Sales Tax


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


EU Announces VAT Compliance Changes

Posted on March 5th, by Global Tax Weekly in Sales Tax. No Comments

The European Union has finalized regulations to complete the legislative framework for e-commerce reforms that will be implemented from 2021.

A new Regulation provides details for registration in the VAT One Stop Shop, including the Import One Stop Shop, and for the VAT One Stop Shop return.

Under plans initially approved by the Economic and Financial Affairs Council in November 2017, the EU will extend the existing mini one-stop shop (MOSS) from January 1, 2021.

MOSS was introduced alongside reforms in January 1, 2015, to simplify VAT compliance for firms that faced new rules obligating them to collect VAT on business-to-consumer (B2C) supplies of broadcasting, telecommunications, and electronic (BTE) services based on the location of the consumer, rather than the supplier.

MOSS is to be expanded from 2021 into a “One Stop Shop” (OSS), which will cover:

All B2C supplies of services, including by non-EU … Read More »


American Businesses Seek EU VAT Clarifications

Posted on February 20th, by Global Tax Weekly in Sales Tax. No Comments

On February 14, 2020, AmCham EU, the representative body for American business in the European Union, wrote a request for greater transparency on the progress of the 2021 VAT e-commerce package and its implementation.

The reforms, agreed by EU member states on March 12, 2019, are intended to simplify VAT rules for goods sold online and introduce new obligations on online marketplaces to require them to contribute in the fight against tax fraud.

Under the changes, due to be implemented on January 1, 2021, online marketplaces will be considered to act as the seller when they facilitate sales of goods with a value up to EUR150 (USD162) to customers in the EU by non-EU businesses using their platform. The same rules will apply when non-EU businesses use online platforms to sell goods from “fulfillment centers” in the EU, irrespective of their value, … Read More »


Many EU Member States Fail To Implement VAT Fixes

Posted on February 10th, by Global Tax Weekly in Sales Tax. No Comments

Infringement proceedings have been launched against 14 EU member states for failing to implement the so-called value-added tax quick fixes.

The VAT quick fixes were included in Council Directive (EU) 2018/1910 of December 4, 2018. They are intended to simplify VAT compliance for businesses and strengthen and harmonize existing EU rules ahead of the introduction of more comprehensive reforms to EU VAT law scheduled for 2021.

The four short-term measures provide:

That the VAT identification number of the customer, allocated by a member state other than that in which dispatch or transport of the goods began, should constitute an additional substantive condition for the application of the exemption in respect of an intra-Community supply of goods.
For more uniform rules when determining the VAT treatment of chain transactions, including triangular transactions, clarifying in particular which party should benefit from zero-rated treatment;
New VAT rules for … Read More »


Uzbekistan Announces Reforms

Posted on November 28th, by Global Tax Weekly in Corporation Tax, Sales Tax. No Comments

In Uzbekistan, the government confirmed recently announced changes to the country’s corporate income tax and VAT regimes in the 2020 Budget.

In line with an earlier announcement, the Budget included a cut to the VAT rate to 15 percent from 20 percent effective from October 1, 2019. The Budget also confirmed the Government’s plans to remove the flat rate VAT scheme for certain medium-sized enterprises.

Further, the Budget provided for an increase to the headline corporate tax rate from 12 percent to 15 percent.

Other measures included a reduction in the single social payment from 25 to 12 percent for state enterprises, and legal entities in which the state owns at least 50 percent of its authorized capital, and the introduction of a new tax system for individual entrepreneurs, who will newly pay a fixed tax rate based on their actual income.

For more … Read More »





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