Clause 23 - Supply of electronic services in member States: special accounting scheme
Finance Bill
Public Bill Committees, 20 May 2003, 10:00 am
Mr Stephen O'Brien (Eddisbury, Conservative)
I am most grateful to you, Sir Nicholas. I shall clearly have to jump out of my seat more energetically. I thought that a little eye contact would do the trick, but that is clearly not so in your case. I must remember that, as both of us come from Cheshire constituencies, I shall have to smile harder at you.
Clause 23 and schedule 2 relate to the supply of electronic services in member states and the special accounting scheme and are part of a series of changes pursuant on the EU VAT on e-commerce directive 2002/38/EC, which deals with VAT on international e-commerce. This particular change relates to the position of a non-EU business that provides interactive services over the internet to buyers in the EU, without having any place of business in the EU itself—shades of our previous debate on betting online. Up to now such a business could avoid European Union VAT on its sales. It must now register and pay VAT on sales to private customers in the EU. However, it needs to register in only one EU member state, which can be any member state that it chooses.
As we are discussing clause 23 stand part, I have taken the opportunity to lay out the introduction. The amendments relate to schedule 2, which inserts schedule 3B to the VAT Act 1994 into the Bill, and provide for a person to register in the United Kingdom. All other EU countries are meant to be introducing corresponding provisions. The schedule is interesting from a technical point of view, as the business will create output VAT.
As this is a stand part debate, I have taken the opportunity to lay out the introduction. The amendments relate to the schedule, which I understand will be taken later. Unless you immediately give me guidance, Sir Nicholas, that you would like to combine them, I shall sit down now and discuss the amendments as part of the schedule after the stand part debate. As the schedule relates to the clause, I wanted to make it clear that I had amendments, as it might affect our view on the stand part debate.