European VAT News - March 2019

Belgium 

Extension of VAT exemption for small business

Council Implementing Decision (EU) 2018/2077 of 20 December 2018 has granted Belgium an authorization to continue to exempt from VAT those taxable persons whose annual turnover is no higher than EUR 25 000. The authorization is granted until 31 December 2021. 

VAT deductible on rental of immovable property

According to the notice published on 10 January 2019 input VAT incurred before 2019 on the rental of immovable property, can be deducted as from 1 January 2019, if it could not be deducted before this date.

 

Czech Republic

Delay in the implementation of EU VAT Directives

Due to delays in the legislative process, the bill integrating the VAT Directive on VAT obligations for supplies of services and distance sales of goods (Directive 2017/2455) and the VAT Directive on the treatment of vouchers (Directive 2016/1065) will only enter into force later in 2019. Nonetheless, the General Tax Directorate confirmed that these Directives will have direct effect in the Czech Republic.

Request for the application of Generalised Reverse Charge mechanism

Czech Republic has formalised a request on 16 January 2019 to apply the generalised reverse charge mechanism (GRCM) under Council Directive (EU) 2018/2057.

Date of taxable supply in respect of continuous supplies

A taxable supply with the place of supply in the Czech Republic, which has been provided for more than 12 months is deemed to have been made no later than on the last day of the calendar year following the calendar year in which the taxable supply began.

The amendment became effective on 1 January 2019 and does not apply to services provided based on the law or based on the decision of a public authority to a third party, where the provision of that service is paid by the state.

 

Germany

Input VAT incurred in the purchase of business goods used for non-business purposes

Council Implementing Decision (EU) 2018/2060 of 20 December 2018 has granted Germany an authorization to continue applying the derogation in articles 168 and 168a of the EU VAT Directive, allowing for this reason Germany to exclude the right to deduct input VAT incurred on the purchase of business goods and services which are more than 90% used for non-business purposes. The extension of the derogation is granted until 31 December 2021.

 

Greece

Extension of application of reduced VAT rate in Greek islands

The application of the reduced VAT regime to the islands of Lesbos, Chios, Samos, Kos and Leros has been extended until 30 June 2019.

Clarifications on invoices issued in other currencies than euros

The Public Revenue Authority provided clarifications on the recording and issuance of invoices in other currencies than euros, stating that although companies’ accounts will be kept in euros, the amounts stated in the invoices can be in any official currency, provided that the VAT is expressed in euros.

New application form for VAT refund to taxable persons not established in EU

Circular 1230 introduces a new application form for VAT refunds for taxable persons established outside of the EU. This document also introduces an explanatory memorandum with guidance about how to fill the form.

Sales lists changed to yearly periodicity

Circular 1217 changed the periodicity of filing of sales list to a yearly basis and the respective deadline will be March of the next year the sales list refers to. This means that the sales lists related to 2018 are to be filed by the end of March 2019. 

Clarifications on super-reduced VAT rate of 6%

The Public Revenue Authority published E.2002 clarifying that, effective from 1 January 2019 the super-reduced VAT rate of 6% applies to tickets of theatrical performances, as well as to concert tickets. Furthermore, the super-reduced rate applies only to tickets of concerts where no other service is provided.

New wording for procedural violation on issuance of invoices

Any invoice issued from a non-approved and undeclared electronic mechanism will be covered by the new wording of the procedural violation and the fine for the violation amounts to EUR 500. The previous wording of the provision referred only to "an electronic mechanism".

Clarifications on the new VAT provisions concerning the special scheme for small businesses

Circular E.2012, published on 17 January 2019, provided clarifications on the new VAT provisions concerning the special scheme for small companies. In this context, the 10 000,00 EUR threshold remains but it does not include disposals of capital assets nor exempt supplies with no deduction right. Moreover, as soon as the threshold is exceeded, the company must apply the regular VAT regime irrespective of when the notification to the Greek tax authorities is filed. In addition, any newly established business may apply to the regime and it is no longer mandatory to retain it for 2 years.

 

Ireland

EU Directive on VAT treatment of vouchers implemented

The Council Directive 2016/1065/EU, on the treatment of vouchers has been implemented and entered into force on 1 January 2019.

EU Directive on the VAT rules on E-Commerce implemented

The Council Directive 2017/2455, on the VAT rules of E-Commerce was implemented via the amendment of the Value-Added Tax Consolidation Act 2010.

Food supplements liable to 23% VAT   

Entering into force on 1 March 2019, all vitamins, and minerals fish oils, etc. are liable to the 23% standard VAT rate. Previously, a zero VAT rate applied to such products.

 

Netherlands

Reduced VAT rate and exclusion of Input VAT Deduction 1968

In the sequence of the increase in the reduced VAT rate from 6% to 9%, that took effect on 1 January 2019, the Ministry of Finance announced on 28 January 2019 an amendment to the decree on the Exclusion of Input VAT Deduction 1968, in order to update the reduced VAT rate there mentioned.

Under this decree, a taxable person can deduct input VAT incurred on the purchase of food and drinks that are provided to its employees, provided that the difference between what the employee would normally have to pay for such food and drink and what the employee pays is not higher than 227,00 EUR per employee per year.

 

Poland

2019 thresholds for small taxpayers

Effective from 1 January 2019, the threshold to qualify as a small taxpayer is 5 135 000 PLN (1 200 000 EUR) of annual turnover, including VAT. However, for agents and commissionaires, this threshold is 193 000 PLN (45 000 EUR).

 

Portugal

Application of the VAT treatment of vouchers

The Law no. 71/2018, applicable on 1 January 2019, transposed into Portuguese legislation Council Directive 2016/1065 regarding the VAT Treatment of vouchers. The subsequently issued Ruling no. 30208 provides guidance on the meaning of the new concepts and the applicable provisions concerning the taxable event and taxable amount.

 

Spain

Interpretation of VAT Directive regarding vouchers

The Spanish Directorate General for Taxation issued a ruling providing interpretation to Directive 2016/1065/EC on the VAT treatment of vouchers, in the absence of a regulatory development.

Transitional threshold for the VAT special regime and special simplified regime

The transitional threshold of 250 000,00 EUR for the special VAT Regime and the special simplified VAT Regimes was extended for 2019, according to Royal Decree-Law 27/2018 of 28 December 2018.

 

UK

Vacation Rentals (UK) v HMRC [2018] UKUT 383 (TCC) – “legitimate expectation”

The Upper Tribunal reviewed the case of VAT exempt payment charges for card handling services carried out by an intermediary. The Upper Tribunal explained that the Business Brief, issued by the HMRC, was clear and unambiguous and gave rise to a legitimate expectation of VAT exemption of those charges and for this reason it would be an abuse of power for HMRC to assess VAT on the relevant supplies.

 

The above information was kindly provided by Ryan VATSystems (France), www.vatsystems.eu;contact: news@vatsystems.eu.

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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.