and rapid technological changes”.

The VAT adjustment scheme is likely to be extended to cover the refurbishment of real estate and other so-called ‘expensive services’ such as software. It will then take longer for the VAT deduction on these to become final and, in the event of a change of use, VAT deducted in the past may have to be repaid. The new rules also offer the prospect of a VAT refund, which was initially precluded. This follows from a draft proposal published by the Ministry of Finance for public consultation purposes.

On June 7, 2017, the Dutch Minister of Finance Dijsselbloem and other high-level representatives of 67 countries representing 68 jurisdictions signed the Multilateral Convention (“Multilateral Instrument” or “MLI”) to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (BEPS) and improve dispute resolution mechanisms. 

There have been recent developments on the US sanctions against Cuba, Russia and Iran. In addition, various Arab nations recently imposed a boycott on Qatar. Please find set out below an update.

For the purposes of allocating the right to tax salary from employment, a 183-day rule has been included in tax treaties. If a resident of another State is employed by a foreign employer to work in the Netherlands and there is no economic employer or permanent establishment of the foreign employer in the Netherlands, then the Netherlands only has the power to tax if the employee spends at least 183 days in the Netherlands during a 12-month period (or calendar year, depending on the text of the treaty).

Being compliant with export control and sanctions legislation is of great importance for companies engaged in international trade as violation of this legislation can lead to severe penalties as well as reputational damage. Companies should therefore be well aware of the risks related to export control and sanctions and take measures to mitigate these risks.

Please find set out below some interesting recent developments concerning EU and U.S. export controls and sanctions.

Unseen and KPMG Meijburg & Co are delighted to announce that Pasi Orrensalo is the winner of this year’s Meijburg Art Commission.