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European VAT News

European VAT News – March 2021

By March 27, 2021December 22nd, 2021No Comments

Bulgaria has recently introduced amendments to the VAT reporting obligations, concerning transactions with…

Bulgaria 

Bulgaria has recently introduced amendments to the VAT reporting obligations, concerning transactions with Northern Ireland. In this context, among other changes it is foreseen that Bulgarian suppliers will have the obligation to report in their monthly EC Sales Lists the prefix “XI” in the VAT number of their recipients VAT-registered in Northern Ireland for: (i.) the intra-community supplies of goods to such recipients (ii.) the triangular simplifications in which the Bulgarian person acts as an intermediary and the person from Northern Ireland is the acquirer and (iii.) the transfer of own goods from Bulgaria to Northern Ireland under a call-off stock arrangement. Conversely supplies of services made by Bulgarian suppliers to Northern Ireland recipients shall not be reported in the EC Sales Lists. 

The National Revenue Agency clarified that the standard rate of 20% is applicable to in vitro diagnostic medical devices which intend to detect and diagnose COVID-19 and that also, or solely, have the aim to obtain other types of information on physiological or pathological condition or congenital anomalies. In this context, it has been clarified that the 0% VAT rate is therefore only applicable to the supplies and related services of in vitro diagnostic medical devices which only intend to detect and diagnose COVID-19.

 

Czech Republic

The Minister of Finance announced that taxable persons registered for VAT purposes in Czech Republic are exempt from collecting VAT on certain filter half-masks and respirators between 3 February 2021 and 3 April 2021.

It has been recently announced several VAT amendments in Czech Republic. Among them, it is foreseen that:

  • When a corrective VAT return is submitted, in which the total amount of the reported input VAT exceeds the total output VAT liability, the total final amount of the net input VAT deduction shall ordinarily be refunded without the taxable person having to request the refund.
  • When a VAT return generates a VAT credit position, such refund shall be processed within 30 days from the deadline for submitting the relevant VAT return. However, if a VAT audit takes place the refund shall only be processed upon closing such audit. In this context, and considering that the VAT audits can take some time, a new legal instrument named as “provision of the advance payment for net input VAT deduction” was introduced into the Czech Tax Code, in which under certain conditions the taxable person is entitled to receive an advance payment in the amount corresponding to that part of the VAT refund requested in the VAT return which is not being audited.

 

Germany

Considering the ongoing pandemic crisis, Germany has announced the extension of several measures, such as the application of the reduced VAT rate of 7% to supplies of food in restaurants and bars until 31 December 2022 (instead of 30 June 2021 as previously ruled).

 

Greece

Greece extended the application of the reduced VAT rate to coffee and non-alcoholic beverages, transport of persons and their luggage, cinemas and theatrical performances until 30 September 2021.

In addition, the reduced VAT rate applicable to the tourism sector will be applicable until 31 December 2021.

 

Ireland 

Ireland has recently announced that, from 12 December 2020 until the enactment of Finance Bill 2021, the supply of COVID-19 in-vitro diagnostic medical devices, COVID-19 vaccines and related services are subject to a 0% VAT rate.

 

Italy

In line with the Supreme Court interpretation on case No. 12468 of 10 May 2019, the Italian tax authorities clarified that in case of termination of an ongoing contract due to the customers’ failure to pay, the supplier has the right to issue credit notes for all outstanding payments.

The Italian tax authorities clarified that the usual deadline of 1 year to issue the credit notes from the time of the supply does not apply in this situation, instead the credit note shall be issued between the day of termination of the contract and the deadline to submit the annual VAT return for the fiscal year in which the termination occurs in order to recover the VAT incurred on such supplies.

 

Slovakia

The Slovakian parliament has recently announced that a 0% VAT rate is applicable on the supplies of FFP2 and FFP3 respirators.

 

Isle of Man 

The treasury announced that the temporary 5% reduced VAT rate applicable to food, attractions and catering would be extended until 31 March 2021.

 

UK

HMRC has recently updated the guidance regarding the VAT treatment applicable to transactions that occurred in the end of the transitional period and offers an overview of the changes to the VAT treatment of certain items, such as call-off stock, supplies of goods, financial services and Tour Operators Margin Scheme.

HMRC has recently published two updated guidance notices regarding importations into the United Kingdom, which include information such as when import VAT can be accounted for on a VAT return and regarding considerations and actions that businesses must take if they are using the postponed VAT accounting scheme.

 

The above information was kindly provided by Ryan VAT Systems (France), www.vatsystems.eu; contact: news@vatsystems.eu.