Global VAT Guide: July 2023 VAT Updates

July 2023 VAT Updates in Belgium

In line with the summer holidays, the following deadlines will be applicable:

• June 2023 VAT return and June 2023 ESL (VIES) – must be filed no later than 10 August 2023 (previously 20 July 2023);
• Q2 2023 Quarterly VAT return and ESL (VIES) – must be filed no later than 10 August 2023 (previously 20 July 2023); and
• July 2023 VAT return and ESL (VIES) – must be filed no later than 8 September 2023 (previously 21 August 2023)

For companies with VAT Credit (in refund situation):

• June 2023 VAT return – must be filed no later than 24 July 2023; and
• July 2023 VAT return – must be filed no later than 24 August 2023

The above deadlines do not apply to:

• Taxpayers licensed for a monthly refund;
• Starters with a quick refund mechanism; and
• Filings for OSS regime

The payment deadlines are not changed:

• June 2023 VAT return – no later than 20 July 2023;
• Q2 2023 VAT return – no later than 20 July 2023; and
• July 2023 VAT return – no later than 21 August 2023

July 2023 VAT Updates in Denmark

From 1 July 2023, new regulations were implemented relating to the interest calculated when VAT payments have not been made by the final payment due date.

The Tax Authorities can now impose interest in the below situations:

• Underpayment of the total amount due;
• If the Tax Authorities decide to correct a taxpayers return; and
• It the taxpayer submits a supplemental return that results in a higher tax liability after the payment due date has passed

Interest will be calculated based on the net change in the additional tax that is owed to the Tax Authority.

A monthly interest rate of at least 0.7% can be levied if there are any errors in the taxpayers VAT and tax accounts that result in an underpayment of VAT.

July 2023 VAT Updates in Norway

On 16 June 2023, the Norwegian Government announced the following amendments to the VAT Act:

Section 4-12 Import of services:

(2) Remuneration stated in foreign currency is converted into Norwegian kroner based on the conversion rate at the time of delivery determined pursuant to section 6-12 of the Transport of Goods Act

Section 9-1 Adjustment or refund of input VAT

Paragraph (2) by capital goods is meant:

1. machinery, fixtures and other operating assets where VAT included in the cost price amounts to at least NOK 50,000, however not vehicles that are exempt from VAT according to section 6-7 first paragraph

Section 10-7 VAT paid on importation of Goods that are re-exported or incorrectly declared:

(2) For goods that are re-exported, cf. first paragraph letters a to d, it is a condition for reimbursement that the goods are re-exported within one year of importation. The deadline can be extended in special cases. The requirement for re-exportation can be waived if the goods are destroyed under the control of or by agreement with the customs authorities against the person who was responsible for the value added tax according to section 11-1 first paragraph bearing the costs.

Section 14-1 Conditions for registration in the VAT register:

(2) Joint registration and voluntary registration according to § 2-3 fourth to sixth subsections can take place at the earliest with effect from and including the task term in which the electronic application for registration is logged in the reception center as approved. Approval is confirmed by electronic receipt.

(3) Voluntary registration according to § 2-3 first and second paragraphs can take place at the earliest with effect from and including a task term that expired in the last six months before the electronic application for registration was logged in the reception center. Approval is confirmed by electronic receipt.”

July 2023 VAT Updates in Spain

Canary Islands, Ceuta or Melilla-based E-commerce Traders – Fiscal Representative

Below is one of the changes introduced via Ley 13/2023 de 24 de Mayo in relation to the need of a Fiscal Representative:

• Entrepreneurs and professionals who have their place of business in the Canary Islands, Ceuta or Melilla are now allowed to benefit from the e-commerce import regime for VAT, without the need to have a representative established in the Community, as was previously the case.

DAC-7

As per Agencia Tributaria press release dated 5 June 2023, Law 13/2023 of 24 May has been published, amending Law 58/2003 of 17 December 2003 on General Taxation, transposing Council Directive (EU) 2021/514 of 22 March 2021 amending Directive 2011/16/EU on administrative cooperation in the field of taxation, and other tax rules.

Some of the amendments made to the General Tax Law are aimed at:

• The transposition of Council Directive (EU) 2021/514 of 22 March 2021 amending Directive 2011/16/EU on administrative cooperation in the field of taxation, known as DAC 7, establishing a new reporting obligation for digital platform operators or the joint inspections regime;
• “The amendments introduced by Law 13/2023 of 24 May aim to improve the existing framework for information exchange and administrative cooperation in the European Union, as well as to extend administrative cooperation to new areas, in order to address the challenges posed by the digitalisation of the economy and to help tax administrations manage taxes in a better and more efficient way”

Effective Use and Enjoyment Rule

On 25 May 2023, Ley 13/2023 was included changes in wording of Art. 70 of the VAT law, as to exclude the supplies of financial and insurance services from the ‘effective use and enjoyment’ rule. These are no longer listed in Art. 70, paragraph (2),

See Excerpt below:

“Likewise, the services listed below shall be considered supplied in the territory of application of the Tax when, in accordance with the rules concerning the place of performance applicable to these services, they are not understood to have been carried out in the Community, Canary Islands, Ceuta or Melilla, but their actual use or exploitation is carried out in that territory:

1. Those set forth in section two of article 69 of this law, whose addressee is not considered an entrepreneur or professional acting as such.
2. The leasing of means of transport.”

Self Revisions

There will be a change in the self-revision in Spain.

Ley 13/2023, de 24 de mayo, published on 25 May 2023, Artículo único. Modificación de la Ley 58/2003, de 17 de diciembre, General Tributaria Section 3, was amended and section 4 was added to article 120.

This announced that the current dual system of submitting corrective returns (self-revisions) will be replaced with the submission of a rectifying self-assessment, in accordance with the provisions of section 4 of this article (la presentación de una autoliquidación rectificativa, )

This came into force on the day following publication of Ley 13/2023 in Official Gazette, the 26 May 2023.

July 2023 VAT Updates in Sweden

A new VAT Act (2023:200) came into force on 1 July 2023.

The Swedish Tax Agency clarified the treatment of racing passenger cars and motorcycles – 50% deduction same as other passenger cars.

The legal assessment remains unchanged, changes are in the terminology and more specifically definitions of racing vehicles.

More information could be found in the Tax Agency’s position form 2006: “Application of the limitations on the deduction of value added tax in respect of passenger cars and motorcycles to vehicles intended for racing” updated on 2 June 2023.

July 2023 VAT Updates in Switzerland

Various proposals are currently in consultation in relation to the VAT law.

The main points are related to digital platforms that deliver goods or provide services on the territory of Switzerland.

Some of these points are:

• Outlining exact definitions for “Digital platform service provider” and “Recipient of service”;
• Sellers who make deliveries by means of a digital platform are subsidiarily liable for the payment of the tax which is due for these deliveries by the person who facilitate them and who is deemed to be the supplier of the service within the meaning of art. 20a.; and
• Describing which services would be outside of the scope of tax and which would be exempt

July 2023 VAT Updates in Isreal

On 14 May 2023, Israel Tax Authority announced the approval of the Continuous Transaction Control (CTC) model in their tax system as part of the economic plan for 2023-2024.

The Tax Authority will operate a digital control system for B2B transactions, by assigning confirmation numbers to invoices at the time they are issued.

According to the approved plan, starting 1 January 2024, the Tax Authority will allocate online a unique number for tax invoices whose value exceeds NIS 25,000, in a descending outline over five years, so that on January 1, 2028, the amount will be NIS 5,000.

From the beginning of the implementation of the plan, it will be mandatory to receive an allocation number from the Tax Authority for invoices in the prescribed amounts, and a tax invoice without an approved allocation number will not be allowed to deduct the input tax.

If there is a reasonable doubt that the invoice is not issued legally, Tax Authority will be entitled to refuse a request to allocate a unique number to invoices, preventing the deduction of input tax in respect of these invoices.

July 2023 VAT Updates in Oman

The Oman Tax Authority has made an announcement regarding electric vehicles (EVs), EV parts, and zero-emission vehicles (hydrogen vehicles) in the Sultanate.

These items will be exempt from VAT, customs tax, and registration fees for 3 years, starting from 1 July 2023.

The zero VAT on EVs will be applicable when:

• The vehicle must be equipped with a fully electric motor or a hydrogen-powered engine;
• Must be registered in Oman as an electric car or a zero-emission vehicle (hydrogen) following the prescribed procedures;
• The EV must also meet the approved specifications and standards in Oman; and

The purchase of EVs and their spare parts must be made from individuals or entities holding a registered VAT account in Oman.

Work with real VAT experts

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.

Taxback International

For over 25 years Taxback International has been a world leader in VAT consultancy and compliance providing expert support to more than 12,000 global clients including Apple, Google, IBM, and Twitter.

With the increasing digitalization of global tax processes, we have developed tailored technology solutions to solve challenges facing companies today.

• Comply – End-to-end VAT compliance platform.
• TBI Pay – Streamlined cross-border payments technology.
• VAT Connect – Cloud-based, automated review of transactional data and images via AI and Machine Learning for Domestic and Foreign VAT Reclaim.