Global VAT Guide: October 2022 VAT Updates
October 2022 VAT Updates in Austria
On 23 August 2022, the Austrian Ministry of Finance published a Federal Court judgment dated 15 July 2022 (RV/2100130/2022) clarifying the Austrian practices in the light of the ECJ case law.
BMF publication states that the right to input tax deduction must be exercised for the period in which this right arose and the taxpayer is in possession of an invoice (case law of the ECJ of April 29, 2004, C-152/02; of September 15, 2016, C-518/14; of 21.3.2018, C-533/16).
Section 20 (2) no. 1 UStG 1994 is also to be interpreted in this sense.
The deductible input tax amounts “fall” in principle in the assessment period in which all the requirements are met, i.e., the service recipient also has an invoice.
The Federal Court judgment explicitly states that despite the fact that the Austrian regulations might be considered more beneficial as they might be allowing deduction to be claimed based on the date of issue of the invoice (i.e. in an earlier period), these had been waived by the complainant and the ECJ case-law has been invoked.
October 2022 VAT Updates in Belgium
According to the Belgian database for public records CBE (The Banque-Carrefour des Entreprises), the first number of the VAT ID will become “1” instead of “0” in 2023.
Currently, the “0”-series is being used: “0xxx.xxx.xxx”.
However, this series is reaching its end and once it is exhausted, company numbers will be assigned with the first number being 1: “1xxx.xxx.xxx” (1-series).
It is expected that all of the remaining “0” number variations will be assigned in 2022, so the CBE strongly advises all companies to adapt their applications to use the “1” series VAT numbers by 1 January 2023.
October 2022 VAT Updates in Bulgaria
DAC7
The draft bill whereby DAC7 directive will be implemented in Bulgaria is published by the Ministry of Finances and in a public consultation in the period 23 August to 6 September 2022.
As per the Directive, additional reporting obligations to digital platforms from 1 January 2023 with the first annually filed forms due by end of January 2024.
VAT ID Change
In line with the amendments to the Regulations for the implementation of the VAT Law, the Bulgarian National Revenue Agency will ex officio change the IDs for VAT purposes.
This change will concern natural persons, who are not sole traders and whose ID for VAT purposes is either a single civil number (EGN) or personal foreign number (LNCH) preceded with the text “BG”, but are otherwise entered in the Bulstat Register with a single identification code (EIK).
For these persons, as of 1 October 2022, the official ID for VAT purposes under Art. 94, para. 2 of the law, will automatically be changed to the single identification code (EIK) preceded with the text “BG”, in accordance to the Bulstat register.
October 2022 VAT Updates in Croatia
In September 2022, public consultations on the draft bill were initiated whereby DAC7 directive will be implemented in Croatia.
As per the Directive, additional reporting obligations to digital platforms from 1 January 2023 with the first annually filed forms due by end of January 2024.
October 2022 VAT Updates in the European Union
On 5 September 2022, an amendment in relation to the standard forms and computerised formats that are to be used in relation to Council Directive 2011/16/EU was introduced – the Commission Implementing Regulation (EU) 2022/1467 of 5 September 2022 amending Implementing Regulation (EU) 2015/2378.
Also, a list of statistical data that should be provided by the Member States for the purposes of evaluating that Directive was also mentioned.
The amendments refer to the following:
- A form is to be used for the communication of information on Platform Operators and Foreign platforms;
- Lists of information that must be communicated; and
- Computerised format for the mandatory automatic exchange of information – xml tree structure and elements and attributes specified in Annex XIV.
Information required as per the newly introduced reporting obligations should be collected from 1 January 2023, first due to be reported in January 2024.
October 2022 VAT Updates in Malta
Maltese Tax Authority announced that from 1 September 2022, there will be an increase in the interest rate on unpaid VAT from 0.33% to 0.60% per month.
This will occur every month or part thereof during which the tax remains unpaid.
October 2022 VAT Updates in the Netherlands
The Bill for Amendment of the International Tax Assistance Act to implement Directive 2011/16/EU on administrative cooperation in the field of taxation (DAC7) is at the Dutch Parliament.
On 27 September 2022, the Procedural meeting of Finance within the legislative process is scheduled.
Below is a list of implementation aspects as well as the implementation schedule:
- 1 July 2022 – specifications published and available for consultation by external stakeholders;
- 1 January 2023 – IT support ready and facilities available for registering non-EU platforms; and
- Early 2024 – reporting platform operators will be able to report for reporting the year 2023.
The measures regarding digital platforms will come into effect on 1 January 2023.
That means the platforms will start collecting information about reportable merchants on that date.
Then they will submit that information to be reported to the tax authorities annually for 2023 by 31 January 2024 at the latest.
The platforms carrying out such activities should prepare their reporting systems and register where required to comply with the newly introduced reporting requirements.
October 2022 VAT Updates in the OECD
As part of the OECD’s ongoing work on its assessments and recommendations for future tax administrations, the ADG Advisory and Drafting Group was set up to study the use of VAT-related continuous transaction reporting systems that rely on e-invoices and to produce a report on its findings.
Please click here to find ADG’s findings.
October 2022 VAT Updates in Sweden
On 12 Sept 2022, the Swedish tax administration updated the guide on the One-Stop-Shop (OSS) special return.
The newly added clarification states that a company that is registered in Sweden according to the union scheme must report distance sales to Sweden in the special VAT return (as opposed to goods and/or services sold within Sweden that should be reported in the regular return).
October 2022 VAT Updates in Chile
Chilean tax administration has published a list of non-resident digital service suppliers not registered in the simplified tax regime for the declaration and payment of VAT on digital services.
The businesses that have liabilities should register and collect/report tax due on supplies to Chilean customers or, since 1 August 2022, VAT is to be withheld by the payment institutions.
October 2022 VAT Updates in China
China has announced the launch of the second version of its current e-invoicing system.
The second version will include some important new features.
China will introduce a new type of e-invoice, known as the fully digitalized e-fapiao.
These are different to the original e-fapiao and the paper fapiao.
The fully digitalized e-fapiao pilot program was launched in December 2021 and was further extended into 2022.
The fully digitalized e-fapiao has 17 items of content and there will be six types of fapiao:
- VAT fapiao;
- General VAT fapiao;
- Special VAT e-fapiao;
- General VAT e-fapiao;
- Fully digitalized special VAT e-fapiao; and
- Fully digitalized general VAT e-fapiao
The new fully digitalized e-fapiao can be issued fully through the national e-invoicing service platform and no “medium” will be needed.
The fapiao number will be generated through the platform and taxpayers will no longer need to go through the process of applying to the tax bureau.
October 2022 VAT Updates in Costa Rica
On 3 August 2022, Regulation to Chapter III of Law No. 9518, Law on Incentives and Promotion for Electric Transportation was published.
According to this Regulation, no VAT or reduced VAT rate on electric cars related supplies over the first 5 years.
All new and used electric vehicles up to five years old, regardless of their customs value, spare parts related to the operation of the electric motor, electric vehicle batteries, and recharging dispensers, will be subject to the following exemption scheme:
- Value Added Tax (VAT)
- During the first fiscal period of Law No. 10209, they will be exempt from the total rate of 13% of the Value Added Tax (VAT);
- During the fiscal period following the publication of Law No. 10209, the exemption will be reduced by one percentage point with respect to the previous fiscal period;
- Successively during each subsequent fiscal period, the exemption granted will be reduced by one percentage point until the extinction of the exemption on this tax.
The fiscal period corresponds to twelve months, in accordance with the rules of the Income Tax
- Selective consumption tax and on the customs value defined in Law 6946
- For thirty-six months, counted from the entry into force of Law No. 10209, they will be exempt from the total current rate;
- Then they will have an exempt rate of seventy-five per cent (75%) for thirty-six months;
- Another thirty-six months with an exemption of fifty per cent (50%); and
- Another thirty-six months with a rate of twenty-five per cent (25%).
October 2022 VAT Updates in the Dominican Republic
The Dominican Republic is preparing to transition to mandatory e-invoicing.
Up until now, e-invoicing (e-CF) has been voluntary since 2019.
There is a gradual rollout planned:
- 2023 for large businesses;
- 2024 for medium to large businesses; and
- 2025 for small businesses.
October 2022 VAT Updates in New Zealand
Platform Economy
The Taxation (Annual Rates for 2022–23, Platform Economy, and Remedial Matters) Bill (No 2) was introduced into the New Zealand Parliament on 8 September 2022.
Some of the changes being introduced are:
- From 1 January 2024, digital platform reporting obligations in relation to the implementation of the OECD’s information reporting and exchange framework for activities being facilitated by digital platforms in the sharing and gig economy; and
- From 1 April 2024, GST on certain listed services arranged via online platforms:
- Accommodation;
- ride-sharing services; and
- beverage and food delivery services.
Draft Bill changes in GST liabilities of the digital economy suppliers
On 30 August 2022, the July 2022 Taxation (Annual Rates for 2022–23, Platform Economy, and Remedial Matters) Bill was introduced to the Parliament.
Due to certain changes, the Bill was withdrawn on 1 September 2022.
Shortly afterwards on 8 September 2022, Taxation (Annual Rates for 2022–23, Platform Economy, and Remedial Matters) Bill (No 2) was introduced after completing the three scheduled readings and getting ascent.
The Bill aims to implement GST changes that will impact the Digital economy.
Some of the changes mentioned are:
- Implement the OECD’s information reporting and exchange framework for activities being facilitated by digital platforms in the sharing and gig economy; and
- Collect GST on accommodation and transportation services provided through electronic marketplaces.
Supplies of certain services (listed services) made through an electronic marketplace and performed, provided, or received in New Zealand will become subject to GST from 1 April 2024.
The listed services are:
- A supply of accommodation services in New Zealand, other than an exempt supply under section14(1)(c); and
- A supply of transport services in New Zealand in the form of:
- ride-sharing services; and
- beverage and food delivery services.
From 2024, the digital economy supplier’s additional reporting obligations will become applicable in line with the OECD for activities being facilitated by digital platforms in the sharing and gig economy.
October 2022 VAT Updates in Puerto Rico
Puerto Rico Ley Núm. 52 del año 2022 amending the Internal Revenue Code adds definitions regarding the Digital Economy related supplies:
- Digital products and combined transactions are listed as taxable items;
- Market Sellers include retail sales through any physical or electronic market; and
- Market Facilitator is listed as a separate category.
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