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European VAT News

European VAT News January 2018

By January 22, 2018July 10th, 2021No Comments


On 12th October 2017, a Circular confirming the right to deduct input VAT on non-compliant invoices has been released. Taxpayers will now be allowed to provide corrective invoices and circumstantial evidence (e.g. contracts).


On 12th October 2017, a Circular confirming the right to deduct input VAT on non-compliant invoices has been released. Taxpayers will now be allowed to provide corrective invoices and circumstantial evidence (e.g. contracts).

A new Royal Decree No 57 has been published, introducing, as of 23 November 2017, the following changes on the use and enjoyment rules for goods transport in Belgium:

  1. the transportation service of goods and the respective auxiliary services are deemed to be outside the European Union if the effective use and enjoyment is outside the European Union, i.e. the entire route of the transport service is outside the European Union; and
  2. the use and enjoyment of these services will be effectively considered in Belgium only when the transport is completely carried out within Belgium.


According to the Bulgarian tax authorities’ recent statement, during the period between a non-voluntary VAT deregistration and a second voluntary VAT registration, companies will be considered VAT deregistered and therefore not ordinarily allowed to deduct input VAT.

2018 Intrastat thresholds 

Effective as of 2018, Intrastat thresholds will be updated, notably:

  • 2018 exemption thresholds:
  • Dispatches: 260 000 BGN; and
  • Arrivals: 430 000 BGN.
  • 2018 statistical value thresholds:
    • Dispatches: 12 800 000 BGN; and
    • Arrivals: 6 300 000 BGN.

 Input VAT deduction on goods and services

The Bulgarian Supreme Administrative Court held that:

  1. deduction of input VAT cannot be refused on the grounds that invoices fail to describe in detail the nature of the goods, when there is other supporting proof that allows the identification of the goods; and
  2. the fact that a lessor is not the owner of the goods is not a relevant condition to ascertain whether the VAT deduction should be granted to the lessee.


In Croatia, companies are obliged to report possible corrections, concerning the past year, in the VAT return for the last period. This applies to corrections as regards input VAT deduction, deductible input VAT amounts and output supplies which have not yet been reported, as well as adjustments of the VAT rate. As from 01.01.2018, import VAT will no longer have to be paid on selected objects, the value of which exceeds HRK 1 million. The amount of import VAT which becomes due will then merely have to be reported in the respective VAT return but it need not be paid. This special clearance procedure requires the prior approval of the customs authorities.


Amendments to Cyprus VAT legislation have been recently introduced, notably:

  • The application of the reverse charge mechanism in loan restructuring processes, when related to immovable property transfers;
  • Taxation of 19% VAT rate on building land sales; and

Taxation of leasing contracts when concerning new commercial immovable properties.


From 1 January 2018, Finland will change the rules on accounting for VAT when importing goods into the country by allowing VAT registered businesses to defer the import VAT to their VAT reporting.

This will in effect remove the requirement to pay import VAT on goods at the time they are imported, which could result in savings on shipping costs and bank charges. It should also improve cash flow for businesses importing into the country, as they will no longer need to wait for the VAT to be refunded from the Finnish tax authorities.


On 04.12.2017, the Supreme Administrative Court decided that a VAT refund application (cross-border within the EU) for the year 2011, which was filed on 01.10.2012, cannot be rejected due to late filing. The court is of the opinion that France failed to provide for a preclusive period in accordance with article 15 Directive 2008/9/EC pursuant to which, since 2010, VAT refunds have to be claimed by 30.09. of the year following the year in which the right to deduct arose via the portal of its state of residence. This means, that it might be possible to file VAT refund applications for the past with respect to which the deadline has already expired.

Further, France has expanded the obligation of electronic invoicing. Companies invoicing supplies to a public body, eg government or local authority in France must issue their invoices by means of the portal “Chorus Pro”, which is made available by the French Government.

As from 01.01.2018, this applies, for the first time, to medium-sized companies, with less than 5,000 employees and whose revenue does not exceed EUR 150 million or whose balance sheet is below EUR 200 million.

As from 01.01.2019 this obligation will be expanded to small companies with less than 250 employees and whose revenue does not exceed EUR 50 million or whose balance sheet is below EUR 43 million.

The interest rate on underpaid or overpaid VAT has been reduced from 4,8% to 2,4% with effect from 1 January 2018.


The VAT Application Guidelines have been amended as to incorporate the call-off stock simplification. These amendments follow recent rulings in the sense that direct supplies from other Member States to call-off stocks in Germany may be treated as single supply of goods, instead of an intra-community deemed supply for the transfer of own goods followed by a local supply of those goods.


As from 01.07.2018, the obligation to electronically transmit invoice details will enter into force in Hungary. Further details have now been published in this regard. Taxable persons will be required to electronically transmit invoice details to the fiscal authority within 24 hours. This applies to invoices for supplies taxable in Hungary, where the VAT amount shown in the invoice exceeds HUF 100,000. This means that tax exempt supplies or supplies to which the reverse charge mechanism applies are outside the scope of this regulation. Further, invoices for supplies to private individuals (B2C) are excluded from this regulation.

The implementation of the electronic reporting system concerns all companies, which are registered in Hungary. The implementation on 01.07.2018 is preceded by a test period, which will commence on 01.01.2018. Companies, which are registered in Hungary, can participate on a voluntary basis.


Companies should bear in mind that any input VAT which was incurred in 2017 must be reported in the annual VAT return which is to be filed by 30.04.2018, at the latest. The right to deduct input VAT is basically incurred at the point in time the VAT for the rendered supply arises.


Effective as from 1 January 2018, a reduced VAT rate of 5% will be applied to certain supplies of fruits, vegetables and berries.


The Lithuanian tax administrations recently released a guidance regarding VAT, namely addressing that requests for periodicity changes can only be submitted electronically and with instructions about the registration of invoices in the registers.


A guidance on VAT online services outside the e-ID system has been recently released.


As from 01.01.2018, Norway will increase the reduced VAT rate from 10 % to 12 %.


To date, Poland has not reached an agreement concerning the concrete implementation of the Split-Payment-System. Its implementation, which was scheduled for 01.01.2018 was, as a result, postponed to 01.07.2018. Application of the Split-Payment-System in Poland remains voluntary. It is for the recipient to decide whether or not the invoice amount is transferred to a separate tax account of the supplier.


Effective as of 1st January 2018, foreign companies acquiring intra-community goods for subsequent intra-community supplies, exports or EU distance sales with shipment to another Member State, will have the option to appoint a tax representative in order to avoid the need of a VAT registration in Slovakia.

This simplification is exclusively available for goods supplied via an electronic communication interface.


The Swedish tax authority has released further clarifications on the VAT treatment for charges related with card systems, notably:

  1. Fees paid between financial institutions are out of scope of VAT; and
  2. Payment for card transactions, such as annual fees, are exempt from VAT.


HMRC announced the increase of the late payment interest rate following the increase from 0,25% to 0,5% in the Bank of England base rate, specifically:

  • As of 13th November 2017 for quarterly instalment payments; and
  • As of 21st November 2017 for non-quarterly instalment payments. 

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