Global VAT Guide: February 2021 VAT updates
Fiscal Representation requirements
Download the most up to date information on fiscal representation requirements throughout Europe for UK established business, should they require VAT registration.
February 2021 VAT Updates in Germany
The German Ministry of Finance has ruled that it does not consider the EU TOMS rules to apply to businesses established outside the EU.
With effect from 1 January 2021, Germany will apply the general rules to third country tour operators so a VAT registration may be required.
This would mean that non-EU established businesses (including those established in the UK) will be required to register for German VAT and pay German output VAT if buying in and reselling travel services that are taxable in Germany.
This could create multiple VAT registration obligations for non EU established tour operators if other EU Member States follow Germany’s decision.
February 2021 VAT Updates in Greece
From 1 April 2021 Greece will start implementing mandatory e-invoicing and e-books.
This was scheduled for 2020 but this was delayed partly due to Covid-19.
Businesses will be required to make mandatory electronic submissions of transactional data to the myDATA platform.
Greek authorities have specified that businesses must hold the below sets of data digitally:
- E-invoices
- Sales VAT invoices (domestic B2B transactions);
- Records of Purchase e-invoices that have been received; and
- Invoice details (must include accounting code details).
- E-books
- Payroll;
- General Ledger transactions;
- B2C and Cross-border transactions (not included in e-invoice data); and
- Fixed asset transactions.
Businesses will have to update their ERP systems to send invoices to the government portal.
Submission of the data will be on a monthly or quarterly basis (depending on current filing frequency). Data must be submitted before the 20th day after the end of the month in which the invoices were issued.
The Greek Tax Authority will be able to use the myDATA platform to validate Greek companies’ VAT transactions and as a result identify and hopefully prevent tax evasion, fraud and also to reduce the VAT gap.
February 2021 VAT Updates in Hungary
Hungary has had a real time invoice reporting requirement since 1 July 2018.
Taxpayers in Hungary were obligated to provide invoice data in real time to the Tax Authorities for domestic transactions with a VAT value of 100K HUF and above.
This threshold was abolished and now, all transactions between domestic taxpayers fall within the scope of this requirement regardless of the amount of VAT.
Effective January 2021
- All resident taxpayers must use XML version 3.0 in their online invoicing reports; and
- Reporting of B2B invoices is already mandatory but as of 1 January 2021 VAT exempt invoices (reverse charge IC deliveries) and all invoices to private consumers (B2C) must be reported in the Real Time Invoicing Reporting “RTIR” system.
There has been an announcement regarding a grace period until 1 April 2021. The tax authorities are not expected to levy penalties because of missing or incorrect invoice reports until end of March 2021.
After this grace period, the authorities may begin to levy penalties of up to 500,000 HUF for each invoice with missing or incorrect invoice data submission.
There has also been some discussions recently as to whether distant sellers intending to use the One Stop Shop “OOS” in July 2021 would be excluded from the RTIR requirement, however the Hungarian Tax Authorities have confirmed that all foreign distant selling companies will be required to be compliant.
February 2021 VAT Updates in Ireland
The Revenue Commissioners have confirmed the deadline for filing the Annual VAT return of Trading Details (RTD) has been extended to 10 March 2021.
February 2021 VAT Updates in Lithuania
The Council of the European Union has given Lithuania authorisation to apply an increased registration threshold of EUR 55,000 for small businesses.
The previous threshold of EUR 45,000 was last extended until 31 December 2020.
This new threshold will apply from 1 January 2020 to 31 December 2024.
February 2021 VAT Updates in the Netherlands
The government has announced the reintroduction and extension of several COVID-19 related measures.
The government has decided to extend the period during which taxpayers can request a tax payment extension.
The payment extension date was previously 1 April 2021 but this has been extended to 1 July 2021.
Please see below the various situations:
- Taxpayers that have already requested the tax payment extension – the extension will automatically be extended to 1 July 2021;
- Taxpayers that have requested and received the tax payment extension but have not applied for the additional extension (your extension is for an amount below €20,000) – you have the opportunity to apply for this extension until 30 June 2021; and
- Taxpayers that have not applied for the tax payment extension – you can apply until 30 June 2021. If you apply after 1 April 2021, the tax payment extension will be until 1 July 2021.
If the extension is for a tax debt above €20,000 the Dutch Tax and Customs Administration will need additional information.
Businesses will have 36 months to pay back the tax amount that was granted an extension, starting on 1 October 2021.
February 2021 VAT Updates in Norway
From 2022 a new digital VAT return will be introduced.
This will be based on SAF-T codes and will be more detailed than the current VAT returns.
There will be a requirement for more detailed information to be sent to the Tax Authorities. The Tax Authorities will then have the ability to perform more in-depth analysis of each company.
Some things that will be included in the new digital VAT return are VAT adjustments, input VAT and withdrawal VAT.
A new VAT registration system is set to be ready in the first quarter of 2021.
As mentioned, the new digital VAT return will be based on SAF-T codes – consisting of at least 30 VAT codes.
All codes will be available but reporting will only cover accounts/codes where there have been movements/transactions in the relevant period. The return will be modified to each company’s activity.
The Tax Authorities are hoping that many companies will file their VAT returns directly from their accounting system. This should minimise the risk surrounding incorrect numbers being entered in the VAT return. This would also mean there will be less room for manual correction.
The new digital VAT return is set to begin testing in the third quarter of 2021.
This will give companies a short window to test the solution and their compatibility with this before the introduction of the new return in 2022.
It is expected the Tax Authorities will give more information on the transition in early 2021.
February 2021 VAT Updates in Saudi Arabia
The General Authority of Zakat and Tax (GAZT) announced an extension to the waiver of penalties for late tax return filings and late tax payments to 30 June 2021.
This relief is applicable to penalties arising from late tax return filings and late tax payments that were due before 21 January 2021.
There will be new tax penalty waiver rates – these rates will be based on the timing of the liability payment owed to the GAZT.
To fully benefit from the penalty relief, taxpayers must pay the tax liability in full.
If the tax liability is not paid in full, a percentage of the tax penalty will be waived (depending on when the tax liability is paid).
- Taxpayers will be 100% exempt from penalties if the tax amount is fully paid before 21 January 2021;
- Taxpayers will be 100% exempt from penalties if the tax amount is paid during the period January 2021 – March 2021;
- Taxpayers will be 75% exempt from penalties if the tax amount in paid during the period April 2021 – May 2021; and
- Taxpayers will be 50% exempt from penalties if the tax amount is paid by June 2021.
February 2021 VAT Updates in Switzerland
From 1 January 2021, it is mandatory for any business registered for VAT in Switzerland to file their VAT returns electronically.
Swiss Federal Tax Administration (SFTA) created an electronic system that allows for e-filing (TVA).
E-filing was available on a voluntary basis since late 2015 but the uptake had been relatively low as this was optional.
The last VAT return that can be submitted on paper is the third quarter of 2020 VAT return.
The VAT return for the fourth quarter of 2020 will have to be filed electronically.
From 1 January 2021 there will be two options:
- SuisseTax platform (ESTV SuisseTax)
- This has been available since 2015 and allows taxpayers to track processes, apply for deadline extensions, correct previous VAT returns; and
- ESTV SuisseTax sends an automatic reminder to the registered user on upcoming VAT return deadlines
- VAT return easy (MWST Abrechnung Easy)
- This is the new tool and should be available from 1 January 2020; and
- This may be delayed due to COVID-19
The main difference between ESTV SuisseTax and VAT return easy is that VAT return easy (MWST Abrechnung Easy) does not require a registration or creation of an individual account.
It is likely that the new system will have fewer functions for taxpayers in comparison to ESTV SuisseTax.
It is not possible to correct VAT returns or extend deadlines using the new system and XML uploading is not a built-in feature of MWST Abrechnung Easy.
February 2021 VAT Updates in United Kingdom
Fiscal Representation requirements
Download the most up to date information on fiscal representation requirements throughout Europe for UK established business, should they require VAT registration.
Post Brexit VAT treatment of B2B transactions including reverse charge on services
On 31 December 2020, the UK became a third country for VAT purposes. Therefore, for trade with the UK (excluding trade in goods with Northern Ireland), the rules of trade with a non-EU country apply.
It should be noted that Northern Ireland is treated as a Member State regarding VAT on goods but not treated as a Member State regarding VAT on services.
For B2B supply of goods, in summary this means:
- Supplies and movement of taxable goods between Ireland and the Great Britain are subject to the VAT rules on imports and exports.
- You do not have to report details of trade with the UK (excluding Northern Ireland) on the Intrastat system or VIES.
- You do have to report details of trade with Northern Ireland on the Intrastat system or VIES.
- Agreed EU simplifications, such as triangulation, do not apply to transactions involving Great Britain.
For B2B supply of services this means:
If you, as an EU established business, supply or receive general services to/from a UK business, including Northern Ireland, post Brexit, the place of supply continues to be the place where the business receiving the services is established in accordance with the general place of supply of services rules.
The location of the business customer to whom the services are supplied can be:
- where he or she has established their business
- where that person’s fixed establishment is located
or
- in the absence of such place of business or a fixed establishment, the place where he or she has a permanent address or usual place of residence.
Generally, where the business customer is located outside the EU, such as the UK post Brexit, the EU supplier will not charge VAT on its services. Instead, the business customer will self-account for the VAT in their State.
Likewise, generally, if you as an EU established business, receive services from a UK established business, the UK business will not charge VAT on its services. Instead, you should self-account for the VAT in your VAT return in your EU Member State of establishment.
You are treated as if you had made the supply yourself. This is known as self-accounting or reverse charge.
You will also be entitled to reclaim the VAT in the same VAT return if you are a fully taxable business.
International VAT Rate Round Up
The latest VAT rate announcements and VAT rates changes that will come into effect in the coming months. We also review VAT threshold changes.
Read the full story here.
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