From January 1^st 2010 a series of changes to EU VAT law will be applied which will run through to 2015.  This first phase will especially affect business that trade internationally.  Businesses will need to be compliant with the new regulations in order to avoid potential penalties by 01/01/2010.

Key changes:

1. Place of supply of services.  The rules for determining VAT on international services will change.

   1. The range of Services not to be subject to local VAT when supplied internationally will increase

   2. The principle of taxation at the point of delivery/consumption will be adapted.

2. The Scheme for services supplied electronically as applicable to non-EU businesses will include services such as telecommunication and broadcasting

3. Reporting obligations:

   1. Even more additional filing requirements will be introduced for businesses making intra-EU supplies of services!

   2. Failure to comply may result in severe penalties.

4. The reclaiming of VAT by non-resident EU companies will be reformed to include; electronic filing; structured timetable for processing refund applications and; the right to interest on overdue refunds.