The place of supply for VAT purposes is one of the most difficult concepts in EU VAT law. The recent EU regulation which is binding on Member States leaves room for interpretation, and differing views are leading to problems for international groups who share costs. The views of some Member States on recharging part of a cost around a branch network can also lead to double taxation. Further, some Member States are taking the view that a VAT group is a separate taxable person and can therefore create a supply even where the charge is between branches of the same entity. The importance of gaining exemption for cross-charges is increasing, but the opportunity is likely to reduce in the future.
