European VAT News - February 2019

Austria

In order to avoid tax losses, Austria plans to make electronic marketplaces more responsible for the collection of VAT. Operators of electronic marketplaces should record detailed information about the individual traders using their site and forward the information to the Austrian tax office. The information shall include, for example, annual turnover, customer names and records concerning stocks. The new regulations should enter into force on 01.01.2020, at the earliest.

Bulgaria 

From 1 July 2019, Bulgaria will introduce a deferred import VAT scheme for all businesses registered for VAT in the country.

Any business wishing to use the scheme will need to apply to the Bulgarian tax authorities for authorisation and once accepted, it will remove the requirement to pay import VAT when goods are cleared into the country.  Instead the VAT will be deferred to the businesses’ VAT return.

This should result in savings on shipping costs and bank charges for the companies who import goods on a regular basis, as well as improve their cash flow as they will no longer have to wait for import VAT to be refunded by the Bulgarian tax authorities.

Croatia

As from 01.01.2019, the reverse charge mechanism for local supplies is no longer applicable in Croatia if the supplying taxable person is registered for VAT purposes. Thus, the obligation to submit INO PPO declarations has ceased to exist. Previously, all transactions falling within the scope of the national reverse charge mechanism had to be declared separately. However, with the abolition of the INO PPO declaration, companies are now obliged to electronically submit a complete list of the received incoming invoices together with their VAT returns.

Czech Republic

The Czech Republic is the first EU Member State planning to extend the reverse charge mechanism to all local supplies. The general reverse charge mechanism should to be introduced on 01.07.2020.

France

From 1 January 2019, France extended the obligation to submit electronic VAT invoices for sales made to the government, to include small and mid-sized businesses.

Small and mid-sized businesses are considered to be vendors with between 10 to 250 employees and this new requirement will mean that they must use authorised software to raise and send invoices via a digital connection (such as an EDI or API) to their public service customers.

Larger sized companies with more than 250 employees are already obliged to provide e-invoices on these types of transactions since 1 January 2018.

France advises companies to make EU Refund Directive claims by 28 February 2019

The French tax authorities have recommended that French and UK businesses, who use the EU Refund Directive mechanism to claim back VAT incurred in the UK and France during 2018, should complete their applications by 28 February 2019.

Normally these types of claims would have a submission deadline of 30 September in both countries.  However, due to the uncertainty of a no-deal Brexit the French tax authorities are advising to file these claims by the end of this month.

Furthermore, the French tax authorities have stated that in the event of a no deal Brexit, UK companies will have to submit these types of VAT reclaims as if they are a non-EU business (using the 13th Directive Refund claim mechanism) after 29 March 2019.

The EU and 13th VAT Refund Directive are mechanisms in which companies can claim VAT incurred in EU countries outside of a VAT registration. https://www.impots.gouv.fr/portail/brexit-liste-de-questions-reponses)

Ireland 

From 1 March 2019, Ireland will raise the VAT rate applied to food supplements (including vitamins, minerals fish oils etc.) to 23%.

This is due to the Irish Revenue recently confirming that they no longer consider these types of supplies as foodstuffs and therefore they will be reclassified from the zero to the standard VAT rate in the country.

Poland

As from 01.01.2019, the deadline for reducing the tax base due to bad debts was reduced. Previously, receivables were considered uncollectible if they were not settled within 150 days of their due date. Since 01.01.2019, receivables are now considered uncollectible 90 days after their due date.


Portugal

Portugal has expanded the application of the reduced VAT rate of 6% to cover e-books, as well as entries to cultural events.

UK

The UK is continuing to push its Making Tax Digital initiative (see KMLZ Newsletter 53/2018). From 01.04.2019, companies domiciled in the UK or having a fixed UK establishment must generate their VAT returns directly from the accounting system. For companies that are only registered in the UK, this obligation only applies from 01.10.2019. All companies having a turnover in excess of GBP 85,000 p.a. will be affected by these regulations.

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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.