Global VAT Guide: June 2021 VAT Updates

June 2021 VAT Updates in France

From 1 July 2021, non-EU taxable persons will need to request VAT refunds electronically using a French established tax representative. The tax representative must attach a summary table that indicates all invoices or import documents justifying the refund amount claim to an online application. The online application must be accompanied by copies of the invoice or import documents where the taxable amounts shown are equal to or greater than EUR 1,000.

Please note, the threshold is set at EUR 250 if an invoice relates to expenditure on fuel.

June 2021 VAT Updates in Hungary

British companies wishing to obtain a refund of VAT paid in Hungary are now subject to the 13^th Directive refund procedure post Brexit. The refund of Hungarian VAT using the 13^th Directive claim mechanism is only possible if a reciprocity agreement between the country of the claimant and Hungary exists. A reciprocity agreement has recently been concluded between the UK and Hungary, which applies retroactively.

June 2021 VAT Updates in Poland

E-Invoicing

The Ministry of Finance published draft regulations in Poland that states it will be possible to issue structured invoices to document local transactions from 1 October 2021. This would mean structured invoices would be issued and received using the National e-Invoices System (KSeF).

Invoices will be prepared in the taxpayers accounting and financial programs using the template provided by the Ministry of Finance and these will be sent to the e-Invoices system using an API (Application Programming Interface).

The use of structured e-invoices will be optional with potential mandatory e-invoicing planned for all companies by 2023.

VAT Group

In late 2020, Poland submitted draft provisions in relation to the creation of VAT groups in Poland to the EU VAT Committee.

This would mean:

• VAT group would be treated as a separate and single VAT payer. Several companies will appear as one taxpayer before the authorities;
• Supplies provided outside the VAT group would be taxable transactions deemed to be made by the VAT group; and
• Supplies made within the VAT group would be VAT neutral.

The draft provisions included:

• Only companies that belong to a single tax capital group would be able to create a VAT group. This would mean the parent company would have to have its registered office in Poland and would need to meet the conditions for being a CIT taxpayer;
• If a group loses its status for the purposes of corporate income tax, the VAT group would also lose its status; and
• Companies within the VAT group would keep separate, electronic records of intra-group transactions and would be jointly liable for VAT not settled by the VAT group.

The EU VAT Committee had a negative opinion in relation to some of the assumptions contained in the draft provision and stated that the draft was not in line with the assumptions of the Community VAT groups. The strictness of the draft provision would also mean only few companies could benefit from VAT groups.

The Ministry of Finance has been working on easing some of the conditions mentioned in the draft provision.

If the regulations change, this will mean fewer documents and less activities will need to be carried out by the companies’ administration and accounting departments.

The Ministry of Finance is now in the process of pre-consultation of draft legislation. This consultation will last until 7 June 2021.

June 2021 VAT Updates in Portugal

Portugal is preparing to launch a VAT discount programme to boost revenue for its tourism sector. Customers will be given the opportunity to use the VAT included in their bills as credit to use in other tourist venues, such as restaurants and theatres. This will be called the ‘IVAucher’ scheme and is due to come into effect on 1 June 2021. The IVAucher scheme will apply to restaurants, cultural venues and hotels. Customers will decide whether to pay VAT on their bills to the state or they can hold onto the amount as credit and spend this credit in the next quarter in the tourist sector.

• 6% for hotels and cultural venues;
• 13% for restaurants; and
• 23% for alcohol, fizzy drinks.

People that are registered for tax in Portugal are eligible and customers will provide their tax number when paying the bill and the credits will be logged on an online portal.

June 2021 VAT Updates in Romania

Romania has announced an update relating to the VAT return (Form 300) and its instructions for filing. The new rules applied will start with the declaration related to June 2021 VAT liabilities. This must be submitted by 25 July 2021. The VAT return is amended by the inclusion of line 40 in the Regularizations Section. This line relates to the VAT differences established by the Tax Authorities that have been communicated through tax decisions until the date of submitting the VAT return if they have not been paid to the state budget before the submission date.

The amounts that represent VAT that is not considered overdue according to the fiscal provisions will not be included in the VAT return.

June 2021 VAT Updates in India

India made the switch from voluntary to mandatory e-invoicing on 1 October 2020 for larger businesses with an annual turnover greater than Rs 500 crore. Mandatory e-invoicing was extended to businesses with an annual turnover greater than Rs 100 crore from 1 January 2021.

On 1 April 2021, the e-invoicing system was extended to businesses with a total turnover ranging between Rs 50 crore and Rs 100 crore.

The law applies to B2B supplies but certain entities need to generate and print a dynamic QR code for B2C invoices.

From 1 July 2021, the printing of a QR code on B2C invoices generated by businesses will come into effect for those businesses with an annual turnover greater than Rs 500 crore in any year, starting from 2017 – 2018.

Supplies made to an unregistered consumer, B2C invoices, are invoices where the end-user will not claim any input tax credit. B2C invoices are exempt for e-invoicing but it is necessary for a taxpayer to generate a dynamic QR (quick response) code that will enable digital payments on B2C invoices. Invoice Reference Number generation is not required with B2C invoices.

With B2B invoices, QR codes are not created by the taxpayer. They are created by the IRP (Invoice Registration Portal).

With B2C invoices, the QR code can be created using the taxpayers own QR code generating machines and must contain the below:

• GSTIN of the supplier and GSTIN of the recipient;
• Supplier UPI ID;
• Date the invoices was generated;
• Invoice number – given by the supplier;
• Bank account details of the payee and IFSC;
• Payment link;
• Value of the invoice; and
• GST amount along with CGST, SGST, IGST, Cess etc.

QR codes on B2C invoices do not apply to the below:

• Passenger tickets by transport companies;
• Movie tickets;
• A Goods Transport Agency (GTA);
• Turnover below Rs 500 crore in any year, starting from 2017 – 2018;
• An insurance or banking company or financial institution; and
• Non-banking companies.

June 2021 VAT Updates in USA

From 1 July 2021, Kansas is set to introduce a $100,000 threshold calculated on current or previous year turnover from sales of goods and services made by non-resident sellers to consumers in Kansas. This change is relevant for marketplaces facilitating sales into Kansas.

Currently, Kansas does not have a threshold and non-resident sellers or facilitating marketplaces must register in Kansas to collect and remit local sales tax on any sales made in the state.

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