Global VAT Guide: December 2022 VAT Updates
December 2022 VAT Updates in Austria
From 2 November 2022, a new interest rate of 3.38% for sales tax and appeal will apply.
Below are the other recent changes made to interest rates in 2022:
- 1.88% from 20 July 2022 to 13 September 2022;
- 2.63% from 14 September 2022 to 1 November 2022.
VAT interest applies to both credit notes and payments. The VAT interest must be at least EUR 50.00.
Interest has to be paid on credits from the 91st day after receipt of VAT return/annual return to the taxpayer until the excess is posted to the tax account.
If a VAT return resulting VAT payment and is submitted late, interest has to be paid from the 91st day after the due date in favour of the tax authorities.
The same applies to interest on differences due to subsequent notifications (payable/receivable).
December 2022 VAT Updates in Cyprus
As of 7 October 2022, the domestic reverse charge in Cyprus has been extended and will apply to the purchase of raw and semi-finished precious metals.
This means that if there is a domestic supply of raw and semi-finished precious metals, it will be the business customer to account for the VAT.
December 2022 VAT Updates in Germany
Interest rates on additional tax claims and tax refunds
On 3 November 2022, the Federal Ministry of Finance (BMF) published a new version of the regulation of the interest rates – AEAO on § 233a to implement the changes made in July reducing the interest rate on additional tax claims and tax refunds.
In July 2022, the interest rate was reduced from 6% to 1.8% per year and applies to interest periods starting 1 January 2019.
For all other types of interest – deferral, evasion, litigation, the interest rate remains at 6% per year.
Reciprocity list updated to include Palestinian territories
On 9 November 2022, German Tax Authorities (BMF) issued a letter to update the reciprocity list for foreign VAT refund purposes.
The update includes adding Palestinian territories to the list of countries where reciprocity exists.
Draft bill for a Sixth Regulation on the Amendment of Tax
On October 11 2022, the Federal Ministry of Finance published the draft of the Sixth Ordinance to Amend Tax Ordinances, which aims to change several regulations.
Some of the most important VAT changes included are:
- Changes regarding the possible documentary evidence for the presumption of arrival for intra-Community deliveries (§ 17a Para. 2 No. 1 UStDV) -the aim is that it is clarified that in addition to the previously named proofs of transportation as per the Union shipping procedures, other documentation can also come into consideration to provide proof;
- Change in the way of submitting documentary evidence in the remuneration procedure for entrepreneurs resident in the rest of the community (§ 61 Para. 2 and Para. 5 UStDV)- the aim is that it is clarified that scanned copies of invoices or import documents are sufficient as documentary proof. The Tax authorities can originally invoices and import documents for examination if there is reasonable doubt about the right to deduct input VAT in the amount claimed; and
- Changes in the regulation of the responsibility for entrepreneurs based outside the community area who register in another EU member state for the OneStop Shop procedure -c, the jurisdiction for non-EU companies registered for OSS in another EU Member state is determined based on the country of establishment of the company, while as per the proposed changes, it will be based on country where the OSS registration is done.
December 2022 VAT Updates in Greece
On 21 September 2022, the Greek Tax Authorities issued Decision A1128/2022 in relation to special regimes of e-commerce.
The Decision is valid retroactively for periods starting 1 July 2021.
The Decision determines the following:
- Taxpayers liable to report;
- Competent authority;
- Time and Method of Tax Payment by those registered in the special regimes of articles 47b, 47c and 47d;
- Control of payment of VAT amounts in our country as registration;
- Late payment of the tax by those registered in our country in the special regimes of articles 47b, 47c and 47d 7;
- Procedure to transfer the amounts of the VAT collected in Greece to the member states of consumption;
- Collection procedure by Greece as a member state of consumption of the amounts due of those registered in special regimes analogous to articles 47b, 47c and 47d of other member states;
- Late payment of the tax in Greece as a country of consumption by those registered in special regimes analogous to Articles 47b, 47c, 47d of other member states 11;
- Payment of single declaration tax with corrections relating to previous tax periods;
- Refund of unduly paid sums.
December 2022 VAT Updates in Chile
From 1 December 2022, invoicing in Chile is changing due to resolution 66 coming into effect.
Resolution 66 relates to organisations with foreign currency operations such as banks, financial institutions, stockbrokers etc. Other intermediaries/entities that carry out foreign currency purchase/sale operations or on behalf of third parties are also included.
These organisations must issue the below:
- Electronic invoice;
- Electronic credit note;
- Electronic debit note;
- Electronic ticket; and
- Invoice not affected or exempt electronic.
Resolution 66 also confirms the below are some of the necessary requirements that must be included on electronic documents that support foreign currency purchase/sale operations:
- Name and code of the traded currency;
- Transaction type and detail;
- Exchange rate;
- Amount traded;
- Date of transaction; and
- Total value.
December 2022 VAT Updates in Costa Rica
On 25 October 2022, Costa Rican authorities published a press release and confirmed that the list of cross-border providers of digital services is being updated from 1 November 2022.
In order to improve tax collection, the Directorate General Tax Office updated the list of cross-border digital services providers and supplies are now subject to a VAT rate of 13% from 1 November 2022.
The 13% VAT on cross-border digital services came into effect on October 1 2020. This VAT rate is applicable to cross-border digital services supplied by a non-established supplier through the internet or any other digital platform to final consumers or VAT taxpayers to be used or consumed in Costa Rica.
The new services included in the list are:
- HOMEAWAY; and
These new providers are added to the restrictive list drawn up so that the entities Costa Rican banking companies will collect 13% VAT on digital services supplied cross-border, in compliance with the applicable legislation.
With this update to the list, the number of providers subject to tax now totals 136.
December 2022 VAT Updates in the Dominican Republic
Dominican Republic State Budget 2023 proposal, includes an expected revenue from taxes – 18 % ITBIS (impuesto sobre transferencias de bienes industrializados y servicios (the equivalent of VAT applicable in the Dominican Republic) on digital services supplied by non-established suppliers, such as Netflix, Amazon, though the respective Law whereby such supplies would become taxable has not been approved yet.
December 2022 VAT Updates in Japan
Japan is considering limiting the tax burden on small businesses that will have an obligation to pay consumption tax after the introduction of an invoicing system next October.
For freelancers and small businesses that are currently exempt from consumption tax, the government are considering a change to 20% of the tax amount received through their sales instead of the VAT exemption.
December 2022 VAT Updates in Mexico
Electronic invoice 4.0 (CFDI 4.0) mandatory beginning 1 April
From 1 January 2023, Mexican taxpayers will need to use version 4.0 in relation to sales e-invoices, credit notes, payment receipts and other documents).
Taxpayers may use version CDFI 3.3 until 31 December 2022.
On 1 November 2022, it was announced a three-month extension will be introduced in relation to the issuance of electronic payroll receipts using version 4.0.
Taxpayers will now have the ability to issue electronic payroll receipts using the current version until 31 March 2023 and will need to use version 4.0 from 1 April 2023 to issue electronic payroll invoices.
Digital services providers, registered for VAT in Mexico
The Mexican Tax Authorities published an updated list of Digital Service Providers Registered in the Federal Taxpayer Registry who provide digital services to recipients located in national territory and who are registered in the RFC.
The list now comprises of 162 entities, with five companies added to the list after 1 July 2022.
December 2022 VAT Updates in Nigeria
FIRS public notice 7 November 2022 mentions that from 1 January 2023, telecoms MTN; Airtel; and all money deposit banks appointed withhold or collect VAT charged on all taxable supplies made to them:
c. All money deposit banks (as defined by the CBN Guidelines);
These companies shall remit the tax withheld or collected, in the currency of transaction, to the Service on or before the 21st day of the month immediately following the month the tax was withheld or collected. The tax withheld or collected under this notice shall be remitted in the format prescribed by the Service but separately from VAT due on the companies’ taxable supplies;
According to the Notice a supplier whose output tax is withheld, as provided in this notice, may:
- deduct the input tax paid on the goods purchased or imported to make the taxable supply from the output tax collected on other taxable supplies, and
- where the input tax paid to make the supply is not fully recovered from the output tax on other taxable supplies, the balance is refundable to the supplier; provided that a supplier who is entitled to a refund may utilise the amount refundable to offset future VAT liability or request for a cash pay-out;
- the Service has instituted adequate measures to ensure prompt payment of refundable input tax under this arrangement;
- input tax claims (including refunds) are subject to the limitations imposed by Section 17(2)(a) of the VAT Act; and
- anyone obliged to comply with this notice but fail to comply is liable to the penalty imposed by Section 34 of the Value Added Tax Act (as amended) in addition to other penalties that may be due under relevant laws.
December 2022 VAT Updates in the Philippines
The Philippine News Agency announced on 14 November 2022, that The House of Representatives approved a third and final reading a measure seeking to impose a 12% value-added tax (VAT) on foreign digital service providers, such as Netflix and Spotify.
There were 253 affirmative votes, four negative votes and one abstention. The chamber approved House Bill 4122.
This aims to clarify the imposition of VAT on electronic or online sales of services such as online advertisement services and provision of digital advertising space, digital services in exchange for a subscription fee, and supply of other electronic and online services that can be delivered through the internet.
The bill requires non-resident digital service providers (DSP) to collect and remit the VAT on the transactions that pass through their platform.
It exempts educational services including online courses and webinars of private institutions from the 12% VAT.
December 2022 VAT Updates in Singapore
From 1 January 2023, GST will apply on low-value imported goods purchased by consumers in Singapore from GST-registered suppliers.
If you are a consumer in Singapore, you will need to pay GST on goods valued at $400 or below that are imported into Singapore by post or by air.
From 1 January 2023, consumers must also pay GST on supplies of imported non-digital services purchased from GST-registered overseas service providers. This means that all suppliers of imported services, digital and non-digital, which can be supplied and received remotely will be subject to GST.
December 2022 VAT Updates in Ukraine
Answers to the questions of non-residents who carry out transactions for the supply of electronic services to natural persons published by the Press service of the State Tax Service of Ukraine, on 31 October 31 2022.
Transactions for the supply of electronic services, which were carried out before the date of registration of a non-resident person as a VAT payer but the payment of which took place after such registration, are not subject to VAT taxation and are not reflected in the tax declaration.
The Tax Authorities specified that non-resident persons carrying out operations for the supply of electronic services in the customs territory of Ukraine that are different than B2B, without registration of such a non-resident person as a VAT payer, entails the imposition of a fine on such a non-resident person in the amount of 30 times the minimum wage established by law on January 1 of the reporting (tax) year (Clause 117.5 of Article 117 of the Code). Further clarifications are given on the tax point, formalities to complete registration and the options to arrange the payments of the tax due.
December 2022 VAT Updates in the United Kingdom
On 3 November 2022, the Bank of England voted to increase the Bank of England interest base rate from 2.25% to 3%.
HMRC interest rates are linked to the Bank of England base rate.
As a consequence, HMRC interest rates for late payment and repayment increased:
- From 14 November 2022 for quarterly instalment payments;
- From 22 November 2022 for non-quarterly instalments payments.
The late payment interest (Default interest rate) is set at a base rate (3%) plus 2.5% = 5.5%.
The repayment interest (Statutory interest rate) is set at a base rate (3%) minus 1% = 2%, with a lower limit – or ‘minimum floor’ of 0.5%
This is the eighth change in the interest rates during 2022.
Please see below a synopsis of interest rate changes during 2022:
|From||Default interest rate applicable %||Statutory interest rate applicable %|
|22 November 2022||5.50||2.00|
|11 October 2022||4.75||1.25|
|23 August 2022||4.25||0.75|
|05 July 2022||3.75||0.50|
|24 May 2022||3.50||0.50|
|05 April 2022||3.25||0.50|
|21 February 2022||3.00||0.50|
|07 January 2022||2.75||0.50|
December 2022 VAT Updates in Vietnam
As per Decree No. 53/2022/ND-CP dated 15 August 2022, entry into force 1 October 2022, on the protection of national security and public order in cyberspace, listed industry sector operators are required to store data for at least 24 months in Vietnam.
Among these are e-commerce operators.
Where there may be an excessively high risk of cybersecurity regulations violation the Ministry of Public Security may initiate setting up a branch or representative office.
December 2022 VAT Updates on DAC7 Implementation
On November 2022, draft law to amend and supplement the tax-insurance procedural code 48-202-01-22 submitted to the Parliament.
On 2 November 2022, the Danish authorities published guidance the rules on registration for reporting obligations for digital platform operators according to SIL § 43 and Council Directive (EU) 2021/514 of 22 March 2021 (“DAC7”).
The topics covered:
- Overview of the reporting system;
- About DAC7; and
- On registration of those liable to report.
On 20 October 2022, the Estonian government announced that the approval of the Bill that will require platform operators to submit information to the Tax and Customs Board (MTA) about the sellers and service providers they work with and the revenue they earn.
Data exchange with platforms is currently done on a voluntary basis.
MTA has entered into agreements with some platforms, and these platforms voluntarily provide MTA with information about sellers who have given their consent.
From 2023, platform operators must start collecting information about sellers from both natural and legal persons and send it to the MTA no later than the end of January of the following year.
If the seller refuses to share the data necessary for the platform manager to fulfil his reporting obligation, the platform manager has the right to close his account and prevent him from registering on the platform in the future, as well as the right to refrain from transferring the fee to the seller, if the reminders are ignored.
The reporting rules adopted by the bill derive from EU Directive 2021/514, the preparation of which in turn were based on the model rules for reporting obligations of platform managers prepared earlier by the Organization for Economic Cooperation and Development (OECD).
On 10 November 2022, the Finnish Tax Authority updated their guidance on the Digital platforms: new notification obligation from 2023.
As per the government proposal the operators of the digital platform economy, i.e. the platform operators, have an obligation to inform the Tax Administration of information about sales and rentals made through the platform, as well as the persons and companies that received income from them.
The obligation to collect information about these so-called essential activities begins on 1 January 2023, and the information must be provided annually.
The platform operator must report information on these transactions and related income:
- personal services, for example transport services or audit work;
- sales of goods; and
- renting out residential and commercial apartments, parking spaces and real estate as well as means of transport.
The platform operator must provide an annual report even if there is no information to report for the calendar year.
The tax authorities cover the following topics:
- Who is liable to provide information?
- What are the periods for which data should be collected and reported?
- Way of submission of the data; and
- The purpose of use of the data.
The Lower House of the German Parliament – Bundestag adopted on 10 November 2022, the Law whereby the DAC7 Directive is transposed to the German legislation (Entwurf eines Gesetzes zur Umsetzung der Richtlinie (EU) 2021/514 des Rates vom 22. März 2021 zur Änderung der Richtlinie 2011/16/EU über die Zusammenarbeit der Verwaltungsbehörden im Bereich der Besteuerung und zur Modernisierung des Steuerverfahrensrechts).
There are further steps to complete the adoption of the legislation.
On 4 November 2022, in Magyar Kozlony (Official Gazette) published Law XXXIX (2022. évi XXXIX. törvényaz adó- és egyéb közterhekkel kapcsolatos nemzetközi közigazgatási együttműködés egyes zabályairól szóló 2013. évi XXXVII. törvény módosításáról*) whereby implementing DAC7 directive in Hungary, effective 1 January 2023.
By a letter to the House of Representatives, the State Secretary Van Rij (Tax and Tax Authorities) informs the Senate on the material consequences that may arise as a result of a delayed implementation of the implementation of the EU Data Exchange Directive on the Digital Platform Economy Act. The letter is on occasion of a proposal to postpone adoption view forthcoming Christmas holidays.
Letter to the House of Representatives on the Adjustment of the Share Option Tax Scheme Act and the Implementation Act of the EU Data Exchange Directive on the Digital Platform Economy.
On 30 November 2022, Swedish Riksdag’s announced their decision to approve the committee’s proposal for a Bill introducing new rules on reporting and exchange of information on income from digital platforms (SkU3).
The proposal introduces obligation for Swedish digital platform operators to provide information on the income gained by the people who use the platforms to sell goods or services.
The data must be reported to the tax authority in the country where the platform operator is domiciled. Thereby, an EU directive on administrative cooperation regarding taxation in Sweden is being implemented.
In addition, the OECD’s corresponding rules, applicable when exchanging information between Sweden and countries outside the EU on the same type of data, are also implemented.
Rules are also being introduced that aim to further improve administrative cooperation between the EU’s member states when it comes to direct taxation.
The new rules come into effect on 1 January 2023. Provisions on joint audits, however, only come into effect on 1 January 2024.
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