Global VAT Guide: February 2023 VAT Updates

February 2023 VAT Updates in Bulgaria

In the State Gazette, Nr 5, dated 17 January 2023, the Ministry of Finance published an amendment of Ordinance No. H-10 of 2006 on the refund of VAT paid to foreign persons who are not established in the territory of the European Union.

Some of the changes include:

Art. 3 (1) 3:

• An e-Certificate is acceptable if it can be checked electronically on the official website of the competent tax authority; and
• In addition, if the Certificate is not issued in Bulgarian language, it should be accompanied by an accurate translation into Bulgarian by a sworn translator.

Art. 3 (4) and (6):

• Increase of the minimum VAT Refund threshold for Non-EU applicants

The thresholds become the same as for EU applicants:

• Annual: 100 BGN (50 Euro) / previously 50 BGN;
• Quarterly:  800 BGN (400 Euro) / previously 400 BGN.

New thresholds are in force from 1 January 2023

Art. 4, annex 1:

• New Application Form for VAT Refund for Non-EU applicants.

February 2023 VAT Updates in Czech Republic

The Sales Registration Act has been repealed in the Czech Republic.

Previously the Czech Republic enacted the Sales Registration Act, which meant it was mandatory to report electronic invoices from B2C cash transactions to the Czech Tax Authorities.

From January 2023, the reception of data reports on sales will no longer be registered with the Tax Administration and the cash register will not receive a Fiscal Identification Code (FIC).

February 2023 VAT Updates in Lithuania

On 13 December 2022, the government approved increased fines for VAT breaches to amounts ranging 20% to 100% of the calculated VAT amounts.

Currently, the fines range is 10% to 50% of the calculated VAT amounts.

The amendments will come into effect as of 1 May 2023.

Fines for VAT breaches will be imposed if:

• The VAT payer has unreasonably reduced the estimated amount of VAT payable to the budget or unreasonably increased the estimated amount of VAT refundable from the budget; and
• The taxable person or any other person who is not a VAT payer but is obliged to pay VAT to the budget and has not paid it.

February 2023 VAT Updates in Portugal

On 30 December, the Portuguese Tax Authority approved the State Budget for 2023 with Law no 24-D/2022.

The Budget contains an amendment of the VAT Code, Art. 53 with respect to the threshold for exemption for low turnover, which is increased to EUR 15,000.

The new threshold will apply from 2025.

Below is a summary of applicable thresholds until then:

• EUR 14,500 in 2024;
• EUR 13,500 in 2023;
• EUR 12,500 from 2021;
• EUR 11,000 after 1 April 2020; and
• EUR 10,000 before 31st March 2020.

Additional conditions for the taxpayer to receive the exemption are:

• not having or being required to have organized accounting for IRS or IRC purposes;
• not practising import, export operations or related activities; and
• not performing activities that consist of the transfer of goods or provision of services mentioned in Annex E to this Code (waste, scrap, and recycling).

February 2023 VAT Updates in Romania

It has been announced that Tax Inspections and audits will be carried out from the Tax Administration location instead of the company’s headquarters.

On 28 December 2022, ANAF approved an Emergency Ordinance No. 188/2022 (ORDONANŢĂ DE URGENŢĂ Nr. 188/2022).

The ordinance states that the Tax Inspections and audits will now be performed entirely from the premises of the Tax Administration (ANAF).

It should be noted that in certain cases ANAF might request the audit to be completed in the company’s headquarters.

As per procedure, the Tax Administration will notify the relevant company of the Tax Audit.

February 2023 VAT Updates in China

VAT Draft Law

The first draft of the VAT law was announced in late December 2022.

This new draft VAT law will consolidate a number of existing VAT regulations and will also continue to develop the rules in relation to the OECD recommended guidelines.

Some of the updates include:

• Place of supply rules;
• Taxable activities;
• Consolidate goods and services VAT law;
• Non-taxable supplies extended to include salaries to employees and income from deposit interest;
• Definition of input VAT;
• Changes to non-deductible items;
• Withholding agents;
• Simplified taxation rules; and
• VAT reporting periods.

The Draft is open for comments until 28 January 2023 and contains six chapters.

VAT for Small-Scale Taxpayers

China has confirmed the VAT treatment of small-scale taxpayers – taxable person with business revenues not exceeding CNY 5 million in the last 12 months.

From 1 January 2023 to 31 December 2023, small-scale taxpayers with a monthly revenue not exceeding CNY 100,000 are exempt from VAT.

Small-scale taxpayers that are subject to 3% collection rate will be taxed at 1% collection rate.

This reduction in collection rate applies to advance VAT payments also.

February 2023 VAT Updates in Guatemala

From 14 January 2023, the below requirements must be met:

• Invoices issued to foreign buyers with an amount that is above GTQ 2,500 must mention the purchasers foreign ID; and
• As previously mentioned, the requirement to include the CUI (Unique Identification Code) or the Tax Identification Number for invoices relating to essential services, such as phone bills, energy, water etc, will be eliminated for some invoices
  • The obligation for taxpayers to include the text “final consumer” / “CF”, will only apply to those invoices with an amount below GTQ 2,500.

February 2023 VAT Updates in the Philippines

Taxpayers that are registered for VAT no longer have an obligation to file a monthly VAT declaration.

For transactions relating to 1 January 2023 onwards, the quarterly VAT return needs to be filed within 25 days following the close of each taxable quarter when the transaction transpired.

Below are the filing deadline dates for the first quarterly VAT returns:

• 25 January 2023 – for the quarter ending December 2022;
• 27 February 2023 – for the quarter ending January 2023; and
• 27 March 2023 – for the quarter ending February 2023.

February 2023 VAT Updates in Ukraine

SAF-T

SAF-T will be introduced in Ukraine in phases:

• 1 January 2023 – large taxpayers (if requested):
  • Large taxpayers will have 2 weeks to present their SAF-T file once requested to do so
  • The request will come from a legal entity such as the State Tax Service
• 1 January 2025 – all large taxpayer
• 1 January 2027 – all taxpayers.

Supply of IT Products

From 1 January 2023, the VAT exemption for the supply of software products will no longer be in place.

This VAT exemption was introduced on 1 January 2013.

From 1 January 2023, VAT will be charged on the supply of software products going forward at a rate of 20%.

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