Carbon Border Tax

Global VAT Guide: May 2021 VAT Updates

May 2021 VAT Updates in Bulgaria

Fiscal Representation

Bulgaria announced that businesses established in the United Kingdom that did not have a Bulgarian fiscal representative in place after Brexit by 31 March 2021 face the risk of having their Bulgarian VAT numbers deactivated.

VAT Registration Threshold

The Bulgarian government have proposed a bill that will introduce amendments to the VAT act.

If this proposal is approved, the threshold for mandatory VAT registration will be increased to BGN 166,000 from 1 January 2022.

 The current threshold is set to BGN 50,000.

May 2021 VAT Updates in Croatia

The threshold for the application of the VAT cash accounting scheme in Croatia has increased from HRK 7.5 million to HRK 15 million.

Cash accounting will allow businesses that fall under this scheme to change the way they report and pay VAT on their invoices.

VAT is normally paid and reported to the Tax Authorities for the reporting period in which the invoice falls. For example, for a business that has monthly reporting, an invoice issued in April will be reported in May with the VAT already paid and accounted for.

The cash accounting scheme will mean that companies will not have to pay VAT until the customer pays the invoice. For example, an invoice was issued in April and the client did not pay this invoice until June. The VAT on this invoice will not be paid by the business until June and this would then be reported in the July VAT return.

The cash accounting scheme can hugely benefit small businesses cash flows. Small businesses would no longer have to pay and report the VAT when the customer has not paid their invoices. Customers paying their invoices late can have a hugely negative effect on a business’s cash flow.

Businesses will now only pay the VAT when customers have paid their invoices.

May 2021 VAT Updates in France

France has announced new B2C e-reporting and B2B e-invoicing requirements.

Invoice and accounting data will need to be transmitted to the Tax Authorities.

The new requirements mentioned below will come into effect in January 2023:

  • Mandatory e-reporting obligation on cross-border B2B and B2C transactions; and
  • Mandatory e-invoicing using e-invoicing service providers for domestic B2B transactions

This will be rolled out in phases:

  • In 2023, all companies must be ready to receive e-invoices;
  • In 2021, large companies must be ready to issue invoices;
  • In 2024, the obligation to issue invoices will be extended to intermediate companies; and
  • In 2025, small and medium sized businesses will be subject to the new obligations.

The platform that will be used for this is said to be equivalent to Chorus Pro and should be able to process up to 3 billion invoices per year.

Invoices can be transferred directly or as an excerpt in CSV, JSON, XML and YAML format.

May 2021 VAT Updates in Hungary

The Ministry of Finance in Hungary announced that no penalties will be imposed for late reporting or non-reporting of real-time invoice data in relation to self-billing invoices until 30 June 2021, as long as:

  • The customer does not and is not required to have a Hungarian VAT identification number; and
  • The parties involved agreed that invoices will be issued by the customer on behalf of the supplier under a self-billing agreement

May 2021 VAT Updates in Poland

The Ministry of Finance in Poland announced draft changes in relation to the monthly SAFT file.

Below are some of the changes that will relate to settlements for April 2021:

  • Designation of goods and services (GTU) including:
    • Transactions documented by an internal document (WEW) or a collective document (RO) would not be subject to GTU designations; and
    • Code GTU_01 would only cover alcoholic beverages.
  • The use of a TP code would be limited to supplies of goods or services to a related entity for which the total amount of receivables exceeds PLN 15,000; and
  • Indication that the MPP code (i.e., split payment) can be used to mark not only transactions subject to the obligation to apply the split payment, but also those for which this mechanism was applied voluntarily.

From 1 July 2021, there may be a possibility to collectively report sales receipts that contain NIP numbers for amounts up to PLN 450 as well as invoices that document travel by toll roads issued in ticket form, regarded as simplified invoices.

May 2021 VAT Updates in Portugal

As mentioned in our last newsletter, PDF invoices would be accepted until 30 June 2021.

PDF invoices will now be accepted until 30 September 2021.

The Portuguese Tax Office also announced some changes made to VAT filing and payment dates for 2021:

  • The submission date for April 2021 VAT return is 21 June 2021;
  • The submission date for May 2021 VAT return is 20 July 2021;
  • The submission date for the June 2021 VAT return is 31 August 2021; and
  • The submission date for the Q2 2021 VAT return is 31 August 2021.

May 2021 VAT Updates in Saudi Arabia

From 1 June 2022, all taxable persons must integrate their internal systems with the GAZT’s systems using an API (Application Programming Interface).

Resident taxable persons in KSA will have to comply with the e-invoicing regulations.

E-invoicing regulations will also apply to third parties who are issuing tax invoices on behalf of resident taxable persons.

Non-resident persons that are registered for VAT purposes in KSA will not be required to adhere to the e-invoicing regulations.

The generation of e-invoices and e-notes including provisions that relate to processing and record keeping will come into effect from 4 December 2021.

Transmitting and sharing e-invoices and e-notes with the tax authority will be implemented in phases, beginning 1 June 2022.

The below transactions are excluded from the scope of e-invoicing regulations:

  • Import of goods into the Kingdom;
  • Supplies subject to VAT pursuant to Reverse Charge Mechanism (RCM)
  • Exempt supplies; and
  • Any payments received by a taxpayer that relate to exempted supplies’.

May 2021 VAT Updates in Switzerland

Businesses that do not have an establishment in Switzerland or do not have a VAT registration in Switzerland have until 30 June 2021 to file their claims for VAT incurred in Switzerland in 2020.

If a company has incurred over CHF 500 in Swiss VAT during 2020, a VAT refund claim can be submitted as long as its country of residence grants reciprocal rights to Swiss companies.

Business without an establishment in Switzerland need a Swiss based fiscal representative in order to file a VAT refund request.

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