The Austrian Federal Tax Court has ruled that a VAT number for performing intra-Community operations cannot be requested by an entity whose transactions fall under the special scheme for small entrepreneurs…
The Austrian Federal Tax Court has ruled that a VAT number for performing intra-Community operations cannot be requested by an entity whose transactions fall under the special scheme for small entrepreneurs.
VAT treatment on movable property
The Austrian Supreme Administrative Court has held that:
(1) Renting movable property fixed into the ground may qualify as immovable property for VAT purposes and that the reduced VAT rate of 10% may apply, if these properties are used for residential purposes.
Grant of easements subject to regular VAT rules
The Federal Tax Court has held that the grant of easements for consideration by farmers and foresters does not fall under the flat rate scheme for farmers.
Regarding the change of the rules on the use and enjoyment for transport services and related services, no penalties will be imposed to entities that failed to pay Belgian VAT during the period between the moment that Royal Decree 57 took effect on 23 November 2017 and the publication of the explaining Circular 2018/C/68 on 31 May 2018, provided that the taxpayer has acted in good faith.
Under the changed rules:
– 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
– the use and enjoyment of these services will be considered to be in Belgium only when they the transport is completely carried out within Belgium.
Extension of the project on cross-border VAT decisions
The project on cross-border VAT decisions will be extended from 30 September 2018 until 30 September 2022. Under this project, taxable persons may obtain private rulings on the VAT treatment of complex cross-border transactions.
The National Revenue Agency has confirmed that an IT Bulgarian service provider, rendering services to both EU and Non- EU customers should be classified as a taxable person and, for that reason, must be VAT registered under article 97a (2) of the VAT Act.
Place of supply of services connected to an immovable property
The National Revenue Agency held that, where installation services are provided to a Bulgarian customer by an EU supplier, and the installation is carried-out by a Bulgarian subcontractor, VAT is due where the supplier is established and, consequently, the subcontract’s invoice must be issued under the reverse charge mechanism.
In Croatia, there is a proposal to amend the law to the effect that local reverse charge should be restricted to supplies performed by taxable persons who are not established or VAT registered in Croatia.
The National Tax Tribunal has held that the VAT paid on advertising, IT and administration services relating to a free online newspaper should be fully deductible, as the online newspaper is commercially operated and the expenses incurred are directly and indirectly connected to the supplies relating to advertising.
Effective from 1 January 2019, entities providing broadcasting, electronic or telecommunications services in Finland will be able to choose to be subject to VAT in their country of establishment, when the value of supplies performed in Finland during the ongoing and the previous year is not higher than EUR 10,000.
In France, the so-called Saisonnier ‘periodic returns relating to seasonal activities – eg touristic activities) returns are being abolished. Saisonnier returns currently allow companies to submit VAT returns only in the reporting periods in which transactions were actually made. As from the end of the third quarter of 2018, all companies must submit regular VAT returns. If a company’s annual VAT due is less than EUR 4,000, quarterly declarations may be submitted. Otherwise, the submission of monthly VAT returns will be required.
The German Federal Cabinet approved the Annual Tax Act 2018, effective from 1 January 2019, which includes:
- The introduction of a VAT liability for operators of online marketplaces and the obligation to keep records regarding certain vendors without a German VAT number;
- Following EU Directive 2017/2455, a simplification will be introduced for intra-EU telecommunication, broadcasting and electronically supplied services, that enables the application of the VAT rules of the seller’s home country, for taxpayers with a turnover not exceeding an annual value of 10,000 EUR (in all 28 Member states) for such services.
Circular No. 1155/2018 has clarified that, where a VAT registration is made retroactively, the taxable person is entitled to deduct the input VAT incurred in past periods, if all corresponding VAT returns have been filed correctly.
Non-resident taxable persons must request from their Greek suppliers a new VAT invoice stating the Greek VAT number of the taxpayer. Furthermore, in the case of a retroactive registration of a PE in Greece, suppliers must issue supplementary invoices so as to include the VAT relating to the supplies made to this PE during the retroactive period.
Effective from 1 January 2019:
- The treatment of vouchers will be brought in line with the EU VAT Voucher Directive (2016/1065), indicating that VAT must be charged on each transfer if, upon the issue, the VAT treatment attributable to the underlying supply of goods or services can be determined with certainty;
- The main rule of the place of supply will be applicable to certain electronic services rendered to a non-taxable person by a provider established in the EU, unless the tax payer opts for the application of the special rule.
The law on the new VAT group regime, effective as of 31 July 2018 has been published. This law identifies the formal and compliance aspects of a VAT group, and defines the obligatory requirements for establishing a VAT group in Luxembourg, notably that all members:
- must be established in Luxembourg or have a fixed establishment therein and
- must have a financial, organizational and economic link.
The Italian government has announced that only companies established in Italy or companies with a permanent establishment will be affected by the electronic invoicing obligation that will come into force on 01.01.2019.
The State Secretary for Finance has published clarifications regarding rental income, indicating that VAT is only due where a tenant, acting as a VAT entrepreneur, rents out (part of) his home to persons staying for a short period, in the context of his hotel, pension, camp or holiday business. In that case, the reduced VAT rate of 6% applies.
The agreement on administrative cooperation, combating fraud and recovery of claims in the field of value added tax between the European Union and Norway, has entered into force on 1 September 2018.
In addition to Italy, Portugal will also introduce real-time reporting. From 01.01.2019, invoices for supplies to the public sector must be issued via the tax authorities’ online portal (Fatura Eletrónica na Administração Pública). The real-time reporting obligation will subsequently be expanded to all B2B transactions. In return, the obligation to submit VAT returns will no longer apply.
From 1 January 2019, the Romanian government have announced that they will cut the VAT rate applicable to hotel accommodation and restaurant services to 5%.
This change mirrors the majority of EU countries who already apply a reduced VAT rate to hotel accommodation.
From January 2019, Slovakia are proposing to amend their VAT legislation. Some of the changes being considered include:
- The adoption of the new EU VAT rules for the treatment of single and multi-purpose vouchers
- Complete withdrawal of the VAT guarantee requirement – This will mean that non-EU businesses registering for VAT will no longer need to pay a VAT guarantee to the tax office to protect against possible VAT underpayments.
- Removal of supplies of agricultural crops and metals products from the local VAT reverse charge procedure, but only if a simplified invoice is issued
Slovenia has extended the obligation to submit Intrastat declarations to distance sellers. According to this, sellers must submit Intrastat declarations if the threshold of EUR 140,000 is exceeded. The obligation to report exists in the absence of any explicit request by the Federal Statistical Office. This means that distance sellers need to monitor their own thresholds and register with the Federal Statistical Office in due time.
The Tax Agency has published a statement regarding the transfer of assets purchased without the right to deduct input VAT, indicating that assets held as inventory should not be excluded from the exemption. Furthermore, certain services (e.g. intangible assets) should equally be included.
In Switzerland, companies must pay broadcasting fees as of 01.01.2019. The amount of the fees will be determined by a company’s global turnover. The Federal Office of Communications (BAKOM) has now announced that companies without a registered office or permanent establishment in Switzerland will not be subject to this tax obligation, as this would not be compatible with international law and Switzerland’s international contractual obligations.
As from 01.01.2019, distance sellers domiciled abroad will become taxable in Switzerland if their annual turnover of distance sales exceeds CHF 100,000. When determining the threshold, the so-called small consignments with a max. tax amount of CHF 5 must also be taken into consideration. The delivery threshold shall be deemed to have been exceeded if the annual turnover in 2018 and the expected annual turnover in 2019 exceed the delivery threshold of CHF 100,000.
In Great Britain, it was announced that a so-called VAT Pilot will be introduced as part of the “Making Tax Digital” initiative. This is a software solution through which VAT returns will have to be submitted via the HMRC API platform. To date, the VAT Pilot has only been made available to software developers and selected taxable persons. In the course of October, all taxpayers will be able to obtain a test version. As of 01.04.2019 it will only be possible to submit VAT returns using the Tax Pilot via the HMRC API platform.
The above information was kindly provided by:
- Fiscal Solutions (UK), fiscalsolutions.co.uk; contact: [email protected]
- Küffner Maunz Langer Zugmaier (Germany), contact: [email protected]
- VAT Systems (France), vatsystems.eu; contact: [email protected]