At a recent meeting of the ECOFIN Council, new rules on the place of supply of services and a new procedure for VAT refunds were adopted.

* Place of supply of services

According to the press release, from 1 January 2010, the new rules on the place of supply of services will mean that business-to-business supplies of services will be taxed where the customer is situated, rather than where the supplier is located. For business-to-consumer supplies of services, the place of taxation will continue to be where the supplier is established.

However, in certain circumstances, the general rules for supplies both to businesses and to consumers will not be applicable and specific rules will apply to reflect the principle of taxation at the place of consumption.

* Refund procedure

According to the press release, from 1 January 2010, the current procedure for reimbursement of VAT incurred by EU businesses in Member States where they are not established will be replaced by a new fully electronic procedure, thereby ensuring a quicker refund to claimants.

A new feature is that businesses will be paid interest if Member States are late making refunds.