VAT rate changes 2020.
VAT News Updates
24 January 2020: Canary Island, Germany, Czech Republic, Ireland and Italy are some of the countries to be impacted by VAT changes in 2020.
The complex world of International VAT is subject to continually changing legislation, diverse filing requirements and large financial penalties for non-compliance. When the stakes are this high, you need to ensure your company is up to date with the latest VAT rate changes.
Many VAT rates changes have been implemented in January 2020, Taxback International take a look at some of these changes that may affect you.
As of 1 January 2020, the Canary Islands increased the standard VAT rate from 6.5% to 7%. Additionally, the luxury goods VAT rate will increase from 13.5% to 15%.
As of 1 January 2020, there was a reduction in the VAT rate in the hospitality industry for food and preparation and serving (excluding alcohol) outside a catering facility, from 25% to 13%.
From 1 May 2020, the VAT rate for the below will be reduced from 15%/21% to 10%:
- Catering services including serving draught beer
- Audiobooks and e-books
- Sewer and water charges
- Barber services and hairdressing services
- Bicycle repairs
- Repairs and adjustments of clothing
- Textile products
The VAT on feminine products will reduce from 19% to 7% from 1 January 2020.
As of 1 January 2020, there is a reduction in accommodation services from 18% to 5% (tourism development contribution of 4% will be extended to these services).
As of 1 January 2020, a VAT rate of 13.5% for food supplements was introduced. Certain products will be excluded, such as some vitamins, minerals and fortified foods.
As of 1 January 2020, the VAT rate for compostable or washable products for the protection of feminine hygiene has been reduced from 22% to 5%.
From 1 April 2020, the VAT rate on the below goods will reduce from 8% to 5%:
- Bread and cakes
- Soups and broths
- Homogenised and dietetic foods
- Food for infants and toddlers
- Pacifiers, nappies and car seats
- Hygiene products
- Diapers and insoles for babies
From 1 April 2020, the VAT rate for sweet pepper, mustard, specific processed spices and some unprocessed spices (cumin and turmeric) will increase from 5% to 8%.
The VAT rate of below products will increase from 5%/8% to 23% as of 1 January 2020:
- Lobsters and octopus
- Molluscs and aquatic invertebrates (including crabs, crawfish, shrimps)
- Preparations made of these, as well as caviar and dishes sold in catering establishments
As of 1 January 2020, the VAT rate for e-books and electronic journals has been reduced from 22% to 5%.
See more Taxback International Articles
Expected VAT rate changes in 2020.
12th December 2019: Czech Republic, Hungary, Ireland and Poland are amongst the countries to be impacted by VAT rates changes in 2020.
Italy: Pre-prepared VAT return to launch in July 2020.
6th January 2020: Italy takes further action to tackle VAT Gap.
EU VAT system amendments to come into force on January 1st 2020.
5th December 2018: The European Council confirmed four adjustments will be made to the current EU VAT rules in order to improve them.