European VAT News - September 2018

Netherlands 

From 1 January 2019, the Dutch tax authorities will increase the reduced VAT rate from 6% to 9%.

This reduced VAT rate applies to a number of different goods and services including accommodation, foodstuffs, pharmaceutical products, domestic passenger transport and books (excluding e-books).

Slovakia

From January 2019, Slovakia are proposing to amend their VAT legislation. Some of the changes being considered include:

  • The adoption of the new EU VAT rules for the treatment of single and multi-purpose vouchers.
  • Complete withdrawal of the VAT guarantee requirement – This will mean that non-EU businesses registering for VAT will no longer need to pay a VAT guarantee to the tax office to protect against possible VAT underpayments.
  • Removal of supplies of agricultural crops and metals products from the local VAT reverse charge procedure, but only if a simplified invoice is issued

Switzerland

From 1 January 2019, the Swiss government will remove the low-value import VAT exemption on goods bought from foreign suppliers.

Currently, the threshold for the exemption is set at CHf 62.50 for most goods and allows importers to purchase goods VAT free from non-resident companies up to this amount.

However, in an effort to remove the unfair advantage that this gives non-resident providers over resident providers of the same goods, the Swiss government confirmed it would remove the low-value threshold from 1 January 2019. Which will mean that non-resident providers will then have an obligation to register and account for VAT on the sale of the low-value goods when their annual (global) sales exceed the CHf 100,000 VAT registration threshold.

The European Union is also proposing a similar removal of its low-value consignment stock relief threshold for 2021, where the current average threshold over the 28 EU member states is €20 per shipment. 

UK – Making Tax digital

The UK tax authorities (HMRC) recently provided an update on the progress made relating to the implementation of Making Tax Digital (MTD), due to begin on 1 April 2019 for VAT only. 

This update stated that they are making good progress with 35 software suppliers having stated that they will have software ready for the first testing phase of the pilot. Which is when the new MTD system will be tested by a small number of businesses and VAT agents. 

As stated in our previous article, MTD will require all VAT registered businesses (whether established or not in the UK) to use special software to provide summary tax data directly to the tax office electronically. This data will then be used to automatically generate tax records, instead of manually calculating and filing a VAT return.

Once fully implemented the new system will also synchronise VAT reporting requirements with income tax and corporation tax obligations for resident UK businesses.

 

The above information was kindly provided by Fiscal Solutions (UK), www.fiscalsolutions.co.uk; contact: contact@fiscalsolutions.co.uk.

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Disclaimer:  The information contained in the present page is general and does not constitute legal advice. Before taking any decision or action on the above information you should take the appropriate professional advice.