European VAT News - January 2019

Belgium

From 1st January 2019, tax payers may opt to apply for VAT on professional rent, only when the construction of the respective building started as from 1st October 2018.

Next to this, there is now a definition of the provision of storage space in the Belgian VAT law.  It is the provision of spaces that are used for more than 50% for the storage of goods, provided that these spaces are not used for more than 10% as a sales space.

All short term rent of buildings (maximum six months) will be subject to VAT.  However, different exceptions are foreseen.  

Croatia

Taking effect from 1 January 2019, this is a summary of the important changes regarding VAT in Croatia: 

-  The right to deduct the value added tax (VAT) on expenditure related to passenger cars not wholly used for business purposes will be limited to 50%.

-  The use for non-business purposes of a passenger car included in the assets of a taxable person’s business, for which the deduction of the input VAT has been performed, will not be treated as supplies of services for consideration.

-  The extended reverse charge for foreign taxable persons registered for VAT purposes in Croatia will not be possible anymore.

-  A 13% VAT rate will be applicable to supplies of fresh meat, fish, fruits, eggs and vegetables;

-  The reverse charge reserved for construction works will also be applicable to supplies of concreted steel and iron, as well as the products made from such materials.

Moreover, from 1 January 2020, the general VAT rate will be reduced to 24%.

Finland

From 1 July 2019, Finland is set to cut the VAT rate applicable on e-books to 5% from 21%.

This follows the EU Councils proposal to allow EU member states to cut rates on electronic publications to match their printed equivalents.

Germany

As from 1 January 2019 goods transported from another Member State to Germany for future “call off stock” by a German customer will, under certain conditions, be treated as exempt intra-community supplies followed by an acquisition by the customer.

Italy

Effective as from 1 January 2019, the amount of excise duty applied on beer will change from

3, 02 EUR to 3, 00 EUR, per hectoliter.

Latvia

The Council Implementing Decision (EU) 2018/1921 of 4 December 2018 authorized Latvia to extend the restriction of 50% deduction of the VAT incurred in the purchase, leasing, intra-community acquisition and importation of passenger cars with a weight inferior to 3500 kilograms and having less than eight seats in addition to the driver’s seat, as well as expenditure related to maintenance, repair, and fuel of such passenger cars, until 31 December 2021.

Lithuania 

From 1 January 2019, Lithuania cut the VAT rate applicable on e-books to 5% from 21%.

From 1 January 2019, the VAT rate on newspapers, magazines, and other periodicals was reduced from 9% to 5%. Books and other printed materials will remain subject to 9% VAT.

This follows the EU Councils proposal to allow EU member states to cut rates on electronic publications to match their printed equivalents.

Malta 

From 1 January 2019 a 5% VAT rate will be applicable to the supplies of digital books and online journals.

Netherlands

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

The 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).

Norway

From 1 January 2020, the Norwegian government has voted to remove the low-value import VAT exemption threshold on goods imported into the country.

Currently, this threshold allows companies to import goods into Norway at a value of less than NOK 350 (approx. €35), VAT free.

However, in an effort to remove the unfair advantage that this gives non-resident providers over resident providers of the same goods, the Norwegian government will remove the low-value threshold. This will mean that non-resident providers will have an obligation to register and account for VAT on the sale of the low-value goods when their annual sales exceed the NOK 100,000 (approx. £13,500) VAT registration threshold in the country.

Poland 

The Council Implementing Decision (EU) 2018/1919 of 4 December 2018 authorized Poland to exempt from VAT those taxable persons whose annual turnover not exceed EUR 40 000, until 31 December 2021.

Switzerland 

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

Previously, the threshold for the exemption was set at CHF 62.50 (approx. £50) for most goods and allowed importers to purchase goods VAT free from non-resident companies below this amount.

However, in an effort to remove the unfair advantage that gave non-resident providers over resident providers of the same goods, the Swiss government removed the low-value threshold from 1 January 2019. This now means that non-resident providers will have an obligation to register and account for VAT on the sale of the low-value goods when their annual sales exceed the CHF 100,000 (approx. £80,000) VAT registration threshold in the country.

The European Union is also planning the removal of its low-value consignment stock relief threshold in 2021.

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News from the Board

IVA Meeting with the Portuguese Tax Authorities

The International VAT Association (IVA), represented by its President, Stephen Dale, and Board Member, Fátima Gouveia, met with the representatives of the Portuguese Secretary of State for Tax Affairs and of the Portuguese VAT Authority on the 9th of July 2019, in Lisbon. The IVA thanked the authorities for meeting with us at short notice.

Download the full Communique soon available.

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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.