Global VAT Guide: July 2024

The July edition of the Global VAT Guide features comprehensive updates on VAT regulations and developments from Austria, Bulgaria, Hungary, Luxembourg, Romania, India, Taiwan, and the United Kingdom.

Austria

On 4 July 2024, the Ministry of Finance announced plans for inflation relief for taxpayers for 2025.

The planned relief provides adjustments to the first four income tax brackets.

Adding to this, the government has decided to raise the VAT threshold for the small entrepreneur scheme.

The threshold is currently set at EUR 35,000 and this will increase to EUR 55,000 from 2025 onwards.

Bulgaria

In the Official Journal, Nr 45, dated 28 May 2024, the Ministry of Finance published an amendment of Ordinance No. H-10 of 2006 on the refund of VAT paid to foreign persons not established in the territory of the European Union.

According to Part 2 of the new Application Form from 1 January 2025, Bulgaria will refund VAT to claimants based in non-EU countries NOT included in the VAT Refund reciprocity list only for the following expenses:

• fairs, exhibitions, symposia, congresses, and conferences and link to these events expenses such as accommodation, meals, transport; and
• advertising of insignificant value.

Hungary

eVAT System – Submissions

From 1 July 2024, taxpayers will have the ability to correct their VAT returns that were previously submitted and self-revise through the eVAT system.

Taxpayers could already submit their VAT returns through the eVAT system from 1 February 2024.

Self-revisions, rectifications and corrections for VAT returns were only possible through the General Form Filling Program (ÁNYK) until 30 June 2024.

NAV Audit Plan for 2024

On 26 March 2024, the National Tax and Customs Administration (NAV) published the Audit Plan for 2024.

This year there is an emphasis placed on warning taxpayers and urging them to correct discrepancies in data services.

On the basis of audit experience and risk analysis data, the focus is on the below topics:

• (used) motor vehicle and motor vehicle parts trade, as well as motor vehicle repair those carrying out activities, as well as those who sell tires and rims;
• sellers on websites and portals;
• dealers in computer technology and telecommunications products;
• businesses involved in fruit and vegetable wholesale;
• textile retailers and wholesalers;
• enterprises engaged in personal property protection activities, businesses dealing with building management and cleaning, labour hire companies;
• engaged in construction and construction material trading activities;
• taxpayers who distribute and purchase goods and crops related to the food industry and agriculture;
• event organizers, advertising, marketing;
• those engaged in tourism, catering, accommodation service activities, taxi drivers;
• sellers of Far Eastern products;
• taxpayers who earn income from controlled capital market transactions and cryptocurrency;
• internet content providers;
• beauty industry and physical training services (personal trainers and masseurs) [including regularity of employment of other service staff, nutritional supplements sold their origin, their documentary background, the registration of income (proof of daily tickets, monthly passes, buffet products) at the online cash registers].

Luxembourg

On 1 July 2024, the government submitted to the chamber of representatives (chambre de députés) a draft bill implementing Council Directive (EU) 2020/285 of 18 February 2020 and Directive (EU) 2022/542 and Regulation (EU) 904/2010, amending EU VAT Directive (2006/112) regarding the special scheme for small enterprises.

Taxable persons that are established in Luxembourg with an annual turnover in the previous calendar year that has not exceeded EUR 35,000 (EUR 30,000 before 2021) (“small businesses”) may, under certain conditions, be exempt from charging VAT upon their supplies.

On 26 September 2022, the European Commission approved prolonging this exemption through 31 December 2024 (see Council of the European Union Authorizes Luxembourg to Extend Application of Higher VAT Registration Threshold to Small Enterprises (28 September 2022)).

The amendments, which are planned to come into effect from 1 January 2025 are:

• SMEs that provide services that are carried out within Luxembourg by a taxable person established in Luxembourg, can opt for a VAT exemption if the annual turnover does not exceed the threshold of EUR 50,000
  • This option does not apply to agriculture and forestry, VAT groups, taxable persons who have opted for VAT for the supply and rent of real estate, occasional activities, and new means of transport (under conditions);
• Small businesses established in another EU Member State can also opt for applying the exemption if their annual turnover in the EU does not exceed EUR 100,000;
• Small businesses established in Luxembourg can request to apply the exemption for other EU Member States if their annual turnover in the EU does not exceed EUR 100,000; and
• the amendments abolish the minimum application period of 3 years of this exemption.
• By 1 March 2025, taxable persons must inform the tax administration about their turnover of the previous year. The exemption no longer applies if taxpayers exceed the thresholds during the year by 10%.

Romania

The Romanian government released a draft bill for public consultation proposing the procedure and forms for registering into the Mandatory RO e-Invoice Register.

The Mandatory RO e-Invoice Register was recently regulated through EGO (Emergency Government Ordinance) No. 70/2024 and it will be functional from 1 July 2025.

If the below entities have not already opted to use the RO e-invoice system prior to 1 July 2025, the below will have an obligation to register into the Mandatory RO e-invoice Register for invoices issued starting on 1 July 2025

• NGOs;
• Political parties;
• Individual farmers applying the special VAT scheme for farmers; and
• Cults, not VAT registered in Romania under regular procedure and performing economic activities

After 30 June 2025, newly established entities of the entities mentioned above will have an obligation to request registration to the Mandatory RO e-Invoice Register prior to starting economic activities.

Registration will occur within 3 days.

Form (082) “Application for registration in the mandatory RO e-Invoice Register” is proposed for the registration. Once registered, entities will be removed from the Mandatory Ro e-Invoice Register only if they are removed from the Taxpayers’ Register. Using the Tax Identification Number (TIN), the Mandatory RO e-Invoice Register will be accessible for inquiries on the tax authorities’ website.

India

On 1 June 2024, the National Informatics Centre (NIC) released E-Way Bill 2 portal to provide the high availability of e-way bill services.

This system runs in parallel with the E-Way Bill System in Delhi.

The taxpayers and logistics operators can use the existing username and password created and used in the e-way bill portal.

Data from the E-Way Bill 2 portal will be validated, merged, and made available at the primary E-Way Bill portal for all business and analytical purposes.

This portal is also integrated with additional e-invoice portal for e-way bill generation so as not to affect the e-invoice generation with e-way bill.

E-way bills can be generated and updated independently on the E-Way Bill 2 Portal.

Eventually, E-Way Bill 1 and E-Way Bill 2 system will get merged and integrated.

E-Way Bill 2 web Portal will provide the following critical services to the taxpayers and logistic operators:

• Generate E-Way Bills;
• Update Vehicle Details;
• Update Transporter Details;
• Print E-Way Bills; and
• Cancel E-Way Bills

APIs are also available for taxpayers and logistic operators.

Taiwan

Kaohsiung National Taxation Bureau of the Ministry of Finance on 31 May 2024, published an article for the deduction of fuel and repair expenses for employee-owned vehicles used for business purposes.

If an employee uses his own vehicle to engage in business-related work, the input tax paid for refueling and repair costs can be declared and deducted by the company. Conditions for the deduction are a written agreement between the parties and a valid invoice in the company name with all necessary information.

United Kingdom

On 5 June 2024, the HMRC updated Form VAT65A Application for VAT refund by a business person not established in the UK.

Between sections 8 and 9 is included a consent about corresponding with HMRC by email.

The HRMC can only correspond by email if we have the claimant’s consent.

You can read HMRC’s guidance in CC/FS72 DSC1 for information about the risks of using email.

If you tell HMRC that you accept the risks of using email, HMRC will contact you by email.

It is possible to opt out of using email at any time by informing HMRC.

If you’ve opted out, HMRC will contact you at the postal address provided.

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