The following Value Added Tax guidance note by Tolley provides comprehensive and up to date tax information covering:
This guidance note provides an overview of the anti-fraud measures that have been introduced in respect of trading carbon emissions. This note should be read in conjunction with the Missing trader intra-community fraud guidance note.
See ‘Something Nasty in the Greenhouse’ by Hartley Foster in Tax Journal, Issue 1006, 11 (23 November 2009) (subscription sensitive).
Businesses involved in trading mobile phones and computer chips should read the MTIC fraud – application of the reverse charge to mobile phones and computer equipment guidance note.
Businesses involved in wholesale supplies of gas, electricity and telecommunication services and certain building and construction services should read the Domestic reverse charge - wholesale trading in electricity, gas and electronic communications services and construction labour guidance note.
There are two types of credits: compliance market credits and Verified Emission Reduction (non-compliance credits).
Compliance market credits are derived from the Kyoto Protocol and the EU Emissions Trading System (EUETS). In 2005, the European Union introduced the Greenhouse Gas Emission Trading System (ETS). Under the system each EU country has a carbon dioxide allowance each year and is divided between the installations that are covered by the scheme. If the business that has been allocated part of the allowance has any surplus allowance, this can be sold or banked.
Other organisations can also trade in emissions allowances on the relevant markets. Trading can be within the EU on a carbon exchange and several EU countries have carbon exchanges in operation. The carbon allowance can be traded on a spot or forward basis and the transfers of the carbon allowance (EUA) is
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