International VAT Rate Round Up: July 2023

July 2023 VAT Changes in Costa Rica

Bill Nr. 23763 is proposing a reduction of the VAT rate for certain types of medical equipment such as dental equipment, radioactive, x-ray, equipment for chemical-clinical laboratories, hospital beds, wheelchairs, walkers, canes, orthopaedic equipment, prostheses to replace bodily functions and/or structures, optical contact lenses, glass optical lenses, plastic optical lenses, disinfectant, cleaning and conditioning solutions for contact lenses, hearing aids, equipment used in rehabilitation and special education programs (Art. 1 and 2 of the Bill).

On 18 May 2023, the Bill was submitted for final approval by the Legislative Assembly.

The Ministry of Health, in conjunction with the Ministry of Finance, should prepare and publish in the Official Gazette the full list of the equipment subject at a 2% VAT rate.

July 2023 VAT Changes in Cyprus

On 15 June 2023, the Council of Ministers decided to adopt a new VAT rate of 3% for certain goods.

Please see below some of the goods that will be subject to 3% VAT rate:

• Deliveries of books, magazines and similar products whether provided on a physical basis or in electronic form;
• Sales of stairs, lifts, etc. for the disabled;
• Sales of wheelchairs for the disabled (even if provided for use by hospitals and clinics);
• Sales of other orthopaedic devices (such as crutches etc.);
• Street cleaning, dog collection services;
• Wastewater disposal and treatment; and
• Right of entry to the first performance of theatrical, musical, dance or classical performances.

And the imposition of a zero VAT rate on purchases of:

• Typewriters with braille characters and special electronic devices; and
• Wheelchairs for the disabled exclusively for their personal use.

July 2023 VAT Changes in the Czech Republic

On 14 June 2023, the Czech Tax Authority published the draft of the new VAT Act combining the two reduced VAT rates (10% and 15%) into a single VAT rate of 12%.

Annex 2 contains a list of services subject to the new reduced tax rate of 12%.

Some of the services are:

• Public transport of persons and their luggage;
• Accommodation services;
• Catering services;
• Granting permission to enter performances, theatres, circuses, amusement parks, concerts, museums, zoos, cinemas, exhibitions, and similar cultural events or facilities;
• Providing access to sporting events; use of indoor and outdoor sports facilities for sports activities.

The new VAT rate is expected to be in force from 1 January 2024.

July 2023 VAT Changes in Estonia

On 19 June 2023, the Estonian Government adopted the VAT rate increase from 20% to 22%.

The increased VAT rate will come into effect from 1 January 2024.

In addition, from January 2025, the VAT rate for Accommodation services also will be increased from 9% to 13%.

The 5% reduced rate for some press publications will be removed and the VAT rate will increase to 9%.

July 2023 VAT Changes in Liechtenstein

Similar to Switzerland, the same VAT rate increase will happen in Liechtenstein.

On 7 June 2023, the Government published in the National Law Gazette amendment of the VAT Act.

From 1 January 2024:

• The standard rate of 7.7% will become 8.1%;
• The reduced rate of 2.5% will become 2.6%; and
• The special rate for accommodation of 3.7% will become 3.8%.

July 2023 VAT Changes in Turkey

Presidential Decree No. 7346 was published on 7 July 2023

The Decree has announced the VAT rates in Turkey will change from 10 July 2023.

The general VAT rate from 18% to 20%.

The reduced VAT rate is also increasing, from 8% to 10%.

The VAT rate on cleaning products has been increased from 8% to 20%.

The reduced VAT rate of 1% is unchanged.

July 2023 VAT Changes in Vietnam

As mentioned in our April newsletter, the Ministry of Finance proposed the VAT rate in Vietnam be reduced from 10% to 8% for the remainder of 2023.

This new rate would apply to all goods and services that are currently subject to the 10% VAT rate.

On 24 June 2023, the National Assembly adopted a Resolution and this includes the passing of the policy that will reduce the VAT rate to 8% for eligible goods and services in 2023.

The reduced VAT rate will be in place from 1 July 2023, until 31 December 2023.

International VAT Rate Round Up: June 2023

If you missed out on June’s VAT rate announcements of VAT threshold changes, you can catch up now.

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