Global VAT Guide: March 2024
The March edition of the Global VAT Guide, features comprehensive updates on VAT regulations and developments from Belgium, Czech Republic, France, Greece, Poland, Switzerland, Turkey, and the United Kingdom.
Belgium – VAT Account Statements Notifications
Account statements will be issued to all taxpayers again. Previously they were issued only in certain cases. The current account mentions a fine for late filing of a declaration and/or a VAT declaration is missing and/or the current account showed an amount due. This is now abolished and VAT account statements will be created for all. Their creation can take from 6 to 8 weeks. You can view the current status via MyMinfin under ‘My professional applications’.
Belgium – VAT Scheme for Small Businesses
The Belgian government submitted a draft bill in relation to the special scheme for small enterprises, on 16 February 2024. At present, small businesses established/having a fixed establishment in Belgium when their annual turnover does not exceed EUR 25,000 (excluding VAT) can choose to apply an exemption. The draft bill provides for various amendments to this exemption. The exemption does not apply to:
- supplies for which a cash receipt is issued;
- designated construction works;
- immovable property that a taxable person has used in his company and that is sold within 2 years after first use;
- the supplies of old materials, old materials unsuitable for reuse, industrial and non-industrial waste, waste for reuse, partially processed waste and scrap;
- new means of transport purchased by or for the account of the seller or customer that are dispatched or transported to another Member State;
- manufactured tobacco; and
- Supply of fish, shellfish, and molluscs coming directly from fishing vessels
Small businesses that are established in another Member State can request a VAT exemption in Belgium, if their annual turnover in the European Union does not exceed EUR 100,000. Their annual turnover in Belgium must not exceed EUR 25,000. Belgian taxable persons can file a request electronically to the Belgian tax administration for an exemption in another Member State. The exemption must be requested before activities begin; non-resident taxable persons must notify their Member State of establishment. If the annual turnover in the European Union exceeds EUR 100,000, the Belgian tax administration must be notified within 15 days. If the turnover exceeds the threshold of EUR 25,000, the exemption does not apply for 1 year unless the excess does not exceed 10% of the threshold. The new rules will apply from 1 January 2025.
Czech Republic – VAT Scheme for Small Businesses
The Ministry of Finance published a draft bill amending the VAT law. The draft bill proposes to transpose the Amending Directive to the VAT Directive (2020/285) in relation to the special scheme for small businesses. The special scheme aims to reduce the burden of VAT compliance on small businesses. Small businesses can avail of this special scheme if they perform cross-border transactions to other Member States. The changes that are included in this draft law include adjustments in relation to the entitlement to VAT deduction of the registered taxpayer, bad debts, tax refunds and corrections of VAT base. The aim of these changes is to:
- Streamline the VAT administration process
- Increase the legal certainty of taxpayers
- Reduce administrative costs
The majority of changes contained in the draft bill will come into effect on 1 January 2025. Some changes, including refunds for third-country travellers, will come into effect from 1 July 2025. The changes relating to the rules surrounding deductions for certain vehicles will come into effect on 1 January 2027. The draft bill has not been approved yet. Both chambers of parliament will need to approve the draft bill. It must be signed by the President and published in the Official Gazette.
France – NFT
On 14 February 2024, the Tax Authorities released a ruling in relation to NFT’s (transactions using non-fungible tokens) for VAT purposes. There are no particular VAT arrangements that apply to NFT’s but there are two situations that should be recognized:
- Transactions that involve the transfer of ownership of NFT’s do not fall within the scope of VAT-exempt financial or banking transactions
- The NFT serves as a certificate of ownership for a tangible or intangible asset. A transaction that involves an NFT transfer relates to the asset or service it represents not the token itself.
France – VAT Group
The Tax Authorities updated the policy in relation to VAT groups on 21 February, 2024. The deadline for VAT tax representatives to submit a list of members to the Tax Authorities was changed from 31 January to 10 January. This change is effective from 2024. An entity that is not set up or is not subject to VAT when a VAT group is created may join the single taxation entity during the three year mandatory period where the option for the group regime cannot be revoked (provided all other conditions are met)
Greece – Pre-filled VAT Declarations
From 1 January 2024, Greece implemented a new system for VAT declarations. Declarations will now be pre-filled using the data from myDATA digital platform. From 1 January 2024, VAT declarations must adhere to the principle that income cannot be understated, and expenses cannot be overstated from what is reported on MyDATA. There is a deviation from this rule of up to 30% for both income and expenses. The aim to gradually reduce this deviation to zero.
Poland – Digital Platform Operators
Draft legislation (EU) 2021/514 (DAC7) was published on 13 February 2024. The legislation is due to come into effect from 1 July 2024. Some of the rules will be effective for entities that meet the conditions for being recognized as a reporting digital platform operator from 1 January 2023 to 30 June 2024. The DAC7 was due for implementation by the end of 2022. The DAC7 introduces new reporting obligations for digital platform operators. Digital platform operators must disclose certain information to Tax Authorities in relation to income obtained by sellers that operate on these platforms. When this information has been reported to the Tax Authorities, it will be subject to automatic exchange of information between Member States in order to identify any attempts to avoid reporting income from digital platforms.
Switzerland – PDFs equally treated with paper invoices
On 5 January 2024, the Swiss Federal Tax Administration FTA updated VAT Info 16 Bookkeeping and Invoicing. There are some notable changes in section 2.2 Form and content of invoices.
- Regarding the content that invoices should generally contain – the date of supply is required only if different from the date of issue of the invoice
- Regarding the form of the invoices – paper invoices, electronic invoices and digital invoices (e.g. PDF invoices or scanned paper invoices) are treated in the same way as VAT for VAT purposes.
The FTA does not give definitions and differences between the concepts in this publication but has published an ordinance with the technical details and conditions for electronic data interchange (EDI).
Turkey – VAT Implementations
Türkiye has clarified certain aspects of implementing value added tax (VAT) through a General Communiqué. The Communiqué amends the General Communiqué on the Implementation of VAT and explains the amendments to the VAT Law with Law No. 7491. The Communiqué clarifies the below:
- Law No. 7491 has amended the VAT Law. This will allow for VAT deduction due to reverse charges declared through VAT tax return No. 2. The Communiqué clarifies the implementation with examples;
- VAT credit from transactions that result in a refund cannot be offset against the tax liability accrued in the VAT tax return No. 2, submitted due to VAT reverse charges;
- The partial VAT reverse charge limit has been set at TRY 6,900;
- The Communiqué explains the calculation of late payment interest for tax debts in refunds by way of credit due to the decision given by the Council of State and approved by the General Assembly of Tax Law Chambers
- Some services provided to public economic enterprises have been included within the scope of VAT reverse charge – this will come into effect from 1 March 2024
United Kingdom – Import One Stop Shop (IOSS)
On 19 February 2024, the HMRC published for the first-time multiple manuals and guides regarding the Import One Stop Shop (IOSS) scheme. The manuals are covering the following topics:
- VAT Import One Stop Shop Scheme – summary guide;
- Check if you can register for the VAT Import One Stop Shop Scheme;
- Register for the VAT Import One Stop Shop Scheme;
- Cancel or make changes to your VAT Import One Stop Shop Scheme registration;
- Completing an Import One Stop Shop VAT Return;
- Submit your Import One Stop Shop VAT Return; and
- Pay the VAT due on your Import One Stop Shop VAT Return
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