In February 2008, following lengthy discussions and negotiations, the 27 EU Member States agreed upon two Council Directives (N°2008/8/EC and 2008/9/EC), which reform the rules as regards VAT within the European Union.

The reform, known as the ‘VAT Package’, introduces:

changes as regards the place of supply of services: how to account for VAT on international services,

a new reporting requirement: EC Sales Lists (ESLs) reporting,

a change to the procedure for claiming refunds of VAT incurred abroad.

The reform introduces major changes to the rules governing payment and refund of VAT within the EU, with significant impact on all businesses trading in international services, requiring them to adapt their processes and systems to comply with the new rules.