The Czech Republic will delay the introduction of the generalised reverse charge mechanism (GRCM) on domestic supplies undertaken in the country until at least January 2021…
The Czech Republic will delay the introduction of the generalised reverse charge mechanism (GRCM) on domestic supplies undertaken in the country until at least January 2021.
The GRCM was allowed by the European Union in an effort to combat VAT fraud and allows EU member states most severely affected by fraud to apply a GRCM to transactions above a value of €17,500.
The Italian government recently announced that if certain budgetary targets are not met within 2020, they will implement a number of potential VAT rate increases. These increases include:
- The reduced 10% VAT rate being increased by two percent (from 10% to 12%) from 1 January 2021; and
- The standard VAT rate being increased from 22% to 25% from 1 January 2021, rising to 26.5% from 1 January 2022.
The requirement for non-EU companies to either establish their own Dutch company or appoint an EU established indirect customs representative to export goods from the Netherlands has been postponed until 1 April 2020.
This requirement follows recent clarification released by the EU Commission, stating that only EU businesses can export from the EU or the non-EU business must appoint an EU established indirect customs representative.
Similar export requirements have been confirmed in several EU member states, including Belgium, Italy, Czech Republic, Hungary, Lithuania, Latvia, and most recently Germany.
Poland has missed the 1 January 2020 implementation deadline for the four EU VAT ‘Quick Fixes’.
The ‘Quick Fixes’ were implemented across the EU at the beginning of the year and aim to clarify the VAT treatment of certain business to business (B2B) cross-border transactions between EU member states.
Poland has confirmed that from 1 January 2020 until it has implemented the new legislation, VAT registered businesses in the country will be permitted to either follow the revised EU VAT directive on quick fixes, or stick with the old Polish VAT rules, which may have different VAT treatments.
After several delays from the initial plan, Romania finally cancelled the proposed VAT split payment mechanism plans. Initially, Romania announced a voluntary VAT split payment scheme allowing businesses to adhere voluntarily to this regime during 2017. As from 2018, the new scheme would become mandatory.
Following the request for a derogation sent to the European Commission, the EU challenged the system proposed on the grounds of it representing a non-proportional administrative burden. In particular, the EU considered this initiative to be non-compatible with the EU VAT Directive and the freedom to provide services. This challenge ultimately lead to the Romanian government cancelling all plans and current optional regime on the VAT split payment mechanism.
The split payment scheme is already applicable in Poland and Italy . The scheme consists in splitting the payment of each invoice into two separate payments: a payment of the net amount to the supplier and a payment of the VAT amount to a control VAT bank account of each taxpayer.
Although Romania has cancelled plans on the split payment mechanism, the country is moving forward with its plans on a new SAF-T file to be submitted by all taxpayers periodically. Further details about this requirement will soon be published in our website.
Switzerland – referring to our January Newsletter
Please disregard the news in our January Newsletter for the change re the interest rate. The interest rate will stay at 4%.
The above information was kindly provided by:
- Fiscal Solutions (UK), www.fiscalsolutions.co.uk; contact: [email protected]
- EY Switzerland, contact: [email protected]
- Marosa (Spain), https://marosavat.com; contact: [email protected]