Global VAT Guide: August 2023 VAT Updates
August 2023 VAT Updates in Austria
On 13 July 2023, Bundesrat (Federal Council) approved a bill that will implement an obligation for PSP (Payment Service Providers) to report VAT data.
This new obligation will come into effect on 1 January 2024 and PSPs will be required to provide data on payments they facilitated that are related to cross-border e-commerce transactions.
August 2023 VAT Updates in the European Central Bank
On 21 June 2023, the Governing Council increased the key interest rates by 0.25%.
Accordingly, the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will be increased to 4.00%, 4.25% and 3.50% respectively.
The Member States will have to align their own interest rates for penalties related to late filing of declarations or errors detected by the Tax Administration.
We might expect this to result in increase of the interest rate for penalties throughout the European countries.
August 2023 VAT Updates in Denmark
By Act no. 755 from 13 June 2023 amended, among others, the Danish VAT Law ( LBK nr 760 af 21/06/2016 – Momsloven – Bekendtgørelse af lov om merværdiafgift) .
Some of the changes include:
- The introduction of reverse charge on telecommunication services for onward supplies (supplies referred to in Section 4 of Art. 21c of Danish VAT Law – from 1 January 2024
- Implementation of regulations as to introduce the reporting required by payment services providers for the purposes of the Central Electronic System of Payment information (CESOP)
- The introduction of a new liability to report for VAT registered companies on annual basis, whether exempt with no right deduct VAT activities conducted, a requirement to report provisional and at year end partial deduction calculation
The exempt activities are listed in art. 13 (1) of Danish VAT Law. Some of the exempt activities include:
- public interest activities – i.e., public education, public healthcare;
- Some financial and insurance related activities; and
- Some passenger transport related activities.
The Minister of Taxation will determine the exact date these changes will come into effect.
August 2023 VAT Updates in France
Non-EU Company Registration on New E-Tax Portal
On 12 July 2023, the French tax authority issued Doctrinal publication specifying that “the filing of the declaration of creation accompanied by the supporting documents of the company established outside the EU must now be carried out electronically on the portal of the formalities counter companies accessible online, here.
A company established outside the EU can expressly authorize its tax representative to carry out this formality “.
VAT Group Guidance
On 21 June 2023, the French Tax Administration published the final version of the Guidance on the application of the ‘Single taxpayer (VAT Group) regime.
The guidance reflects the results from the public consultation held in the period from 25 October 2022 to 31 March 2023.
According to the Administration’s announcement:
“Following this consultation, clarifications are made concerning:
- the characterization of the control relationship in the case of associations ((BOI-TVA-AU-10-20-10);
- the arrangements applicable to transactions carried out by members before the establishment of the single taxable person. BOI-TVA-AU-10-30);
- adjustments that may occur when the single taxable person is set up (BOI-TVA-AU-10-30));
- the detailed rules for declaring the evolution of the scope of the single taxable person during the mandatory period. BOI-TVA-AU-20);
- the exercise of the right to deduct in the particular case of individualizable expenditure charged directly to the user members within the single taxable person. BOI-TVA-AU-40)“
August 2023 VAT Updates in Luxembourg
In July 2023, the Chamber of Deputies adopted a bill that will introduce certain requirements for PSPs (Payment Service Providers). From 1 January 2024, PSPs must submit their records of payment data on a quarterly basis if within that quarter a PSP facilitated more than 25 payments that are related to cross-border supplies.
August 2023 VAT Updates in Netherlands
The Upper House of Parliament accepted Bill implementing the Council Directive (EU) 2020/285 on 4 July 2023 regarding special scheme for small businesses.
This directive obliges Member States to make it possible for a small entrepreneur to apply the small business scheme of another Member State if the other Member State has such a scheme.
This will be achieved with the proposed implementation of the Small Business Regulations Directive in the Turnover Tax Act 1968.
From 1 January 2025 it will be possible to apply the small business scheme in other Member States.
August 2023 VAT Updates in Poland
The Sejm (lower house of parliament) has adopted a bill that will introduce a mandatory structured e-invoicing system.
This system will come into effect on 1 July 2024.
Some taxpayers will be exempt as well as vatable persons making exempt supplies. From 1 January 2025, these taxpayers will be obligated to use the system from 1 January 2025.
August 2023 VAT Updates in Sweden
On 26 June 2023, the Swedish Tax Agency clarified the “VAT amount” showing on an invoice does not have to be specified per rate, but it is sufficient if the total amount of VAT is stated.
August 2023 VAT Updates in China
The Ministry of Finance and State Taxation Administration has announced that the current VAT exemption for small scale taxpayers with a monthly turnover of less than CNY 100,000 will be extended to 31 December 2027.
The 1% VAT collection rate for small scale taxpayers without entitlement to input tax has also been extended to 31 December 2027.
These exemptions were due to expire on 31 December 2023.
August 2023 VAT Updates in Philippines
On its 19th Congress on the 3rd of July, the House of Representatives approved VAT exemption for generic and branded drugs or medicine.
With House Bill Nr. 8565 the burden of VAT for generic and branded medicine is shifted to their manufacturers, distributors, and sellers instead of the end customer.
The Department of Health (DOH) and the Food and Drugs Administration (FDA) must submit to Congress a list of generic and branded medicines as defined in this Act.
The generic and branded medicines included in the said list shall be exempted from the payment of Value-Added Tax (VAT) by the consumers and shall be automatically applied upon purchase of the medicine or drug. The said exemption shall be applied notwithstanding any discount such as Senior Citizen’s discount, and Persons with Disability (PWD) discount among others a person may be entitled to.
This Act shall take effect fifteen days after its publication in at least two national papers of generical circulation or Official Gazette.
August 2023 VAT Updates in South Africa
The Zakat, Tax and Customs Authority (ZATCA) exempted its taxpayers from fines, penalties and violations in the past.
This initiative was in place from 1 June 2022 until 30 November 2022.
An extension announced at the end of November 2022 made the amnesty applicable until 31 May 2023.
On 25 July 2023, ZATCA announced a new extension until the end of this year 31 December 2023.
The exemption covers fines for late registration in all tax systems, late payment, late filing of returns fines in all tax systems, and fines to correct VAT returns, as well as fines for violations of VAT field control related to applying the e-invoicing regulations and other general regulations.
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With over 15 years of experience in the area of VAT compliance and consultancy, we handle all countries and languages where VAT obligations exist. We have a dedicated & centralized team of VAT experts, with a reputation of excellence within all global tax offices ready to speak to you about your VAT obligations.
