TaxCorporate TaxTime-share firms boosted by VAT decision

Time-share firms boosted by VAT decision

Time-share exchange operators could win VAT refunds after court decision

A recent court case could open up VAT refunds for operators who help
time-share exchanges for properties located outside the UK.

The case, involving RCI Europe, saw the tax judges decide that, as
facilitators of a timer-share exchange agreement, VAT should be paid by RCI
based on the location of the owner’s property, not the location of operator RCI.

For properties outside the EU the exchange service is not liable for VAT. If
within the EU then local VAT rates, based on the property’s location, apply.

“This decision could mean a VAT refund worth thousands of pounds for the
growing number of UK businesses which facilitate time-share exchanges. It could
also be good news for organisations which offer fractional ownership on a
portfolio of properties,” Hannah Dobson, VAT director at Smith &
Williamson, accountants and financial services group.

“Although this is a good news story for many UK businesses, those who deal
with property across the EU will have to get up to speed with differing rates of
VAT applied by different countries.”

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