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 »
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 »
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 »
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 »
In its latest Economic Survey of Switzerland, the OECD called for a rebalancing of the country’s tax mix, recommending shifting that mix towards more growth-friendly sources in order to help prepare the system for the impact of an anticipated wave of aging Swiss citizens.
The OECD observed that Switzerland “relies more on direct taxation and social security contributions than most other OECD countries, at two-thirds of revenues.”
It went on to suggest that government plans, to raise the VAT rate by 0.7 percentage points and reduce disincentives to work for second-earners in families, are steps in the right direction.
The OECD recommended that VAT exemptions and reduced rates should be “wound back” to finance lower personal income taxes, particularly on lower income earners. It added that the cantons could make more use of the recurrent taxation of immovable property and that there is … Read More »
On October 16, the European Commission published a proposal for a Council Implementing Decision enabling Italy to continue restricting the right to deduct input VAT on vehicles-related expenses.
On April 12, 2019, Italy had requested an authorization to continue to derogate from the EU VAT Directive by limiting to 40 percent the right to deduct input VAT charged on expenditure related to motorized road vehicles not wholly used for business purposes. The Commission said that the rate of 40 percent appears to reflect adequately the actual business use of such vehicles.
In addition, Italy requested an authorization to continue to derogate from the VAT Directive by exempting from VAT the use for private purposes of vehicles included in the assets of a taxable person’s business, where such vehicles are subject to a restriction of the right to deduct.
Italy was first authorized to … Read More »
The Japanese government finally went ahead with its plans to increase the standard sales tax rate. The Japanese authorities have been trailing the move for years now, with the potential last minute danger to the introduction of the measure, or the potential last minute savior of the Japanese economy (depending on your perspective) being the likely chilling effect of a sales tax hike on consumer confidence, and with the knock-on effect that is expected to have on spending.
Given the relative weakness of the Japanese economy over the last few years, with its concerns over the impact of an aging population on government receipts, this is a valid worry. However, the increase has now entered into force (following two previous delays), so let the dice fall where they may, economically speaking.
However, in order to mitigate the impact of the rate rise … Read More »
The French authorities have been busy, unveiling plans on September 23 to ensure the payment of value-added tax on items bought by French residents from online marketplaces, as part of a package of measures included in the 2020 Finance Law.
Under the proposals, announced by Minister of Public Accounts Gerald Darmanin during a visit to an Amazon delivery facility near Paris, online marketplaces facilitating sales between third-party sellers and buyers in France will be liable for VAT on these purchases from 2021.
The reforms will also see the creation of a blacklist of online platforms that fail to comply with certain tax and reporting requirements.
In an additional measure, logistics warehouses will be required to keep a record of the origin and destination of packages, and the amount of VAT due, for a period of 10 years.
The measures will also be accompanied by … Read More »
In Europe, on August 29, legislation was signed into law providing for numerous changes to value-added tax rules.
The legislation included the introduction of a mandatory VAT split payment mechanism on certain supplies, whereby when a taxable person acquires goods or services from another taxable person, the portion of the payment to the supplier that is VAT will be deposited separately and automatically to a dedicated account of the seller, in order to satisfy the VAT that is required to be remitted to the tax agency.
Under this mechanism, it was announced, split payments will be mandatory for supplies that are currently subject to the reverse charge mechanism, including:
European Union emissions trading allowances;
automotive parts and accessories;
coal and coal products; and
electronic machinery and equipment and their parts.
The legislation also includes numerous measures intended to simply VAT rules, including through:
the use of the … Read More »
There’s been a lot of activity with regard to VAT and GST internationally recently, not least in Costa Rica, which introduced VAT on July 1, and recently confirmed that public institutions will be subject to value-added tax from 2020.
Costa Rica has introduced a new value-added tax regime, in place of the sales tax, featuring a 13 percent headline rate, and three reduced rates, of four, two, and one percent.
Further bedding in the new system, the Costa Rican tax authority also late this month released new online forms for declaring value-added tax, capital income, and capital gains.
On June 29, 2019, Costa Rica released a step-by-guide guide on how to fill out form D-104, which must be filed by value-added tax registered persons for the first time between August 1 and August 16.
For more information on this, and other topical international tax … Read More »