Weekly VAT News

We are delighted to invite you to our update seminar at 25 Churchill Place, Canary Wharf, on 14 May covering UK sanctions and export controls. This event will focus on navigating the evolving UK sanctions and export controls landscape within a rapidly changing international trading environment.

The agenda for this seminar is as follows:

13:30 – 14:00 Registration
14:00 Session commences

• Welcome address – Onelia Angelosanto, Partner, EY Global Trade
• Managing sanctions diversion risk in complex supply chains – Jonathan Fisher, King’s Counsel
• Strengthening the implementation and enforcement of the UK’s trade sanctions – Office of Trade Sanctions Implementation Representative (OTSI)
• Panel Discussion – Hot topics in sanctions and export controls
  • Onelia Angelosanto – EY Partner – Global Trade and Panel Facilitator
  • Jonathan Fisher – King’s Counsel – Red Lion Chambers
  • Representative from OTSI
  • Representative from Industry
  • Julian Balson – EY Partner – EY Tax Controversy & Risk Management
  • Richard Davenport – EY Director – Export Controls & Sanctions
  • Nicola Mollat – EY Partner – Forensic & Integrity Services

15:45 Close followed by refreshments

Please register for this event here.

The Government has announced that the UK Global Tariff will be temporarily suspended on 89 products. Working in partnership with industry, the Government has decided to suspend import tariffs on a whole range of products to lower costs for businesses, until July 2027.

The full list of products that will have tariffs temporarily removed can be found here.  

There will be further opportunities to apply for tariff suspensions in due course. Further information, including dates of the application window, details of previous windows, guidance and methods to apply, can be found here.

The US reciprocal-based tariffs on products from specified countries, which had been announced on 2 April 2025, took effect on 9 April. However, later on 9 April, President Trump announced that these tariffs would be suspended for 90 days (for all countries except China). The 10% tariff for all countries (except China) remains in place – as does the 25% rate for all aluminium, steel and cars entering the US. Tariffs up to 145% (as announced on 10 April) have been imposed on imports of Chinese goods. However, on 11 April, the US announced the exemption of certain electronics, including smartphones, laptops, goods used in semiconductor manufacturing, and other products from the ‘reciprocal’ tariff rate applied to imports from China and the 10% universal tariff rate (effective retrospectively from 5 April).

The new guidance does not exempt these goods from tariffs in place prior to the April 2 announcement, including the 20% IEEPA tariffs on China that went into effect in February and March and other existing duties.

For a full list of exempted HS codes, please see the Clarification to the Executive Order or the Customs Guidance.

On 9 April, the EU announced the imposition of countermeasures in response to the US tariffs. However, in a Statement on 10 April, Ursula von der Leyen confirmed that following President Trump’s announcement on 9 April, the EU measures would also be put on hold for 90 days, saying “we want to give negotiations a chance”.

Please also refer to our global tax alerts available here and here.

For further information please contact Marc Bunch, Ross Freeman, Maggie Taucher or Shenshen Lin.

Topics – Digital platforms and electronic-services pre 1 January 2015

C-101/24 XYRALITY

On 10 April 2025 the Court of Justice of the European Union (CJEU) delivered the opinion of Advocate General Szpunar (AG) in this German referral asking, where a German taxable person (developer) supplied, before 1 January 2015, a service by electronic means to non-taxable persons established within the EU, via a marketplace for applications operated by an Irish taxable person, is Article 28 of the VAT Directive to be applied, with the result that the Irish taxable person is treated as if it had received those services from the developer and supplied them to the end customers, because the marketplace for applications did not name the developer as the supplier of the service and show German VAT until it did so in the order confirmations issued to the end customers? If the first question referred is answered in the affirmative: Is the place of supply of the fictitious service supplied by the developer to the marketplace for applications under Article 28 in Ireland, by virtue of Article 44 or in the Federal Republic of Germany, by virtue of Article 45? If, by virtue of the answers to the first and second questions referred, the developer has not supplied any services in the Federal Republic of Germany: is the developer subject to a tax liability for German VAT under Article 203 on the ground that the marketplace for applications, acting in accordance with an agreement, named the developer as the supplier of the service and showed German VAT in the order confirmations it sent by email to the end customers, even though the end customers are not entitled to deduct input VAT?

In essence, this case concerns the taxation of ‘in-application purchases’ effected during the years from 2012 to 2014, in which Article 9a of Implementing Regulation No 282/2011 was not yet applicable. Article 9a, effective from 1 January 2015, provides that for the application of Article 28 of the VAT Directive, where electronically supplied services are supplied through a telecommunications network, an interface or a portal such as a marketplace for applications, a taxable person taking part in that supply shall be presumed to be acting in his own name but on behalf of the provider of those services unless that provider is explicitly indicated as the supplier by that taxable person and that is reflected in the contractual arrangements between the parties.

To regard the provider of electronically supplied services as being explicitly indicated as the supplier of those services by the taxable person, the following conditions must be met:

1. The invoice issued or made available by each taxable person taking part in the supply of the electronically supplied services must identify such services and the supplier thereof
2. The bill or receipt issued or made available to the customer must identify the electronically supplied services and the supplier thereof

For the purposes of this paragraph, a taxable person who, with regard to a supply of electronically supplied services, authorises the charge to the customer or the delivery of the services, or sets the general terms and conditions of the supply, shall not be permitted to explicitly indicate another person as the supplier of those services.

The applicant is a taxable person established in Germany who develops and distributes game applications for mobile devices. For distribution purposes, it uses, inter alia, an internet-based digital distribution platform for software (referred to as a marketplace for applications). The marketplace for applications was operated by Ireland-based X until 31 December 2014. During the years at issue, end customers who used mobile devices with a specific operating system were able to download the applicant’s game applications solely via the marketplace for applications.

During that period X entered into standardised agreements, governing the distribution of products via the marketplace for applications, with developers such as the applicant. Those agreements stipulated that the sellers of the products offered through the marketplace for applications were their developers. X was to display the products on behalf of the developers and make them available for the end customers to download and purchase. X was to receive a commission in return for providing those services. The payment transaction was to be processed via the marketplace for applications.

During the years at issue, various downloadable game applications were available to the end customers in the marketplace for applications. The vast majority of those games did not originate from X but rather from the designers themselves. When presented in the marketplace for applications, the name of the developer was also displayed for each game. During the years at issue, the applicant appeared in the marketplace for applications and its company name, legal form and address were displayed.

Although the game applications developed by the applicant could be downloaded free of charge from the marketplace for applications, it was necessary for the end customer to purchase improvements or other benefits (in-application purchases) in order to advance in the game or obtain other benefits. The end customers were able to select the desired improvements or benefits in the applicant’s game application and have them activated for a fee.

The in-application purchases were processed via the marketplace for applications by means of a method of payment saved there by the end customer. The applicant was not named as the supplier in the course of the purchase transaction. Only X’s logo and certain links were visible. Upon completion of the purchase process, the end customer received an order confirmation from X by email. That email contained the logo of the marketplace for applications and a statement that the purchase was transacted with the relevant developer (in this case, the applicant) in the marketplace for applications.

The applicant initially regarded itself as the supplier to the end customers. It therefore declared German VAT for end customers based in the EU, on the ground that the place of supply was, pursuant to domestic law and Article 45 of the VAT Directive, its place of establishment.

On 29 January 2016, the applicant submitted corrected VAT returns for the years at issue. It was now of the opinion that this was a case in which services were ‘commissioned’ (Article 28 of the VAT Directive). It had provided its services to X, and X had provided the services to the end customers. Pursuant to domestic legislation and Article 44 of the VAT Directive, the place of supply of its services to X was in Ireland.

The tax authority disagreed and asserted that X was merely to be regarded as an intermediary. Whilst the respective purchase process took place via the marketplace for applications, the end customers were made aware of the terms of use at each individual step of the in-application purchase. X had thus clearly informed the end customers in the course of each purchase that the transactions were being executed on behalf a third party and that X was merely collecting the amount owed.

On appeal, the Finance Court upheld the action brought by the applicant. It considered that the transactions were not taxable in Germany because the recipient of its services was X. According to domestic legislation and Article 44, the place of supply was in Ireland.

Firstly, considering the interpretation of Article 28, as effective during the relevant period, the AG recalled that a taxable person acting on behalf of another is considered the supplier of a service, creating a legal fiction of two consecutive service supplies: the intermediary receives services from the principal and provides them to the end user. This inverses their roles for VAT purposes, suggesting a specific interpretation for electronically provided services involving intermediaries like app stores. An intermediary acting in the manner is sometimes referred to as an ‘undisclosed agent’.

However, withholding the identity of the principal is not a condition for the application of Article 28, the fact that the app developer is known to end users does not preclude the app store from being considered an intermediary acting in the manner provided for in that provision.

The AG noted that there is nothing in the wording of Article 28 to indicate that its application is conditional on the identity of ‘another person’ on whose behalf the intermediary acts being kept secret. Second, the Court explicitly ruled out that requirement for the application of the provision in question in the judgment in Fenix International.

The AG considered that the fact that the end users are informed, either before or after the service is provided, of the identity of the application developer, does not preclude the application of Article 28.

As to whether a taxable person is acting in his own name, the Court has ruled that this was for the national court to determine on the basis of all the available information, including, in particular, the contractual relations between the taxable person and its customers. However, it should be noted that those statements of the Court refer to Article 9a and only mean that, in the Court’s view, the presumptions contained in that provision properly reflect the actual contractual relations between the parties to the transactions which the regulation governs. As for Article 28, it does not strictly reflect the actual contractual relations between the various parties to a supply of services, instead, it creates a legal fiction for VAT purposes.

The AG considered that all that Article 28 requires is that the taxable person acts on behalf of another person, but in his own name. Thus, the taxable person acts as himself in relation to the recipients of the service and determines his own rules for establishing and executing that legal relationship. He does not, however, undertake to provide the service and is not responsible for it, because in such a case he would be acting on his own behalf rather than on behalf of another person. Thus, the taxable person remains an intermediary between the actual service supplier and the recipient, and only for VAT purposes is the taxable person fictitiously assumed to be the service supplier.

The AG concluded that he had not been persuaded by the tax authority that Article 28 does not apply to the situation at issue in the immediate proceedings. The recipients of the service of making mobile applications available enter into contracts with the developers of those applications, and it is the developers who are responsible for the functioning of the applications. That is precisely what the taxable person (in this case, the app store) is doing on behalf of other persons (the application developers). If the app store entered into contracts with the persons to whom those applications are made available, and if it were responsible for their functioning, it would be acting on its own behalf rather than on behalf of the developers. The tax authorities reasoning would render that provision meaningless, because, according to that reasoning, the provision would regulate non-existent situations.

In this regard the AG considered the tax authorities arguments to be unconvincing; the app store acts on behalf of application developers by facilitating access to their applications, rather than entering into contracts directly with users. If the app store were responsible for the functioning of the applications, it would be acting on its own behalf. The app store manages the entire process of providing access to applications, setting uniform conditions for all available apps, and ensuring compatibility and security for a specific operating system.

In-app purchases also occur within the app store, reinforcing that the store operates on its own behalf. Customers download applications directly from the app store, without needing to engage with the developers, making the store the direct supplier. The store charges fees and confirms contracts, further solidifying its role as the service supplier.

The AG considered that the economic and technical realities of app stores align closely with the legal fiction established by Article 28. Therefore, prior to 1 January 2015, this provision should be interpreted as applicable to the electronic supply of mobile applications and additional services through app stores.

Considering the application of Article 9a in the context of the questions referred, the AG recalled that it establishes that intermediaries, such as app marketplaces, are presumed to act in their own name on behalf of another unless the actual supplier is explicitly identified. This presumption applies to electronically supplied services, and if certain conditions are met, it becomes irrebuttable. However, since Article 9a took effect on 1 January 2015, it cannot be applied to cases before that date.

The AG opined that the tax authority's argument that Article 28 should be interpreted differently for earlier periods should be rejected, as Article 9a merely specifies the implementation of Article 28 without altering its content. The Court has previously confirmed that the presumption in Article 9a does not change the nature of Article 28 but clarifies its application to electronically supplied services.

In the immediate case, the app store operator meets all conditions for the irrebuttable presumption, as it authorises the supply and charges customers. Therefore, before Article 9a's implementation, the app store is considered the supplier of mobile applications under Article 28, regardless of users knowing the developers' identities.

In summary on the first question referred, the AG considered that Article 28 should be interpreted as applying to the situation of the supply, prior to 1 January 2015, by electronic means, of services consisting in making available computer programs (mobile applications) and additional services through a portal (app store), with the result that a taxable person operating an app store is treated as if it had received those services from an application developer and supplied them to end users.

The AG moved on to consider the second question referred – whether Article 28 is to be interpreted as meaning that the place of supply of a fictitious service supplied by another person to a taxable person who takes part, under the conditions set forth in Article 28 thereof, in the supply of services to non-taxable persons resident in a Member State, is to be determined on the basis of Article 44 or Article 45.

In this regard the AG concluded that Article 28 must be interpreted as meaning that the place of supply of a fictitious service supplied by another person to a taxable person who takes part, under the conditions set forth Article 28 thereof, in the supply of services to non-taxable persons resident in a Member State, is to be determined on the basis of Article 44; in the immediate case Ireland.

Finally, the AG considered whether Article 203 of the VAT Directive is to be interpreted as meaning that another person on whose behalf a taxable person taking part in the supply of services under the conditions set forth in Article 28 acts is liable to pay VAT on the ground that the taxable person has designated that other person, with his consent, as the supplier of services and stated the amount of VAT in the purchase confirmations transmitted electronically to non-taxable end users.

The AG recalled that pursuant to Article 203, anyone who enters VAT on an invoice is obliged to pay the VAT. That provision seeks to eliminate the risk of loss of tax revenue which the right of deduction provided for by that directive might entail. That article therefore applies where VAT has been invoiced incorrectly and there is a risk of loss of tax revenue on account of the fact that the recipient of the invoice in question has the right to deduct such VAT.

Article 203 does not apply in a situation where there is no risk of loss of tax revenue on the ground that the invoices in question were issued to non-taxable persons who, by definition, have no right to deduct the VAT shown on those invoices. A similar situation exists in the immediate proceedings as the recipients of in-app purchases in applications such as games for mobile devices are, as a rule, consumers, and only in very exceptional cases could they be taxable persons acting as such. Therefore, there is no risk of loss of tax revenue associated with the right to deduct VAT incorrectly shown on an invoice, and Article 203 therefore does not apply.

The AG considered that the suggestion that that provision could be applied in the immediate proceedings because of the risk of loss of tax revenue caused by a negative jurisdictional dispute between the tax authorities in Germany and Ireland, as a result of which VAT will not ultimately be collected in either Member State, to be incorrect. Article 203 should be interpreted strictly, it is functionally linked to the right to deduct tax and serves, in accordance with the Court’s case-law, to avoid the risk of loss of tax revenue resulting from the deduction being overstated.

The AG recalled that whilst it is for Member States to take steps to ensure full collection of the VAT due in their territory, this does not justify the collection of tax in a Member State where it is not due and from a taxable person who is not obliged to pay it. In the immediate proceedings Xyrality has, in the AG’s opinion, correctly, albeit belatedly, determined its VAT liabilities, and it is up to the Member States concerned to take all necessary measures to collect that tax correctly.

In summary on this point, the AG opined that Article 203 must be interpreted as meaning that another person, on whose behalf a taxable person taking part in the supply of services under the conditions set forth in Article 28 acts, is not liable to pay VAT on the ground that the taxable person has designated that other person, with his consent, as the supplier of services and stated the amount of VAT in the purchase confirmations transmitted electronically to non-taxable end users.

In conclusion:

• Article 28, as amended by Council Directive 2008/8, must be interpreted as applying to the situation of the supply, prior to 1 January 2015, by electronic means, of services consisting in making available computer programs (mobile applications) and additional services through a portal (app store), with the result that a taxable person operating an app store is treated as if it had received those services from an application developer and supplied them to end users.
• Article 28 must be interpreted as meaning that the place of supply of a fictitious service supplied by another person to a taxable person who takes part, under the conditions set forth in Article 28, in the supply of services to non-taxable persons resident in a Member State, is to be determined on the basis of Article 44.
• Article 203 must be interpreted as meaning that another person on whose behalf a taxable person taking part in the supply of services under the conditions set forth in Article 28 acts, is not liable to pay VAT on the ground that the taxable person has designated that other person, with his consent, as the supplier of services and stated the amount of VAT in the purchase confirmations transmitted electronically to non-taxable end users.

Comments: This case was taken by EY Germany. For further information, please contact Bertrand Monfort or Daniela Bell. The VAT position for these supplies changed from 1 January 2015 with the introduction of Article 9a, however, whilst we await to see whether the Court follows the AG’s opinion, this is a good result for the taxpayer. Although the case is 10 years old, it could have impacted businesses that had failed to register and would have had to backdate VAT registration to the first sales.

Wednesday 30 April

Judgment – C-278/24 Genzyński

Topics – Joint and severally liability for members of a board

A Polish referral asking whether Articles 193, 205 and 273 of the VAT Directive, in conjunction with Article 325 of the Treaty on the Functioning of the European Union and Article 17 of the Charter of Fundamental Rights of the European Union, together with the principle of proportionality, should be interpreted as precluding national legislation which provides for a mechanism whereby a member of the board of directors of a legal person is jointly and severally liable for the VAT debts of that legal person without it having first been established whether that member of the board of directors acted in bad faith or whether his or her conduct could be found to constitute a culpable error or negligence?

Thursday 8 May

Judgment – C-615/23 Dyrektor Krajowej Informacji Skarbowej (Services de transport public)

Topics – Compensation and taxable amount

A Polish referral asking whether compensation paid by a local authority to a transport operator should be included in the taxable amount under Article 73 of the VAT Directive. The operator, independent from the local authority, sought clarification on the VAT implications of potential arrangements where it would act as the operator for public transport services. The operator would earn revenue from ticket sales, compensation for lost revenue due to concessionary fares, and other sources, but would also receive compensation from the local authority to cover losses incurred.

Opinion – C-744/23 Zlakov

Topics – Free legal services – supply for VAT purposes

A Bulgarian referral asking whether a ‘supply of services’ within the meaning of Articles 2(1)(c), 24(1), 26(1)(b) and 28 of the VAT Directive is to be interpreted as including; (i) the provision of legal aid free of charge (pro bono) by a lawyer to a party in court proceedings or (ii) by the lawyer of a party which has been successful in a legal dispute, where the court awards that party’s lawyer the remuneration which he or she would have received if remuneration had been agreed under a contract for legal assistance? Is ‘taxable person’ within the meaning of Article 28 and Article 75 to be interpreted as covering a lawyer (a one-person law firm) who has provided legal services in either of these circumstances?

Judgment – C-405/24 L.s.c.

Topics – Exemption from taxes of imports of small consignments of goods of a non-commercial character

A Polish referral asking whether the provisions of Article 143(b) of the VAT Directive, and Article 1 of Directive 2006/79 on the exemption from taxes of imports of small consignments of goods of a non-commercial character from third countries, is to be interpreted as being contrary to national legislation according to which the importation of goods placed under ‘consignment’ sent from the territory of a third country by an individual and intended for an individual residing in the territory of a Member State of the European Union other than the territory of the country where the importation takes place is not exempt from VAT?

Opinion – C-796/23 Česká síť

Topics – Societies – liability of designated partner

This case had been listed for 8 May but for now has been removed from the calendar

A Czech referral asking whether a situation in which, pursuant to special national VAT arrangements for ‘societies’ (associations of persons that do not have legal personality), a ‘designated partner’ is liable for the payment of the VAT for the entire society, despite the fact that another partner had dealt with the end customer in relation to the supply of services, is compatible with the VAT Directive. Does the compatibility of the situation with the VAT Directive depend on whether the other partner had overstepped the rules of representing the society and dealt in his, her or its own name with the end customer?

Opinion – C-121/24 Vaniz

Topics – Joint and several liability to pay VAT after the principal debtor has ceased to exist as a legal person

This case had been listed for 8 May but for now has been removed from the calendar

A Bulgarian referral asking whether Articles 44 and 205 of the VAT Directive, and the principles of transparency and proportionality of liability, permit the initiation, after the principal debtor has ceased to exist as a legal person, of a procedure intended to establish a person’s joint and several liability to pay VAT and the extent of such joint and several liability? Do they, following the removal of the debtor from the commercial register without a legal successor assuming that debtor’s rights and obligations, allow the existence of a registered claim against that debtor, for which a third party is liable a posteriori (knowledge based solely on experience or personal observation)?

Opinion – C-234/24 Brose Prievidza

Topics – Tooling – right to a VAT refund – goods did not leave the territory of the supplier’s Member State

This case had been listed for 8 May but for now has been removed from the calendar

A Bulgarian referral asking whether Directive 2008/9 (providing for the refund of VAT to taxable persons not established in the Member State of refund but established in another Member State) confers a right to a VAT refund requested by the recipient of equipment (tooling) when the delivered goods have not left the territory of the supplier’s Member State and the supply of the equipment has been artificially separated from the intra-community supplies of products manufactured with this equipment to the same recipient?

Topics – Insurance intermediary – supply of goods for consideration

WTGIL Limited v HMRC

The Court of Appeal (CoA) has released its judgment in this case concerning WTGIL Limited (Ingenie) which is the representative member of the Ingenie VAT group. The only other member of the VAT group is WTGISL Limited, formerly called Ingenie Services Limited (ISL).

ISL is an insurance intermediary which developed, marketed and sold telematics car insurance (also known as black box insurance) aimed primarily at 17 to 25-year-olds. Ingenie and ISL are not insurers and the policies were underwritten by insurers from a panel appointed by ISL. As a condition of the insurance, a telematics device (Device) must be fitted to the policyholder’s car within ten days of the commencement of the policy. ISL agreed to provide the Device and fit it or arrange for it to be fitted. The Device captures and transmits information about the way the car is being driven. ISL then collects and analyses the telematics data from the Device and provides an analysis of the policyholder’s driving proficiency to the policyholder and to the insurer. The purpose of providing such data is to enable the policyholder to improve their driving and thus obtain cheaper car insurance. The data provided by ISL to the insurer allows it to monitor the policyholder’s driving behaviour and to increase or decrease the premium accordingly.

Ingenie made a claim for a refund of £2,084,149 input tax incurred in relation to the provision and fitting of Devices in the VAT periods 07/14 to 07/18. The claim was based on the view that these were taxable supplies made by ISL to the policyholders, whether or not for consideration, and the input tax was attributable to such supplies.

HMRC rejected the claim asserting that there was no contract under which ISL supplied the Device to the policyholders for consideration. HMRC took the view that the only consideration for ISL’s supplies of providing and fitting the Device and any subsequent data analysis was the commission paid to ISL by the insurer, which was consideration for an exempt supply of insurance intermediary services. Accordingly, any input tax relating to the Device was directly linked to an exempt supply by ISL and not deductible. HMRC also considered that charges in relation to the fitting of a new Device when the policyholders changed their car were either additional premiums charged by the insurer or consideration for an exempt supply by ISL.

Ingenie appealed HMRC’s decision before the First-tier Tribunal (FTT), contending that the VAT incurred on the cost of purchasing and fitting the Devices was recoverable in full because it was directly attributable to taxable supplies made by ISL. Those taxable supplies were:

• The first provision and fitting of a Device on commencement of a policy in return for either: (i) non-monetary consideration provided by the policyholder by entering into the contract of insurance with the insurer; or alternatively, (ii) monetary consideration being £150 commission payable to ISL on the first provision and fitting of the Device; and
• Any subsequent provision and fitting of a Device, e.g. when the policyholder changes their car, in return for the amount charged according to a sliding scale, to the policyholder under the insurance contract as a contribution to the cost of providing and fitting the new Device; or
• If there is no consideration for the provision and fitting of the Device, a deemed supply of goods under paragraph 5(1) of Schedule 4 to VATA94 when the Device is transferred or disposed of so as no longer to form part of the assets of ISL, which also includes ancillary fitting services.

The FTT held that ISL did not make any supplies of Devices or related services, so HMRC correctly denied the recovery of VAT.

On appeal, the Upper Tribunal (UT) upheld HMRC's refusal to refund the input tax, agreeing with the FTT that there had been no separate supply of goods to policy holders.

The CoA firstly considered whether the services supplied by ISL were exempt services within the meaning of Item 4, Group 2, Schedule 9, VATA94, read with Notes (1) and (2). Referring to Secret Hotels2 Ltd v HMRC, the CoA recalled that in any case involving contractual or other arrangements between multiple parties and identification of the relevant supplies for VAT purposes, it is necessary to have regard to all the circumstances in which the transactions take place and to consider “the whole of the relationships between the various parties”.

The CoA noted that at a high level of generality, the immediate case concerns the role of ISL in facilitating the promotion and sale of a specialised form of motor insurance designed by Ingenie to appeal to younger drivers who might otherwise find the cost of obtaining suitable insurance burdensome or even prohibitive. Viewed from the perspective of the prospective customer for such insurance, the provision and fitting of a Device in the insured vehicle is an essential component of the insurance for which the customer pays the premium to the insurer. The Device provides the necessary technology upon which this type of motor insurance depends, but its provision is not an end in itself. The FTT had indeed noted that policyholders saw the policy as a single transaction with a single premium. The CoA considered that there is nothing in the contractual nexus which detracts from such an analysis.

Considering the VAT Directive, the CoA suggested that it is an entirely natural use of language to describe the relevant activities of ISL as “related services performed by insurance brokers and insurance agents” within the scope of article 135(1)(a). The services were primarily devoted to the promotion, implementation and subsequent administration of ‘black box’ insurance policies underwritten by the insurer, and no such policy could be implemented without the provision and fitting of a Device in the policyholder’s car. Its provision and fitting were therefore integral and essential features of this kind of motor insurance, and by the same token the provision and fitting were services which not only related to, but were an indispensable element of, or precondition to, the main transaction of insurance itself. The more detailed language of the corresponding exemption in UK domestic law in VATA94 points clearly in the same direction.

Dismissing the appeal, the CoA has unanimously held that the services of providing and fitting the Devices were performed by ISL as an integral and essential element of the relevant insurance transactions, those services fall within the scope of the VAT exemption, and it would be both artificial and unrealistic to exclude them.

Comments: Whilst the Court of Appeal has dismissed the taxpayer’s appeal, it has done so on the basis that the taxpayer made exempt supplies of insurance intermediary services in relation to the Devices. This is in contrast to the UT which, in dismissing the appeal, had instead focused on the lack of consideration for a separate supply of the Devices and had indeed dismissed the suggestion that there were exempt intermediary services. Whilst this is a case which considers the nature of transactions in an insurance arrangement, any business providing goods as part of a service in similar circumstances should consider whether this case affects current VAT arrangements.

The Government has responded to the Public Accounts Committee (PAC) report from session 2024-25 on tax evasion in the retail sector.

The response includes the following:

• An agreement with the PAC recommendation to assess the additional tax collected from online marketplaces
• An agreement to develop a clear strategy for tackling tax evasion and deliberate non-compliance
• A commitment to more effective joint working between HMRC, Companies House, and the Insolvency Service
• An acceptance of the need to explore options to improve the authenticity and integrity of company address information on the register
• An agreement to strengthen VAT registration controls, including enhanced address validation. It is noted that HMRC is already exploring options for enhancing address validation and verification of UK establishment during the VAT registration process. This will determine the feasibility of linking registration checks to verification and identification of risks. This feasibility study will complete by 30 June 2025, with an anticipated implementation date of 31 March 2026
• A commitment to exploring the costs and benefits of transaction-based reporting and other controls used in other countries
• A commitment to increase collaboration to tackle rogue directors and phoenixism

This Guidance explains that when you can amend or cancel your declaration depends on if you have received a final tax calculation message or if the declaration has been cleared. A post clearance section has been added to include guidance for cancelling or amending a declaration after clearance.

For further information regarding global trade please contact Gerard Koevoets.

This publication provides the number of UK importing and exporting businesses with EU and non-EU countries, based upon a positive declaration of trade in goods.

Please also refer to:

• Customs UK Importer and Exporter Population: data tables 2024
• Customs Importer and Exporter Population

For further information regarding global trade please contact Gerard Koevoets.

This Notice provides details regarding the entitlement and procedures for reclaiming excise Duty on fuel used in vessels that make ‘marine voyages’. Guidance has been added to Section 2.1 'What is an ‘eligible vessel’ to help identify what an eligible vessel is and what will qualify for the relief.

For further information regarding excise duty please contact Craig Clark.

This Notice explains the Flat Rate Scheme, who can use it and how to apply to join. It has been updated under section 2.4 to make it clearer that if you use the Flat Rate Scheme, you do not recover input tax or VAT. Also, if your business is in Northern Ireland, you cannot recover VAT on acquisitions from the EU.

Guidance regarding the use of form VAT53 to allow an accountant, or agent, to register or make changes to a VAT group on your behalf.

Guidance regarding the use of form VAT50/51 to amend or remove an existing VAT group.

Please also refer to:

• Apply for VAT group registration
• Apply to change the representative member of a VAT group

Uganda

The Minister of Finance Planning and Economic Development has tabled Tax Amendment Bills, 2025 (the Bills) before Parliament for debate. If passed into law by the Parliament and assented to by the President of the Republic of Uganda, the Bills will take effect from 1 July 2025. Indirect tax and procedural measures include:

• Broadening the Anti-tax avoidance mechanisms – the Bill proposes to extend the Commissioner's discretionary powers in anti-avoidance scenarios to cases where an importer has entered into or carried out a scheme involving the importation of goods under separate consignments, which if aggregated, would qualify the importer for registration under the VAT Act. The Commissioner General would have the authority to aggregate the split transactions for purposes of determining whether a taxpayer meets the criteria for VAT registration
• Extending the list of exempted institutions under the Second Schedule to the VAT Act. The proposal seeks to add ‘United Nations related Agencies and specialised Agencies’ as exempt institutions. Further, the Bill proposes to substitute ‘International Atomic Energy Agency (IAEA)’ for the words ‘International Atomic Agency (IAA)’
• The Bill proposes various amendments to Schedule 3 to the VAT Act (see alert for details)
• The Bill seeks to expand the list of zero-rated supplies by adding the supply of aircraft
• Various Excise Duty reforms including expansion of the duty remission regime and the introduction of new duty rates (see alert for details)
• The Bill proposes to waive the payment of interest and penalties if the taxpayer voluntarily pays the principal tax outstanding as of 30 June 2024, by 30 June 2026
• Amendments to enhance penal tax for non-compliance with electronic fiscal device requirements
• Introduction of gaming and betting centralised payments gateway
• Introduction of a charge on all goods imported into the country for home use (Infrastructure Levy)
• Introduction of an import declaration fee
• Introduction of an export levy on wheat bran, cotton cake and maize bran and the repeal/removal of the export levy exemption on hides and skins etc

These reforms could increase the cost of importing goods into Uganda, potentially impacting supply-chain decisions and pricing strategies for multinational enterprises. Additionally, the export levy may affect the profitability of exporting certain agricultural products from Uganda.

Poland

The Ministry of Finance has published a response to a parliamentary inquiry about the timeline for implementing Poland's National e-Invoicing System (KSeF) platform for exchanging e-invoices.

The Ministry confirmed that the obligation to use e-invoicing will come into force in line with the current timeline:

• From 1 February 2026 for large businesses with turnover exceeding 200 million Polish zloty (PLN 200m) (approximately €47m)
• From 1 April 2026 for all other taxpayers

Given the confirmed implementation dates and the current legislative timeline, it is essential to begin taking appropriate preparatory steps now.