The Value Added Tax (Reverse Charge) (Anti-avoidance) Order 1997

Modification of the effect of regulation 82 of the Regulations

4.—(1) Where a supply of relevant telecommunications services is treated as if it were a taxable supply by virtue of section 8(1) or 43(2B) of the Act(1), the effect of regulation 82 of the Regulations shall be modified as follows—

(a) it shall have no effect in relation to relevant telecommunications services which are performed or which, by virtue of article 10 below, are treated as performed before 1st July 1997;

(b) it shall have no effect in relation to relevant telecommunications services which are wholly chargeable to VAT in another member State;

(c) where—

(i) relevant telecommunications services are performed on or after 1st July 1997; and

(ii) a payment in respect of those services has been made before that date,

it shall have effect in relation to those services as if the payment was made on 1st July 1997.

(2) Where the circumstances mentioned in paragraph (3) below apply—

(a) relevant telecommunications services which are paid for on or after 1st July 1997 shall be treated as being supplied only to the extent covered by the lower of—

(i) so much of the payment as exceeds the part of the payment for the supply by reference to which VAT is chargeable in another member State; and

(ii) so much of the payment as is properly attributable to the relevant period; and

(b) relevant telecommunications services which are supplied for a consideration which is not in money shall be treated as being supplied only to the extent covered by the lower of—

(i) so much of the consideration as exceeds the part of the consideration for the supply by reference to which VAT is chargeable in another member State; and

(ii) so much of the consideration as is properly attributable to the relevant period.

(3) The circumstances referred to in paragraph (2) above and article 7 below are that—

(a) relevant telecommunications services are performed on or after 1st July 1997; and

(b) either—

(i) the services are chargeable to VAT in part in another member State; or

(ii) the period over which the services are performed commenced before 1st July 1997.

(1)

Section 43(2B) of the Act was inserted by section 41 of the Finance Act 1997 (c. 16).