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Explanatory note

Original text. Later amendments are not shown.

(This note is not part of the Order)

This Order applies to services performed on or after 1st July 1997. It amends the Value Added Tax (Place of Supply of Services) Order 1992 (S.I. 1992/3121) (“the principal Order”).

Article 3 amends article 17 of the principal Order and provides that the letting on hire of any means of transport which would be treated, apart from article 17, as supplied in the United Kingdom, will be relieved from VAT to the extent that it is used and enjoyed outside of the European Community.

Article 4 amends article 18 of the principal Order and provides that the letting on hire of any means of transport which would be treated, apart from article 18, as supplied in a place outside the European Community, will be chargeable to VAT to the extent that it is used and enjoyed in the United Kingdom.

Article 5 adds articles 19, 20 and 21 to the principal Order.

Articles 19 and 20 are added as a consequence of a derogation from Article 9(1) of Council Directive 77/388 (OJ No. L145, 13.6.1997, p.1) (“the Sixth VAT Directive”) made by Council Decision 6236/97 (OJ No. L86, 28.3.97, p. 33) (“the derogation”). The United Kingdom is authorised by the derogation to include within Article 9(2)(e) of the Sixth Directive services which are within the description now contained in paragraph 7A of Schedule 5 to the Act. (Paragraph 7A was inserted into the Act by the Value Added Tax (Reverse Charge) (Anti-avoidance) Order 1997 (S.I. 1997/1523)).

The effect of article 19 is that telecommunications services which would be treated, apart from that article, as supplied in the United Kingdom, will be relieved from VAT to the extent that they are used and enjoyed outside of the European Community.

The effect of article 20 is that telecommunications services which would be treated, apart from that article, as supplied outside of the European Community, will be chargeable to VAT to the extent that they are used and enjoyed in the United Kingdom.

The effect of article 21 is that the supply of a right to services will be treated as if it were supplied in the same place as the underlying supply to which the right relates, whether or not the right is exercised.