A VAT refund worth thousands could be given to businesses operating holiday timeshare exchanges as a result of a new ruling. The ruling focuses on RCI Europe, an operator that assists with time-share exchanges for properties located outside the UK, and which may be in line for a VAT refund. As a result, fees for such future exchanges should be subject to VAT based on the location of the timeshare owner's property, according to Smith & Williamson. 'This decision could mean a VAT refund worth thousands of pounds for the growing number of UK businesses which facilitate timeshare exchanges, said VAT director at Smith & Williamson Hannah Dobson. 'It could also be good news for organisations which offer fractional ownership on a portfolio of properties.' The European Court of Justice has ruled that the exchange service should not be liable to VAT if the property is located outside the EU. But it said that VAT should be charged if the timeshare property being exchanged is within the EU, where a local VAT rate would apply. '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. UK businesses may need to register for VAT with the respective EU countries and be sure to charge the correct amount of local VAT. This could be an administrative headache for smaller firms,' Dobson added.