Global VAT Guide: August 2021 VAT Updates
August 2021 VAT Updates in Belgium
Reduced Rate of Interest
The Belgian Parliament has announced the reduced rate of interest on late VAT payments will be extended for the period Q3 2021.
This means the penalty for late VAT payments will be reduced from 15% to 10% from 1 July 2021 to 30 September 2021.
Tax Administration Portal
Belgium has announced that from 12 July 2021, the below must be filed electronically through the Tax Administration portal:
- VAT registration;
- VAT de-registration; and
- VAT activity amendments
August 2021 VAT Updates in Cyprus
Cyprus is proposing an additional deferral of the due date for VAT payments.
The VAT payments relating to the below periods have already been deferred:
- VAT period ending 31 March 2021 – deferred to 10 August 2021;
- VAT period ending 20 April 2021 – deferred to 10 September 2021; and
- VAT period ending 31 May 2021 – deferred to 10 October 2021
With the current proposal, these VAT payments will be deferred to:
- VAT period ending 31 March 2021 – deferred to 10 October 2021;
- VAT period ending 30 April 2021 – deferred to 10 November 2021; and
- VAT period ending 31 May 2021 – deferred to 10 December 2021;
To be eligible for the further deferral of these VAT payments, VAT returns must be filed on time.
August 2021 VAT Updates in Portugal
In late July 2021, Portugal announced an extension of the filing and payment deadlines for certain VAT returns.
They also changed the period during which PDF invoices will be accepted as e-invoices.
The below monthly VAT returns can be filed up to the 20th day of the second month following the reporting period:
- July 2021 – must be filed by 20th of September 2021
- August 2021 – must be filed by 20th of October 2021
- September 2021 – must be filed by 20th November 2021
- October 2021 – must be filed by 20th December 2021
The payments for the above can be paid until the 25th day of the month in which the VAT returns are filed.
The Q3 2021 VAT return can be filed up to the 20th day of the second month following the reporting period:
- Q3 2021 – must be filed by 20 November 2021
The payment deadline for the Q3 2021 VAT return has been extended to the 25th of November 2021.
Invoices that are in PDF format will be accepted as e-invoices until 31 December 2021.
August 2021 VAT Updates in United Kingdom
The United Kingdom has signed a FTA (Free Trade Agreement) with Norway, Liechtenstein and Iceland. This will support trade relationships with an estimated total worth over £20 billion a year.
Ministers from these countries signed the agreement in London on 8 July 2021.
This deal will help sectors including digital, professional and financial business services and will reduce tariffs and will offer new duty-free quotas on exports of British food and farm products.
There will be tariff reductions and quotas on poultry and pork and there will be the removal of tariffs up to 277% on cheese.
Under the new trade deal, it will be possible to cap mobile operator charges. This will keep costs low for individuals travelling in Norway and Iceland. Norway’s Minister of Trade and Industry has said this deal marks an important step in the relationship between Norway and the United Kingdom.
August 2021 VAT Updates in Thailand
From 1 September 2021, Thailand plans to extend their VAT system to non-resident electronic service providers.
In July 2021, Thailand released their Guide on VAT on Electronic Services Provided to Non-VAT registrants in Thailand by Non-resident Business Person.
This Guide states that electronic service providers from abroad to Thai customers are subject to VAT.
Non-resident electronic service providers and electronic platforms who receive an income of more than 1.8 million baht per year from providing these services to non-VAT registered Thai customers will be required to:
- VAT register;
- File VAT returns; and
- Pay VAT at a rate of 7%
The VAT rate of 7% is a reduced rate and is expected to rise to 10% in October 2021.
Examples of electronic services include:
- Digital music, films and games;
- Software programs;
- Mobile applications;
- Distance teaching using pre-recorded means such as an online course;
- Search engines;
- Streaming services;
- Advertising services; and
- Support services
If the service provided from abroad is not an electronic service such as a consulting service or advertising design provided by email, the recipient of the service in Thailand is required to remit VAT to the Revenue Department using a VAT remittance form.
The below are exempt from VAT and providers of the below are not required to register and pay VAT:
- Magazines; and
- Textbooks in electronic format
Non-resident electronic service providers that are required to register for VAT should do so within 30 days from when the income from providing these services will exceed 1.8 million baht.
It is expected, the Revenue Department will offer the VAT registration service no later than 1 September 2021.
It is possible to voluntarily register for VAT even if income will not exceed 1.8 million baht per year.
The registration form should be submitted electronically via the SVE (Simplified VAT System for e-Service) on the Revenue Department’s website.
VAT returns should be filed monthly, from 1st to 23rd of the following tax month.
Non-resident electronic service providers may be subject to penalties if:
- They conduct business without registering for VAT
- They will be issued with a fine that is twice the tax amount due in the tax month for the duration of non-compliance; or
- 1,000 baht per month
- VAT returns are not filed on time
- They will be issued with a fine twice the tax amount due in the tax month
- Filing an incorrect VAT return that affects the total amount of tax due
- They will be issued with a fine for the affected amount of tax
Failure to pay or remit tax within the filing deadline, they will be subject to a 1.5% charge of payable tax excluding fines.
Non-resident electronic service providers may be subject to criminal offences in the below situations:
- Failure to VAT register and still conducting business
- A sentence of 1 month; or
- A fine of 5,000 baht; or
- Not filing VAT returns
- A fine of 2,000 baht
- Not making reports as advised by Director General
- A sentence of no more than 6 months; or
- A fine of 10,000 baht; or
- Intent to evade or attempting to evade VAT, issuing invoice, debit or credit note without authorisation:
- A sentence from 3 months and up to 7 years; or
- A fine of 2,000 baht to 200,000 baht
The below service providers that provide services from abroad but have no obligation to VAT register in Thailand:
- A service provider that provides a non-electronic service
- A service provider that provides an electronic service to a VAT registrant
In these cases, the Thai customer should be remitting the VAT and submit a VAT remittance form.
It is estimated that this rule change will raise 5 billion baht in its first year.
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