Pilot project for issuing VAT cross-border rulings

by Adrian Maczura

17 November 2021

In October 2021, taxable persons planning cross-border transactions gained a new tool to obtain a VAT cross-border ruling – thanks to Poland's joining the EU VAT CBR (Cross-Border Rulings) pilot project.

Such a ruling is based on an agreement between the National Revenue Administration and the tax authority of another Member State participating in this project.

At the moment, 18 Member States have joined the EU VAT CBR project: Poland, Belgium, Denmark, Ireland, Estonia, Spain, France, Italy, Cyprus, Latvia, Lithuania, Malta, Hungary, the Netherlands, Portugal, Slovenia, Finland and Sweden.

VAT cross-border ruling – the objective

The objective of the rulings is to prevent disputes over VAT taxation and to ensure neutrality of this tax by eliminating the risk of double taxation or non-taxation. The rulings are expected to prove helpful in case of doubts in complex international transactions involving the supply of goods and the provision of services. Thus, they may be applied, inter alia, in: determining the place of taxation of chain transactions or taxation of services provided to a fixed establishment.

VAT cross-border ruling – the formalities

A VAT cross-border ruling (CBR) is free of charge and is issued at the request of the taxable person. The taxable person files an initial request for a cross-border ruling to the Head of the National Revenue Administration who then assesses whether it meets formal requirements. Only after the initial request is approved by the Head of the National Revenue Administration can the taxable person file the proper request.

The initial CBR request can be approved if, among other things, the following formal requirements are met:

• the planned transaction has a cross-border nature;
• the issue being the subject of the request is highly complex;
• the issue subject to the request is consulted with the tax authorities of the UE Member State participating in the VAT EU CBR project;
• the applicant consents to the further processing of the case by the National Revenue Administration and to consultations with the tax authorities of the EU Member State concerned, including the publication of the content of the agreed cross-border ruling after its anonymisation on dedicated websites of the European Commission.