Car Industry Faces Tough Start To 2010

Posted on 26. January, 2010.

The car industry is set to struggle this year as significant VAT changes, including the rate returning to 17.5% and the introduction of the new EU-wide 'VAT package', come into force.

 

Companies have not only had to contend with determining what VAT rate applies when sales spanned the 1st January, but they also needed to be prepared to overcome systems issues, such as reprogramming systems and completing VAT returns, and the practical issues including re-pricing sales tickets.

 

The new VAT package includes changes to the rules that determine where a supply is made for VAT purposes - previously, services were treated as being supplied in the country of the seller, but from the 1st January 2010, this changed to the country of the customers for business-to-business transactions.

 

Additionally, there is the new requirement to file EC Sales Lists for services supplied to other EU countries and new rules simplifying the procedures for claiming back VAT incurred in other EU countries.