Global VAT Guide: November 2022 VAT Updates
November 2022 VAT Updates in Austria
From 20 July 2022, BMF created an interest rate for VAT, the same as the applicable interest rate for appeal.
This rate is 1.88%.
Some additional information includes:
- This VAT interest rate applies to both payments and credit notes and VAT interest must be at least EUR 50.00;
- Interest has to be paid on credits from the 91st day after receipt of VAT return/annual return to the taxpayer until the excess is posted to the tax account;
- If a VAT return with a VAT payment is submitted late, the interest has to be paid from the 91st day after the due date in favour of the tax authorities; and
- The same applies to interest on differences due to subsequent notifications (payable/receivable).
On 14 September 2022, the interest rate increased to 2.63%.
November 2022 VAT Updates in Belgium
On 28 September 2022, the Belgian tax administration issued Circular 2022/C/99 relating to Royal Decree No. 56 of 10 April 2022. This refers to refunds of VAT in favour of taxable persons established in a Member State other than the Member State of refund and taxable persons not established in the Community, and the Royal Decree of 10.04.2022 amending Royal Decrees Nos 4 and 31 with regard to value added tax.
This is the first comment on Royal Decree No. 56 of 10.04.2022 and Royal Decree of 10.04.2022 amending Royal Decrees Nos.4 and 31 with regard to value-added tax (Belgian Official Gazette of 19.04.2022).
The Decree No 56 of 10.04.2022 introduced legislation regulating the electronic filing of VAT refund applications by non-EU businesses.
The document clarifies the requirements to be fulfilled to avail of the refund procedure – no fixed establishment, no taxable activities in Belgium, and how to assess the pro-rata deduction.
There are further specifications on the formal conditions to be fulfilled, and specific requirements regarding the supporting documents required to be presented.
The document outlines the VAT refund claim processing in the different scenarios that may arise – request additional information, and processing time.
November 2022 VAT Updates in France
On 22 September 2022, the French authorities published the Order of September 22, 2022, relating to the reporting obligations of VAT groups for transactions carried out by their members.
This Order specified the procedures for transmitting information on the transactions carried out by members of a VAT group, and the requirement to report the supplies made for the benefit of the other members that would have been taxable at value-added tax in absence of a VAT group.
November 2022 VAT Updates in Luxembourg
VAT Return Forms
As mentioned in a previous newsletter, the VAT rates will be reduced by 1% from 1 January 2023 – 31 December 2023.
The Luxembourg Tax Authorities reflected these changes in the VAT reporting forms and these will be applicable from 1 January 2023.
VAT Return Forms
The European Council has authorised Luxembourg to extend the VAT registration threshold of EUR 35,000.00 until 31 December 2024.
November 2022 VAT Updates in Poland
Interest on late VAT payments increased
Poland has confirmed the interest rate applicable to late tax and VAT payments will be increased.
The last update is dated 16 September 2022 and the interest rates applicable are as follows:
- Standard interest rate: 16.5% per year;
- Reduced interest rate: 8.25% per year;
- Increased interest rate: 24.75% per year.
VAT Groups
On 14 October 2022, the Polish authorities published, “Tax clarifications regarding the VAT groups”.
As mentioned in a previous newsletter, the effective implementation of the VAT groups was postponed from 1 July 2022 to 1 January 2023.
The aim of the publication of the “Tax clarification” was to present a practical understanding of the provisions of the VAT Act on the VAT groups.
The main purpose of introducing the VAT groups is to stimulate and strengthen investment and development, i.e. by availing of the most important feature of this solution – excluding the transactions between the members from the scope of the tax.
The guidance presents information on:
- Criteria to form a VAT group (financial, economic, and organisation relations between the members);
- Reporting requirements – VAT group specifics – invoicing, JPK VAT, KSEF, reporting cross-border transactions;
- The requirement to keep records;
- VAT liabilities and settlement;
- VAT deduction.
November 2022 VAT Updates in Romania
The Romanian e-Transport system enabling tracking of high-risk goods movements (clothing, footwear among these) entered into force on 1 Jul 2022.
Due to the limited time the businesses had to adapt their reporting and logistics systems, fines for noncompliance were not issued.
By Ordinance 41 2022 published on 21 Sept 2022, this period is extended by 31 Dec 2022 The Ordinance introduces another measure of simplification – the period of validity of e-transport documents – for intracommunity transactions is extended from 5 to 10 days.
November 2022 VAT Updates in Spain
On 6 October 2022, the Spanish State Budget was presented before the parliament.
Among the proposals of amendments to the VAT law (Ley 37/1992, de 28 de Diciembre del Impuesto Sobre el Valor Añadido):
- Place of supply rules – effective use and enjoyment place of supply rules – narrowing the scope of application of the rule in both B2B (to the only rental of means of transport and financial/insurance services) and B2C context (to the listed ‘intangible’ services – advertising, consultants’ engineers, lawyers and to the rental of means of transport);
- Change of domestic reverse charge – whereby adding certain supplies to the scope (i.e. waste, scrap) and excluding others (taxable leasing of real estate where the supplies are made or arranged via the intermediary of non-established businesses);
- Bad debt-related measures aiming to support the taxpayers (i.e. reducing the minimum amount from EUR 300 to EUR 50, more extended period to issue a rectification invoice – from 3 to 6 months; specific bankruptcy credits related dispositions); and
- Specific listed supplies rate changes (i.e. feminine hygiene products, prophylactics).
November 2022 VAT Updates in Colombia
As mentioned in a previous newsletter, Columbia announced a proposal that would see the end of the three-day VAT holiday.
During these days, sales of popular goods would be exempt from the standard 19% VAT rate.
The Colombian government abandoned the proposal to remove the VAT-free days.
There will be two VAT-free days in 2023.
It is believed these VAT-free days will be scheduled for February and August 2023.
November 2022 VAT Updates in The Dominican Republic
The Dominican Republic has confirmed VAT will be charged to foreign providers of digital services to local consumers.
This change will be implemented in 2023.
These changes will mean foreign providers will need to VAT register and report VAT.
The following is a list of services that will be subject to VAT:
- Apps;
- Advertising;
- Online storage;
- e-learning; and
- Gaming etc.
November 2022 VAT Updates in Peru
The Peruvian Tax Authority, SUNAT, has announced the dates that taxpayers must implement the new system to electronically record sales and purchases will be extended.
The new dates for the implementation obligation are as follows:
- From July 2023, taxpayers listed in Annex 7
- This date was previously set to October 2023;
- From July August or September 2023, for those taxpayers who have the obligation to keep electronic accounting records through the Electronic Book Program of the SUNAT
- This date was previously set to October, November or December 2022;
- From October 2023, those taxpayers that as of 30 September 2023 (previously 31 December 2022) are required to keep the sale and purchase register in accordance with the VAT law are not included in the previous two situations mentioned above.
November 2022 VAT Updates in Russia
On October 1 2022, amendments to the Tax Code introduced via Order Federal Law No. 323-FZ dated July 14 2022 came into force.
These amendments include:
- When non-established businesses provide electronic services to Russian companies and sole traders, the place of supply is considered to be the Russian Federation, Russian buyers act as tax collecting agents and must calculate and pay VAT on such services;
The rule above is not applicable where the electronic services are provided by a separate entity of the non-resident business that is located in the Russian Federation.
November 2022 VAT Updates in South Africa
On 1 November 2022, the interest rate on outstanding taxes, duties and levies and interest rates payable in respect of refunds of tax on successful appeals and certain delayed refunds was increased to 9%.
Below is a synopsis of the recent changes to the interest rate:
- 7.25% from 1 March 2022 to 30 April 2022;
- 7.50% from 1 May 2022 to 30 June 2022;
- 7.75% from 1 July 2022 to 31 August 2022; and
- 8.25% from 1 September 2022 to 31 October 2022.
November 2022 VAT Updates in Switzerland
In October 2022, Swiss Tax authorities announced that the ESTV SuisseTax online portal that is used to submit VAT declarations and pay withholding tax will be replaced by the ePortal.
According to the initial announcement:
- The Federal Tax Administration (FTA) is to switch to providing the AFC services via ePortal from 8 November 2022; and
- ESTV SuisseTax will no longer be available after 3 November 2022.
However, due to technical reasons, the transition to the ePortal will start at a later date.
The taxpayers will be automatically transferred to the new portal.
November 2022 VAT Updates in the United Arab Emirates
United Arab Emirates Federal Tax Authority (FTA) announced that a new integrated tax platform “EmaraTax” will be launched in November 2022:
- Taxpayers will be able to pay their taxes, obtain refunds, compile tax returns;
- Federal Tax Authority will better, faster decision-making and earlier engagement with taxpayers’ support;
- The platform will be used by individual taxpayers, tax agents, legal representatives, foreign missions and diplomats, customs bodies, verification agencies; and
- A Mobile App will also be launched shortly after the new platform goes live.
November 2022 VAT Updates in Vietnam
The Vietnamese Ministry of Finance has refused the proposal that would have seen the exemption or reduction of special consumption tax on gasoline.
At 10%, Vietnam’s special consumption is lower than a lot of their surrounding countries and they will not be reducing this tax rate.
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