Global VAT Guide: March 2022 VAT Updates
March 2022 VAT Updates in Belgium
The government has approved a draft decree that would implement e-invoicing for all public administrations in Belgium, B2G e-invoicing. This obligation has previously been introduced in multiple regions in Belgium.
The draft decree is not law yet and so the below dates could change:
- September 2022 – e-invoices for public contracts that are more than EUR 214,000 must be issued within six months after the publication of the decree in the Belgian gazette and on the first of each month;
- March 2023 – e-invoices for all public contracts that are equal to or greater than EUR 30,000 must be issued within twelve months after the publication of the decree in the Belgian gazette and on the first of each month; and
- September 2023 – e-invoices for all public contracts that are less than EUR 30,000 must be issued within eighteen months after the publication of the decree in the Belgian gazette and on the first of each month.
Contracts with a value of less than EUR 3,000 are exempt. Belgium also has plans to introduce mandatory B2B e-invoicing. At present, B2B e-invoicing is permitted as long as both the sender and receiver agree.
Some changes have been made to the Belgian Intrastat declaration. All transaction codes that contained one digit will now contain two digits. Transaction codes consist of a code number in column A associated with its subdivision in column B. This change came into effect with the January 2022 Intrastat.
March 2022 VAT Updates in Czech Republic
From 28 February 2022, the new My Tax (Moje Daně) portal will replace the old tax portal.
Users will need to use the My Tax portal for their administrative and compliance processes going forward.
March 2022 VAT Updates in Netherlands
Netherlands has updated the Intrastat thresholds for 2022.
- Intrastat arrivals has increased from EUR 800,000 to EUR 5 million; and
- Intrastat dispatches has remained at EUR 1 million.
March 2022 VAT Updates in Poland
On 14 February 2022, Poland announced there will be an increase in interest rates for late payments/tax arrears, including VAT and customs.
- The standard rate will increase from 8% to 8.5% per annum;
- The increased rate will increase from 12% to 12.75% per annum; and
- The reduced rate will increase from 4% to 4.25% per annum.
SLIM VAT 3
The Ministry of Finance in Poland has presented a third package VAT simplification known as SLIM VAT 3. The pre consultation was open to everyone until 23 February 2022. In 2021, Poland introduced SLIM VAT and SLIM VAT 2.
SLIM VAT 3 will bring changes to seven different areas:
- International trade;
- Financial liquidity of companies;
- Changes to invoicing and less obligations;
- Broader scope of VAT exemptions;
- Changes in VAT settlement;
- Reduced VAT penalties; and
- Consolidation and standardization of binding information.
Some of the changes will include:
- The sales value limit for small taxpayers will be increased from EUR 1,200,000 to EUR 2,000,000;
- At present, in order to deduct VAT on the intra-Community acquisition of goods, the taxpayer must receive an invoice documenting the transaction within three months from the end of the month of the tax point. If the taxpayer does not receive the invoice within this time, they have an obligation to reduce the amount of input tax in the settlement for the period in which this deadline expired. The SLIM VAT 3 amendment will change this and the input and output tax will be settled in the same settlement period. If the buyer does not receive the invoice relating to intra-Community acquisition by the 15th day of the month after the delivery of goods, they will have to show the input and output tax in the settlement for the period;
- SLIM VAT 3 draft plans to reduce the VAT penalties from 20% to 10% and from 15% to 5% for correcting tax return after inspection; and
- SLIM VAT 3 will allow the funds from the VAT account to be used to pay levies including, sugar levy, retail sales tax and tonnage tax.
The European Commission has granted their approval for Poland to extend the application of the split payment mechanism. This has been extended from 1 March 2022 to 28 February 2025.
March 2022 VAT Updates in Australia
Australia announced they will introduce Business E-invoicing Right (BER) and gradually all businesses will be able to require their trading partners to send their e-invoices over the PEPPOL network.
The government’s proposal will consist of three implementation phases:
- From 1 July 2023, companies can require large trading partners to send e-invoices in PEPPOL format;
- From 1 July 2024, companies can require medium to large trading partners to send e-invoices in PEPPOL format; and
- From 1 July 2025, all companies will be required to exchange e-invoices in PEPPOL format.
From 1 July 2022, the Australian government will adopt e-invoicing in the public sector.
March 2022 VAT Updates in India
E-invoicing has been mandatory in India since October 2020. The Invoice Registration Portal (IRP) validates and approves e-invoices before they are sent to the customer. The IRP generates and assigns invoice reference numbers (IRN) to every GST invoice.
In February 2022, it was announced the threshold for mandatory e-invoicing will be reduced.
Up until now in India, e-invoicing was mandatory if taxpayers exceed an annual turnover threshold of 50 cr (around $6.6 million).
From 1 April 2022, taxpayers with an annual turnover of 20 cr (around $2.65 million) or above must adhere to the e-invoicing rules.
The lowering of the threshold is aimed at reducing tax evasion in small businesses and also to encourage small businesses to embrace the e-invoicing technology. With e-invoicing, it will be very difficult for businesses to underreport their sales.
The threshold has been lowered twice so far:
- Once in January 2021
- From 500 cr to 100 cr
- For a second time in April 2021
- From 100 cr to 50 cr
This threshold change will mean an additional 180,000 GST identification numbers will need to adhere to the e-invoicing rules for B2B transactions.
A company may have more than one GST identification number if the business is run in two or more states or Union territories.
March 2022 VAT Updates in New Zealand
From 31 March 2022, central government agencies will need to begin accepting e-invoices.
This is a big step towards B2B mandatory e-invoicing.
Businesses will need to have a PEPPOL access point and a NZBN, New Zealand Business Number.
March 2022 VAT Updates in South Korea
South Korea has announced they are extending the scope of e-invoicing.
Mandatory e-invoicing for all corporate businesses has been in place since 2011 and from 2012 individual entrepreneurs that meet the threshold have been adhering to the e-invoicing obligations.
The threshold at present is if the total supply for the previous tax year exceeds KRW 300,000,000 (around $250,000) individual entrepreneurs must adhere to the e-invoicing obligations.
From 1 July 2022, the threshold will be lowered to KRW 200,000,000 (around $160,000) and individual entrepreneurs will need to begin issuing e-invoices. If paper invoices are issued, there may be fines
The South Korean tax authority has also announced from 1 July 2023 the threshold will be reduced further to KRW 100,000,000 (around $83,000).
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