VAT News:

Goods Covered by Reverse Charging

Reverse charging will apply to the following goods from 01 June 2007:

Mobile Telephones

For the purpose of the reverse charge, mobile telephones include:

• any handsets which have a mobile phone function (i.e. the transmitting and receiving of spoken messages), whether or not they have any other function - it therefore includes other communication devices, such as Blackberry's.
• mobile phones supplied with accessories (such as a charger, battery, cover or hands-free kit) as a single package and
• pre-pay (or 'pay as you go') mobile phones, whether or not the selling price includes an element attributable to the cost of future use of the phones.

However, the reverse charge does not apply to the following:

• mobile phones which are supplied with a contract for air time
• mobile phone accessories which are supplied separately from a mobile phone and
• 3G data cards or WiFi cards.

Computer Chips

• small integrated circuits (i.e. Central Processing Units or CPUs)
• discrete integrated circuit devices (i.e. Microprocessors or Microprocessor Units (MPUs) and Microcontrollers or Microcontroller Units (MCUs) and
• chipsets - the dedicated cluster of integrated circuits which support MPUs.

The reverse charge applies to such items when they are in a state prior to integration into end-user products. Items such as computer servers, laptops or desktop units are excluded from the scope of the reverse charge.

For full information on this subject, and how reverse charging will work, please click here.

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