Global VAT Guide: April 2023 VAT Updates
April 2023 VAT Updates in Lithuania
The Lithuanian Ministry of Finance has presented its proposal for tax reform.
If the proposal is approved, the reforms will come into effect in 2024.
There are many proposed changes in relation to Individual Income Tax and Corporate Income Tax.
In relation to VAT, it is proposed that the VAT registration threshold be increased from EUR 45,000 to EUR 55,000.
April 2023 VAT Updates in Portugal
Deadline for reporting and payment of VAT changes
The following changes in relation to the deadline for payment and reporting of VAT were introduced from January 2023:
- The deadline for the submission of the June VAT return and the Q2 VAT return of the relevant year is the 20th of September; and
- The deadline for VAT liability payments of the June VAT return and the Q2 VAT return for the relevant year is the 25th of September
This change allows a further one month on the standard filing and payment deadlines and only applies to the June and Q2 VAT returns.
Deductions for conference organisers
On 21 December 2022, an amendment of Decree-Law No. 85/2022, was published in the Portuguese Electronic Republic Gazette allowing 100% VAT deductions for conference organisers under NACE code 82300.
NACE code 82300 is the “Organisation of fairs, congresses and other similar events”.
The below expenses relate to the organisation of congresses, fairs, exhibitions, seminars and conferences:
- Expenses for transport and travel for business and its staff, including tolls;
- Expenses related to accommodation, food and drinks;
- Reception expenses, including those relating to the reception of people outside the company; and
- Expenses relating to properties or parts of properties and their equipment mainly intended for such receptions
The amendment came into force on 22 December 2022.
April 2023 VAT Updates in Bahrain
Due to changes in the refund application form, TBI requested from National Bureau for Revenue (NBR) to confirm whether there is a reciprocal list of countries in regard to the VAT refund procedure in Bahrain.
On 6 February NBR answered our inquiry and confirmed, there is no predefined list of countries regarding refunds of Bahrain VAT to non-residents.
NBR provided 2 conditions in relation to reciprocity:
- The country of residence of the applicant refunds VAT to persons registered for VAT in Bahrain; or
- A mechanism agreed upon between the concerned countries is implemented to deal with refund applications submitted by taxable persons residing in Bahrain.
April 2023 VAT Updates in South Africa
On 27 January 2023, the South African Revenue Service (SARS) updated the Interest Rate Table on outstanding taxes, duties and levies and interest rates payable in respect of refunds of tax on successful appeals and certainly delayed refunds.
From 1 March 2023, the interest rate was set to 10.5%.
Some of the recent changes include:
- 9.75% from 1 January 2023 to 28 February 2023;
- 9.00% from 1 November 2022 to 31 December 2022;
- 8.25% from 1 September 2022 to 31 October 2022; and
- 7.75% from 1 July 2022 to 31 August 2022.
April 2023 VAT Updates in the United Kingdom
The Bank of England has announced it will increase the base rate from 3.50% to 4%.
As the HMRC interest rates are linked to the Bank of England base rate, the interest rates for late payment and repayment have increased from 21 February 2023.
Late payment interest (default interest rate) is set at a base rate (4%) plus 2.5% = 6.5%.
Repayment interest (statutory interest rate) is set at a base rate (4%) minus 1%, with a lower limit – or ‘minimum floor’ – of 0.5% = 3% The most recent changes in interest rates are:
| From | Default interest rate applicable % | Statutory interest rate applicable % |
| 21 February 2023 | 6.50% | 3.00% |
| 6 January 2023 | 6.00% | 2.50% |
| 22 November 2022 | 5.50% | 2.00% |
April 2023 VAT Updates in DAC7
Croatia – Law 2338 on Amendment to the Law Administration Cooperation in the Area of Tax adopted on 22 December 2022.
On 22 December 2022, Law 2338 on Amendment to the Law Administration Cooperation in the Area of Tax whereby transposing DAC7 Directive was published.
The reportable taxpayers’ scope, and exclusions, reporting obligations are determined.
Czech Republic – Czech Administration Guide “DAC7 Questions and Answers”.
On 20 December 2022, the Czech tax authorities published their guide on the practical implementation of DAC7 “DAC7 Questions and Answers”.
Responses to the frequently asked questions related to the application of Act No. 164/2013 Coll., on international cooperation in tax administration and the amendment of other related laws, as amended, following the reporting obligation of operators of shared economy platforms are provided in the document.
The guide provides an overview of the reporting obligations, reporting taxpayer’s scope as well as the formalities and the technical requirements to comply with.
Denmark – SKAT Announcement on Registration Requirements
On 4 January 2023, the Danish tax authorities published an official announcement on the effective implementation of DAC7 in Denmark and prompted business that has reporting obligations under the newly introduced regulation to complete their registration within the set timelines.
The announcement includes specific examples to illustrate the reporting taxpayers’ scope and redirects to further reference materials on the reporting formalities to comply with.
Finland – DAC7 legislative Implementation – legislation adopted
On 29 December 2022, the Finnish President signed the Law on the reporting obligation of operators of the digital platform economy in the field of taxation, whereby the EU DAC7 Directive Council Directive (EU) 2021/514 is transposed in the Finnish national legislation.
France – DAC7 Implementation – Decree dated 26 Dec 2022, Administration guidance published 11 January 2023
On 26 December 2022, Decree No. 2022-1661 was adopted and this relates to the reporting obligations of operators of electronic networking platforms
On 11 January 2023, the French authorities published detailed Guidance on the newly introduced reporting obligations of Platform Operators, in the application of the EU DAC7 Directive.
In the guidance the following are discussed, the scope; the due diligence obligations incumbent on the platform operators concerned; the reporting obligations for the platform operators concerned and the reporting procedures.
Germany – DAC7 Implementation – 2 Feb 2023 – Ministry of Finance Letter with practical guidance on procedural aspects
On 2 February 2023, the German Ministry of Finance issued a letter with guidance aiming to support the proper implementation of the Platforms Tax Transparency Act and to address practical issues.
The Letter provides the procedure to follow, reporting taxpayers’ scope, reportable information, and how to collect and validate it.
The Platforms Tax Transparency Act (PStTG) of 20 December 2022 (Federal Law Gazette I p. 2730) introduced a reporting obligation for operators of digital platforms and the cross-border, automatic exchange of information between the tax authorities of the EU member states. The law came into effect on 1 January 2023.
Latvia – DAC7 implementation in Latvia – Law Adopted in Dec 2022, Draft Regulations published in March 2023
On 22 December 2022, the Latvian parliament adopted Amendments to the Law “On Taxes and Fees” OP number: 2022/249A, entering into force 1 January 2023 whereby the DAC7 directive is transposed in Latvian legislation.
On 7 March 2023, the Cabinet of Ministers approved and published the draft regulations developed by the Ministry of Finance on the automatic exchange of information on sellers who earn income using digital platforms.
Romania – DAC7 legislative Implementation – Government Ordinance no. 16/2023 published 31 Jan 2023, Fiscal code amended
On 31 January 2023, Government Ordinance no. 16/2023 was published whereby DAC7 dispositions transposed in Romanian legislation.
In the currently applicable version of the Fiscal Code, Appendix 5 specified the fiscal due diligence procedure, reporting procedure and other rules for Platform Operators.
Slovakia – DAC7 implementation – Registration and User Manuals in Slovak and English published
On 2 March 2023, the Slovak tax administration published bilingual guides on DAC7 registration:
- DAC7 User Registration and Login guide; and
- FAP – DAC7 user manual Financial Administration Portal, in Slovak and in English
Spain – DAC7 implementation in the national legislation
On 27 December 2022, an official press release notified The Council of Ministers had approved the Draft Bill that modifies the General Tax Law with the aim of making effective the transposition of Directive EU 2021/514, known as DAC 7, relative to cooperation in the field of taxation, whose main novelty is the obligation to exchange information with other EU countries obtained through digital platform operators.
The latest update on the Draft Bill was on 13 March 2023, Congoreso de los Diputados published a number of proposals for amendments to the draft Bill.
April 2023 VAT Updates in the Digital Economy
Malaysia
Malaysia announces deferment Imposition of Sales Tax on low-value goods.
Malaysia Sales and Services Tax Authority announced, “The imposition of sales tax on Low-Value Goods (LVG) which was supposed to be effective on 1st of April 2023 has been postponed to a date to be determined later.”
South Africa
SARS Binding Ruling (VAT) 28 (ISSUE 3) Electronic Services Providers.
On 10 February 2023, South African Revenue authorities issued SARS Binding Ruling (VAT) 28 (ISSUE 3) regarding Electronic Services: specific requirements relating to credit and debit notes, exchange rates, and advertised or quoted prices.
The ruling provides useful guidance on the specific requirements electronic services providers should be aware of and comply with.
For example according to section 3.2. of the ruling, “the exchange rate that must be applied is the rate as published by either one of the following three sources:
- The South African Reserve Bank (www.resbank.co.za);
- Bloomberg (www.bloomberg.com); or
- The European Central Bank (www.ecb.europa.eu).
One of the following three options must be used to determine the applicable exchange rate:
- The daily exchange rate is the date that the time of supply occurs;
- The daily exchange rate on the last day of the month preceding the time of supply; or
- The monthly average rate for the month preceding the month during which the time of supply occurs.
Tanzania
Tanzania – Non-resident electronic services providers should use the online tax return filing portal.
The Tanzanian Revenue Authority issued a Public Notice to inform all registered non-resident electronic services providers/suppliers that an online simplified return filing and payment portal has been developed and is ready to use.
VAT the return filing shall commence for the month of February 2023.
The online tax return filing portal and a user manual can be accessed at https://taxpayerportal.tra.go.tz/#/ and https://tra.go.tz
United Arab Emirates
The Ministry of Finance has issued a Ministerial Decision on the Criteria and Conditions for Electronic Commerce for Record Keeping of the Supplies Made.
On 24 February 2023, the UAE Ministry of Finance issued a Ministerial Decision on the Criteria and Conditions for Electronic Commerce for Record Keeping of the Supplies Made.
According to the official announcement, “The decision came following the issuance of Cabinet Decision No. 99 of 2022 on the amendment of some provisions of Cabinet Decision No. (52) of 2017 on the Executive Regulation of Federal Decree-Law No. (8) of 2017 on VAT, which has amended Article 72 of the Executive Regulation and introduced for some taxable persons (whose value of e-commerce supplies of goods and services exceeds AED 100 million) the requirement to keep records of e-commerce transactions according to the Emirate in which these supplies are received. As per the decision, a supply of goods and services shall be considered to be an electronic commerce supply made via an electronic commerce medium where all of the following criteria and conditions are met:
- The goods and services are listed or advertised on an electronic commerce medium;
- The goods and services are ordered through the electronic commerce medium, regardless of whether the payment is made online or not;
- In the case of a supply of goods, the goods are delivered to a location specified by the customer whereby this location is not owned by the supplier nor operated by that supplier; and
- In the case of a supply of services, the services are provided, or the right to receive the services is granted to the customer with minimal or no human intervention
The decision defines an electronic commerce medium as “A website, portal, gateway, interface, platform, marketplace, programme interface (API), or similar application which facilitates the sale of Goods or Services, including electronic means, electronic platform, a store in social media and electronic applications or similar applications.” The decision defining the criteria and conditions for electronic commerce for record keeping of the supplies made, the Federal Decree-Law No. (8) of 2017 regarding value-added tax and its amendments, and Cabinet Decision No. (52) of 2017 regarding the executive regulations of Federal Decree-Law No. (8) for the year 2017 regarding value-added tax and its amendments are accessible in their full form through the website of the Ministry of Finance at: www.mof.gov.ae.
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