The UK government has updated its plans to prevent VAT evasion committed by non-compliant, non-EU businesses that sell goods online in the UK and will now include the “Fulfilment House Due Diligence Scheme” (FHDDS), which will target fulfilment houses in an effort to get them to monitor their customers VAT compliance, in its early-autumn Finance Bill.
UK
The UK government has updated its plans to prevent VAT evasion committed by non-compliant, non-EU businesses that sell goods online in the UK and will now include the “Fulfilment House Due Diligence Scheme” (FHDDS), which will target fulfilment houses in an effort to get them to monitor their customers VAT compliance, in its early-autumn Finance Bill.
Part of this FHDDS scheme will involve the introduction of an approved fulfilment house register from April 2018. This register will require all qualifying fulfilment houses to perform certain checks on their customers in an attempt to detect and report sales without VAT and/or under declared customs values on imported goods.
The FHDDS follows on from the range of measures that the UK introduced in 2016 to try to deal with the problem of non-EU sellers failing to VAT register and charge UK VAT.
The above information was kindly provided by:
- Fiscal Solutions (UK), fiscalsolutions.co.uk; contact: [email protected]
- VAT Systems (France), vatsystems.eu; contact: [email protected]
Switzerland
The Swiss tax authorities have confirmed that they are amending their VAT Act from 1 January 2019 to state that non-resident mail order companies, which generate a turnover of more than CHF 100,000 of low value consignment sales in Switzerland, will have to VAT register and charge VAT on their sales in the country.
Currently in Switzerland, the Federal Customs Administration waives import VAT on low value consignments that have a VAT amount of CHF 5 or less. This allows non-resident mail order companies to avoid registering and charging VAT to their customers, even if their total sales go above the country’s CHF 100,000 registration threshold.
In an effort to remove the disadvantage that this gives resident companies who sell the same products and have to charge VAT, the Swiss tax authorities have stated that from 1 January 2019 non-resident providers will have to register if their sales in the country exceed the CHF 100,000 limit.
Latvia
From 1 January 2018, the Latvian annual VAT registration threshold for resident businesses will reduce from €50,000 to €40,000 per annum.
This will not affect non-resident businesses who have a nil threshold and have to register from the first sale that they make in the country.
Greece
In an effort to prevent VAT fraud, the Greek government has implemented a domestic reverse charge mechanism on supplies of mobile phones, games consoles, tablet PCs and laptops.
This new mechanism, introduced on 1 August 2017, will mean that businesses providing these types of electronic devices will no longer have to charge VAT on their supplies to other business customers. Instead, it will be the customers’ responsibility to account for the VAT in their own returns.
Belgium
The Belgian VAT Authorities have recently published a circular clarifying the rules for input VAT recovery and VAT adjustments connected with the free distribution of samples, commercial gifts of low value, promotional items, gifts to staff or their children, donations of goods in stock to victims of disaster and food donations.
