QUESTION
In a normal research project do the Principal Contractors need to ask the other contractors to send him an invoice for the advance funds distributed? If so should the invoice include VAT?
In our opinion no invoice is needed for this distribution because it´s not a subcontract relationship between participants.
We need to know if there is any official document (Directive, Decision, etc.) where we can confirm that the distribution of funds between participants in an FP5 IST Project is free of invoicing and which are the accounting criteria to manage this kind of transference of money. |
|
|
ANSWER
The model contract foresees that the Commission pays the advance fund to the co-ordinator after signature of the contract, without need for a request or an invoice. Equally the model contract foresees that the co-ordinator then immediately forwards their share to the other partners, according to the breakdown indicated in the contract.
For their own internal or national accounting reasons this might well to be done by some partners with invoices or other formal requests, however these invoices are "proforma" and do not include VAT.
| |
QUESTION
We are a communication and events organisers’ agency. We have been charged to organise the final congress on behalf of a company participating in a concerted action, financially supported by European Communities. My customer says that within the framework of the concerted actions, financed by European funds, a special regulation for VAT applies. According to him the costs incurred to organise this event is exempted from VAT. Can you please confirm this point and suggest which legal texts we have to use as reference to justify VAT exemption to the national taxation office. |
|
|
ANSWER
The directives 77/388/EEC and 92/12/EC constitute the legal basis of the following.
The European Communities, and not the service suppliers are exempted from the customs duties, excise duties and levies to sale, as provided for in Articles 3 and 4 of the protocol of the privileges and immunities of the European Communities of 8 April 1965 (OJ nº 152 of 13 July 1967).
This exemption is granted to the Commission by the Governments of the Member States.
Two different situations may occur:
a) Local purchase or b) intra-Community purchase (annexes 1 and 4 of the VAT handbook).
In the cases of intra-Community purchases, the form 15.10 has to be provided by the Commission to have the direct exemption applied.
In the implementation of the contract, the service providers are in a situation where they are subjected to VAT for their purchasing, however they have to invoice the Commission without VAT. The suppliers can recover VAT relating to their purchases by means of the monthly or quarterly VAT declaration. Therefore for the suppliers there are no financial losses caused by the direct exoneration of the Commission. The suppliers have to refer to the application of the fiscal provisions introduced by their Member State pursuant the 6th Community directive on VAT. | |
