International VAT Rate Round Up: November 2024

The November edition of our International VAT Rate Round Up highlights the latest updates from Columbia, Estonia, Finland, and Spain.

Columbia

On 10 September 2024, the Ministry of Finance and Public Credit published the financing regulations for the General Budget of the Nation, along with other provisions under PL.300-2024C-LEY-DE-FINANCIAMIENTO.

Several important VAT-related changes are outlined in the new regulations, which will take effect in January 2025.

Some of the key updates include:

• Online games of chance and luck, which were previously outside the scope of VAT, will now be taxable at the standard VAT rate of 19%
• Hybrid vehicles, currently subject to a reduced VAT rate of 5%, will now be taxed at the standard rate of 19%
• Hotel services provided in municipalities with a population of less than 200,000 inhabitants will be excluded from the VAT scope entirely.

These changes will come into force upon the law’s promulgation and are expected to impact VAT compliance for businesses in the relevant sectors.

Estonia

From January 2025, like there are some important VAT rate changes coming into effect in Estonia.

Below is a summary of the key changes:

• Accommodation Services (including accommodation with breakfast):
  • The VAT rate for accommodation services will increase from 9% to 13%. This includes both traditional accommodation and those services that include breakfast

• Press Publications (both physical and electronic):
  • The VAT rate for press publications will rise from 5% to 9%, aligning it with the VAT rate applied to books and educational literature, which also move to the 9% rate.

5% VAT Rate Discontinued: The 5% VAT rate will be phased out entirely from January 2025.

Finland

The Finnish Tax Administration announced proposed changes to the country’s VAT rates, which are set to come into effect on 1 January 2025, if approved.

The changes will impact a variety of products and services, with the goal of reducing VAT for some essential items and services, while increasing it for others. Here’s a breakdown of the key proposed changes:

VAT rate increase from 10% to 14% for the following:

• Books;
• Medicines;
• Sports services;
• Passenger transport;
• Entrance fees to cultural, entertainment, and sports events; and
• Accommodation

VAT rate change from 14% to 25.5% for the following:

• Menstrual and incontinence protection; and
• Children’s diapers

VAT rate will remain at 10% for the following:

• Newspapers;
• Magazines

If the proposal is approved by parliament, these changes will come into effect on 1 January 2025.

Spain

On 25 October 2024, Order HAC/1167/2024 of 17 October was published, completing the adoption of the administrative regulations concerning the changes to VAT reporting forms 322 (Periodic VAT Return – VAT Group) and 390 (Annual VAT Return).

The updated regulations reflect the recent changes in VAT rates for certain basic food items (e.g., bread, flour, cheese, olive oil) for the period 1 October to 31 December 2024, and going forward.

The reduced VAT rate of 2% applies to specific basic food products, while a 7.5% VAT rate is applicable during this period.

The order also incorporates temporary equivalence surcharge rates (recargo de equivalencia) for the same period:

• 0.26% for certain goods; and
• 1% for other goods.

The provisions of this order will enter into force on 1 November 2024.

The updated Form 322 will be used for the October 2024 VAT self-assessment, reflecting these temporary VAT rates and equivalence surcharges. For annual reporting, the updated Form 390 will be used to compile all relevant data for the 2024 fiscal year, including the new VAT rates and surcharges.

Stay Up to Date with Our VAT Newsletter

To ensure you remain informed about the latest VAT news, trends, and topics from around the globe, subscribe to our VAT Newsletter. Each month, we deliver insightful updates straight to your inbox, helping you stay ahead of the curve.

Partner with Real VAT Experts

With decades of experience in VAT compliance and consultancy, our team at Taxback International stands ready to assist you. We offer comprehensive expertise across all countries and languages where VAT obligations exist.

International VAT Rate Round Up: October 2024

If you missed out on our October VAT rate announcements of VAT threshold changes, you can catch up now.

Taxback International

Taxback International’s innovative tax technology and experienced tax professionals to provide VAT Compliance and VAT Reclaim services to global businesses. Find out more about our range of technologies:

Comply: End-to-end VAT Compliance Platform

VATConnect: VAT Reclaim Platform

TBI Pay: Global Payments Solution