What Isn't An Electronically Supplied Service?

In our previous blog post, we looked into the VAT related to electronically supplied services. In addition to this, it has also emerged that many more countries are now starting to tax this kind of service, thus bringing into the mainstream what just a couple of years ago was deemed to be a highly-contested VAT charge.

Defining an electronically supplied service, may be hard especially for the ones which may not be that clear. This is all the more important when bearing in mind that there are a set of services that have been defined as not to be an electronically supplied services. This means that in addition to ensuring that the services we are looking for into fit within the electronically supplied service definition we must also make sure that the service has not been specifically listed in the exclusion list. 

One crucial aspect is the eligibility of the list.  We must bear in mind that the rules change from country to country.  In Malta, the list is determined by the VAT Act, which albeit listing the services, it's clearly stated that the list is indicative and not exhaustive. 

The following are the items listed by the VAT which are to be excluded:

• The purchase of goods over the internet or an electronic network, where the order is processed electronically.
• The supply of books, newspapers, newsletters or journals disseminated electronically on tangible media, such as audio books or books published on CDs, DVDs, SD-cards or USB drives, even where these are ordered over the internet.
• The purchase of services over the internet or an electronic network, where the order is processed electronically but the services are delivered in a traditional manner, such as accommodation, car-hire, restaurant services and passenger transport services.
• The online purchase of tickets to physically attend a cultural, artistic, sporting, scientific, educational, entertainment, or similar event.
• An interactive online course, where the course content is delivered live by a tutor over the Internet or an electronic network (namely via a remote link), such as a live webinar.
• An online course delivered by a tutor over the internet, where the course content is pre-recorded, but where live support is provided by a tutor;
• The offering of a facility for the placing of bets on the internet or via an electronic network in connection with live horse races and other live sporting events;
• The offering of a facility for internet gambling pursuant to the streaming of a live casino event;
• Conventional auctioneers’ services reliant on direct human intervention, even if the bids are placed over the internet.
• The provision of professional services (such as professional services provided by lawyers and financial consultants), where the services are delivered by e-mail.
• The provision of access to the internet, including the World Wide Web (this service would be classified as a “Telecommunications” service for the purposes of item 10 of Part of the Third Schedule to the VAT Act).

We must point out that the list has been copied directly from the VAT Act so as to avoid giving a different understanding to a different interpretation of the listed services. 

In the next blog post, we'll turn our attention to the customer, once again in relation to electronically supplied services. 

DISCLAIMER

This publication contains general information only and is not a professional advice or services. You should not make any decision on the basis of this information but you should consult a qualified professional.