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European VAT News

European VAT News March 2018

By March 15, 2018July 10th, 2021No Comments

The Bulgarian Supreme Administrative Court recently ruled in two cases of supplies of goods from Bulgaria to other EU Member States that the requirements to apply the 0% VAT rate concerning intra-community supplies were not fulfilled, despite the CMRs provided in the respective tax audits.

Bulgaria

The Bulgarian Supreme Administrative Court recently ruled in two cases of supplies of goods from Bulgaria to other EU Member States that the requirements to apply the 0% VAT rate concerning intra-community supplies were not fulfilled, despite the CMRs provided in the respective tax audits.
The Court based the decisions on several inconsistencies identified in the documentation provided in the specific cases, such as:

  • lack of contractual relationship between the company indicated in the CMR and the recipient, which was responsible for transport;
  • vehicles indicated in the CMRs were not owned by the transportation company or different copies of the document mentioned different vehicle numbers;
  • CMR was signed by the recipient in the date of loading of the goods in Bulgaria.
    Mandatory electronic submission of VAT returns
    Effective as of 1st January 2018, monthly VAT returns, purchases and sales ledgers and VIES returns must be submitted electronically.

Rejection of VAT deduction

The Bulgarian Supreme Administrative Court held that entities VAT registered under the special regime for intra-Community acquisitions may not deduct the input VAT of such operations.

Croatia

Minister for Finance has announced the increase in the VAT registration threshold from EUR 230.000 to EUR 300.000, effective as of 1 January 2018.

Czech Republic

The Czech General Tax Directorate has recently published their understanding, with effect from 1 March 2018, regarding the application of VAT exemption to supplies of services linked to export/import operations. Notably, the supply of services can be VAT exempt when:

  • The services effectively contribute to carrying out the import or export of goods; and
  • The services are supplied directly to the importer, the exporter, or the consignee of the transported goods.

According to this information, it seems that services related to the import of goods may still benefit from the VAT exemption in cases where there is no contractual relationship between the provider of the services and the importer or recipient of the goods.

Proof of economic activity may speed up VAT registration

The General Tax Directorate has stated that submitting the VAT registration application together with proof of the performance of a real economic activity (i.e. existence of bank account, seat, etc.) may speed up the process.

Italy

Split payment system

The Italian tax authority has recently provided clarifications on the split payment system, namely regarding the entities to which the system applies and to the VAT advance payment computation method in cases where the split payment system is applied.

VAT refunds
The Italian tax authorities have announced that, effective as of January, 1st 2018, VAT amounts to be refunded will be communicated directly to the local agents for tax collection, optimizing the VAT refund process.

Circular letter with clarifications concerning VAT deductions

A recently published Circular letter clarified the application of the new deadlines for VAT deduction and registration of invoices, notably that the deadline for VAT deduction only starts when, cumulatively, the tax point occurred and the taxpayer received a valid invoice. Therefore, the right to deduct VAT must be exercised no later than in the annual VAT return of the year in which both conditions were fulfilled.

Split payment system – possibility to check counterpart status

The status of clients may be checked by suppliers on the lists available in the websites:

  • Index of Public Administrations for public bodies and administrations; and
  • Ministry of Economy and Finance for other companies.

Postponed deadlines

The filing deadline for the communication of invoice data for companies reporting invoices related to the 2nd Quarter of 2018 or to the 1st Semester of 2018 (if opted for semester basis) was postponed to 30/09/2018. Moreover, the obligation is abolished from 1 January 2019.
In addition, the deadline for the report of the VAT calculation related to the 2nd Quarter of 2018 was also postponed to 30 September 2018.

Luxembourg

In an answer to a parliamentary question, the Ministry of Finance announced a couple of days ago that Luxembourg will implement VAT group. The draft law will be submitted in the coming weeks to Parliament and the EU consultation process will be run in parallel. Date of entry into force must still be confirmed, and depends on the speed and outcome of legislative process. But this may already be before year-end, even Q3. This is a quick reaction to the recent EU cases on cost- sharing vehicles (IGPs).

Norway

The mandatory Standard Audit File for Tax reporting has been postponed until 1st January 2020.

Romania

Romania is proposing to reduce its VAT rate from 19% to 18% from 1 January 2019.
This decrease is part of a package of tax simplification proposals, which could also see the application of 5% reduced VAT rate being extended to apply to a number of property and agricultural supplies.

Slovakia

The National Council has approved an amendment to the VAT Act which involves the removal of the minimum VAT base of EUR 5,000 for the reverse charge to take place when it comes to supplies of agricultural crops and metals and semi-finished metal products. Consequently, any supply of the aforementioned goods will be subject to a local reverse charge.

The above information was kindly provided by:

  • Fiscal Solutions (UK), www.fiscalsolutions.co.uk; contact: contact@fiscalsolutions.co.uk
  • VAT Systems (France), www.vatsystems.eu; contact: news@vatsystems.eu