Sales Tax


New French Finance Law Published

Posted on January 7th, by Global Tax Weekly in Corporation Tax, Sales Tax. No Comments

On December 30, the French Government published the 2021 Finance Law in the Official Journal.

This included numerous recently announced corporate tax reliefs, including increasing the annual turnover threshold for small companies to qualify for the 15 percent concessionary rate of corporate tax to EUR10m, from EUR7.63m, with effect from January 1, 2021.

In addition, new Article 2b set new withholding tax bands and rates for non-resident individuals’ employment income for 2021, as follows:

income up to EUR15,018, zero percent;
income thereafter up to EUR43,563, 12 percent (or eight percent for recipients situated in overseas French departments); and
income above EUR43,563, 20 percent (or 14.4 percent for recipients in overseas French departments).

Additional measures included reducing the burden of three local level taxes, and proposals to introduce a VAT group regime, enabling groups of companies to be represented by a single entity for VAT purposes and … Read More »


UK VAT Report Begins

Posted on December 23rd, by Global Tax Weekly in Sales Tax. No Comments

The UK authorities have launched a consultation on VAT as it relates to the sharing economy in the UK.

In a new call for evidence on the need for reform of the UK’s VAT rules, the Government noted that the sharing economy (covering services such as ride-sharing and temporary accommodation) creates huge opportunities for the UK economy but also potentially presents certain challenges to the VAT tax base.

Specifically, the call for evidence noted the potential for long-term erosion of the VAT base due to consumers shifting their consumption to the sharing economy. Without reform, this erosion will take place, for instance, because individual suppliers are typically not required to charge and remit VAT because their turnover falls under the VAT registration threshold, the paper said. In addition, as they are not required to register for VAT, their payments of commission fees … Read More »


VAT To Return In Malaysia?

Posted on December 3rd, by Global Tax Weekly in Sales Tax. No Comments

In Malaysia, the Government is reportedly considering reintroducing goods and services tax.

Sales and Service Tax has applied in the country since September 1, 2018. It replaced the six percent goods and services tax – a VAT – which was effectively repealed when the rate was reduced to zero percent from June 1, 2018.

The state news agency reported that the possibility of reinstalling GST had been discussed in comments made by the Finance Minister to Maybank IB Research. The minister reportedly also discussed the potential to raise revenues through a carbon tax or digital tax, or by reining in tax breaks.

For more information on this, and other topical international tax matters, please visit: https://www.cchgroup.com/roles/corporations/international-solutions/research/global-tax-weekly-a-closer-look


UK Clarifies VAT Rules

Posted on October 9th, by Global Tax Weekly in Sales Tax. No Comments

In the UK, while things are gearing up to get more complicated on pretty much all fronts, the tax authority sought to provide clarity certain aspects of the VAT rules, including with regard to the new reverse charge regime for the building and construction industry, now set to come into force in March 2021. (Originally due to be in place from October 2019, the measure had been postponed to October 2020. But now here we are, so…)

HM Revenue and Customs released three publications offering in-depth guidance on the introduction of the VAT reverse charge mechanism on the supply of building or construction services.

Under the new regime, in order to remove the possibility of “missing trader” fraud, a VAT-registered business which supplies certain construction services to another VAT-registered business for onward sale will be not be required to account for VAT, … Read More »


Germany Tackles Missing Trader Fraud

Posted on September 17th, by Global Tax Weekly in Sales Tax. No Comments

In Germany, plans were announced in the draft Annual Tax Act 2020 to impose the VAT reverse charge mechanism on supplies of certain telecommunication services by resellers, following an increase in missing trader fraud related to the provision of voice over IP (VOIP) services.

According to the Annual Tax Act 2020, the fraud involving VOIP services typically centers on sales made by a German company to another Germany company that then resells the services to a foreign business. In the fraud scheme, the reseller does not remit the VAT collected to German authorities from the onward supply, while a refund may be sought by the first company in the supply chain.

Under the proposed change, from January 1, 2021, the recipient of the supply must account for the VAT due on the supply through its VAT return, instead of paying VAT to … Read More »


Ireland Reduces VAT

Posted on September 11th, by Global Tax Weekly in Sales Tax. No Comments

Ireland has reduced its standard rate of VAT from 23 percent to 21 percent from September 1, 2020, with the reduction to be in place until February 28, 2021.

Commenting on the move, Finance Minister Paschal Donohoe explained that: “This temporary reduction in the standard rate of VAT cuts across a wide range of economic activity and as such there is a broad range of the types of businesses and traders who will benefit. Discretion in relation to the setting of prices charged will remain that of relevant businesses. However, it will help consumer confidence, benefit consumers, and generate economic activity if it was passed on to the final consumer.”

However, Ireland is not the only country making moves in the area recently, with Turkey having temporarily lowered the rate of VAT on the supply of education and training services. Under the … Read More »


Costa Rica Introduces VAT On Digital Services

Posted on August 13th, by Global Tax Weekly in Sales Tax. No Comments

Costa Rican Ministry of Finance had confirmed plans to introduce VAT at 13 percent on cross-border digital services rendered by foreign businesses to Costa Rican consumers from August 1. The move was designed to bring the country into line with the BEPS Action 1 recommendations of the OECD on tackling the tax issues of the digitalized economy.

Either digital services providers or payment processing firms are responsible for collecting and remitting VAT on services rendered to Costa Rican consumers. The delay, announced on July 31, is so that financial entities can finalize the necessary computer system changes, the Finance Ministry explained.

For more information on this, and other topical international tax matters, please visit: https://www.cchgroup.com/roles/corporations/international-solutions/research/global-tax-weekly-a-closer-look


Germany And Bulgaria Announce VAT Reductions

Posted on June 19th, by Global Tax Weekly in Sales Tax. No Comments

In Germany, the much discussed fiscal stimulus package has been approved by the Federal Cabinet, paving the way for a reduction in the standard rate of value-added tax from 19 to 16 percent from July 1 to December 31, 2020, with the reduced seven percent rate also cut, to five percent, during the same period.

Bulgaria has followed Germany’s – previously unveiled – VAT reduction for the catering sector, with the Bulgarian Parliament had approved legislation temporarily reducing the rate of value-added tax in this area.

Under the measures, food served in catering outlets will be taxed at the nine percent reduced rate of VAT. However, alcoholic beverages served in restaurants will continue to be taxed at the 20 percent standard rate. This temporary regime will apply from July 1, 2020, until December 31, 2021.

For more information on this, and other topical … Read More »


Ireland Announces COVID Concessions

Posted on May 14th, by Global Tax Weekly in Sales Tax. No Comments

The Irish Revenue has issued guidance on the tax treatment of the supply of emergency accommodation and the donations of gifts of goods or meals supplied in response to the COVID-19 crisis, outlining the application of the Capital Goods Scheme (CGS) to emergency accommodation. The CGS is a mechanism for regulating the amount of VAT reclaimed over the VAT-life, and aims to ensure that the VAT reclaimed reflects the use to which the property is put over its VAT-life.

Revenue said that, as a concessionary treatment, it will not apply the CGS “big swing” adjustment in cases where the change in the proportion of deductible use is a consequence of a capital good being diverted for use as emergency accommodation.

The guidance also explained the VAT treatment of donations of gifts of goods and meals. Generally, where a business donates goods free … Read More »


German VAT Reduction For Catering Industry

Posted on May 7th, by Global Tax Weekly in Sales Tax. No Comments

In an update on the COVID-19-related tax relief measures available to businesses, the German Finance Ministry announced that a regulation is being prepared to temporarily reduce the rate of value-added tax in order to assist the catering sector, and hopefully permit it to remain afloat in the new socially distanced era of eating out.

Under the proposal, food supplied in restaurants, cafes, and similar outlets will be taxed at the seven percent reduced rate.

Currently, food supplied for consumption on catering premises is subject to VAT at the 19 percent standard rate, while supplies of takeaway food are taxed at the seven percent reduced rate. The measure is expected to apply from July 1, 2020, until June 30, 2021.

For more information on this, and other topical international tax matters, please visit: https://www.cchgroup.com/roles/corporations/international-solutions/research/global-tax-weekly-a-closer-look





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