From 1 November 2018, the Austrian government will amend its VAT law to reduce the VAT rate applied on hotel accommodation to 10%…
From 1 November 2018, the Austrian government will amend its VAT law to reduce the VAT rate applied on hotel accommodation to 10%.
This new rate brings Austria in line with most other European Union countries who already impose a reduced VAT rate on this type of service.
From 1 January 2019, the Croatian tax authorities are proposing to reduce their standard VAT rate from 25% to 24%.
There is no plan to lower their reduced VAT rates, which will remain at 13% and 5%.
The German tax authority has recently amended the VAT treatment of reverse charge supplies. In the case of payment by instalments, where at the time of payment of these instalments the requirements for the reverse charge mechanism are not met, but only at the moment the supply is finished, the supplier remains liable for the VAT due on collected instalments. This new provision is applicable to all pending cases, but the previous treatment may also be applied to instalments collected upto 31 December 2018.
Tax notifications validity
The Tax Court of Cologne has held that VAT refund notifications validly disclosed by the German tax administration and as such triggering the applicable deadline:
- Do not require electronic signature and
- Do not need to be encrypted.
With effect from 01.01.2019, invoice details shall be required to be electronically submitted to the fiscal authorities in real time. Initially, only limited liability companies and public law entities shall be affected. However, as from 01.01.2020, every taxable person shall be obliged to submit real-time reports. As a consequence, the invoice data must be electronically and simultaneously transmitted to both the recipient and the fiscal authorities. Paper invoices would then be abolished.
Since 01.07.2018, invoice data must be submitted to the fiscal authorities within 24 hours of invoicing. The Hungarian Finance Minister, however, has encouraged the tax offices not to impose penalties for late reports, in instances where the company is already registered in the reporting system and the invoice data is submitted by 31.07.2018.
The Luxembourg tax authorities have issued clarifications regarding the VAT treatment applied to digital coins, namely confirming that bitcoins are considered as currency and thus the VAT exemption for currency transactions under article 135(1) (e) of the EU VAT Directive applies.
VAT deduction on mixed usage
The tax administration has released Circular no. 265-1, clarifying that VAT deduction on goods and services, when used for both economic and non-economic purposes, are only partially deductible. This rule also applies to entities that are partially subject to VAT, regarding supplies that are used for non-economic activities.
From 1 January 2019, the Dutch tax authorities will increase the reduced VAT rate from 6% to 9%.
This reduced VAT rate applies to a number of different goods and services including accommodation, foodstuffs, pharmaceutical products, domestic passenger transport and books (excluding e-books).
From 1 January 2019, the Polish tax authorities will introduce a draft amendment to the VAT Act to reduce the standard VAT rate in the country from 23% to 22%.
If accepted the reduced VAT rate will also decrease from 8% to 7% at the same time. The super reduced VAT rate will remain unchanged at 5%.
The Portuguese tax administration has released a binding information which confirms that costs related to hybrid vehicles for tourism purposes are only VAT deductible if these are electric or plug-in hybrid vehicles.
Amendments introduced to Portuguese VAT returns
As from 9 June 2018, the new rules for periodic VAT returns are effective. These rules include new periodic VAT returns as well as instructions for completion.
Effective as of 1 July 2018, sub-contractors will also be required to issue e-invoices through the ‘FACeB2G’ system (1) when they are involved in public contracts/tenders and (2) if invoicing amount is higher than 5 000 EUR.
As from 01.01.2019, every company registered in the Swiss VAT Register will be obliged to pay an annual broadcasting fee. The broadcasting fee will be based on the company’s worldwide turnover and can amount to a maximum of CHF 35,590. Question? Is this for all Companies on the Swiss VAT register, or just broadcasting companies registered on the Swiss VAT register?
As from 01.01.2019, companies which are registered for VAT purposes in the Canary Islands will be obliged to submit real time reports (SII reports). The invoice information will be required to be submitted within 4 working days after receipt of the purchase invoice or after the sales invoice is issued.
Guidance on VAT deduction of false invoices
The Swedish tax authority has updated its guidance on the deductibility of input VAT connected to false invoices, particularly stating that:
- A taxpayer may be denied the right to deduct the input VAT linked to a fraudulent transaction if the buyer knew or should have known that he was participating in a fraudulent transaction;
- The tax administration has to prove that the buyer was acting in bad faith;
- The obligation of the buyer to investigate its supplier may not be disproportionate.
VAT on services provided by a foreign VAT group
The Swedish Supreme Administrative Court has held that services provided by a Danish fixed establishment (FE) to its Swedish parent company are taxable in Sweden (the Member State of the customer).
This decision is based on the following grounds:
- The activities carried out by the Danish FE should be regarded as part of the Danish VAT Group, of which the FE forms part;
- The Swedish Company is viewed as an independent taxable person in relation to the Danish VAT group.
Due to Brexit, the importation of EU goods shall be simplified. As Great Britain is leaving the EU VAT System, importation of EU goods will be subject to 20 % import VAT. Although import VAT is deductible in the VAT returns, it would, nevertheless, result in liquidity costs. In order to prevent such disadvantages, import VAT incurred during a certain reporting period shall not be due before the following VAT return is due.
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