Bulgaria
Bulgaria has amended its VAT Act to provide relief on bad debts from 1 January 2023.
Prior to January 2023, Bulgaria did not have a provision for bad debt relief in its legislation. This meant that suppliers that had paid VAT to the Bulgarian tax authorities relating to sales invoices that remained unpaid could not reclaim the VAT amounts back. This is contrary to the EU VAT Directive, which requires neutrality from a VAT standpoint.
Bulgaria extends the VAT rate reduction of 9% on certain goods and services
The Bulgarian tax authorities have confirmed that the VAT rate applicable on the following goods and services will remain at 9% until the end of 2023:
- Restaurant and catering services
- Tour operator services, including the organisation of excursions by tour operators and travel agents with occasional transportation
- Books and some other publications
- Services related to the use of sports facilities
- Foods suitable for babies and young children as well as baby nappies and similar baby hygiene products.
Croatia
From 1 January 2023, Croatia became the 20th country to adopt the Euro currency.
This change means that all businesses trading under a Croatian VAT registration must issue all sales VAT invoices in the Euro currency going forward.
Czech Republic
The Czech government is proposing to consolidate the country’s two reduced VAT rates of 15% and 10%, and if accepted, these rates would be consolidated into a single rate of either 14% or 13%.
The two reduced rates currently apply to the following supplies:
- 15% – Certain foodstuffs, non-alcoholic beverages, take away food, certain medical goods, certain passenger transport, certain books, e-books, and amusement parks.
- 10% – Baby and gluten free Foodstuffs, newspapers, certain pharmaceutical goods and services, accommodation, restaurants and hospitality services, certain books and e-books, and admission to cultural events.
If accepted, this could be implemented by 1 January 2024, but there would be no change to the standard rate of VAT, which would remain at 21%.
France
France launches a new one-stop shop portal for all company and business formalities, known as formalités d’entreprise. Companies must start using this portal from January 2023. The portal allows performing the main company’s life administrative obligations in one single point: incorporating entities, changing entity details and liquidating them, as well as some procedures related to industrial property and brands.
Foreign companies and their tax agents must also start using the new portal for submitting their applications for VAT registration or de-registration in France, as well as to notify other types of changes, such as the change of tax agent, a change in the company’s name or address, etc.
The objective is to unify and simplify the management of these formalities both for companies and the authorities.
Italy
Italy reduced the VAT rates on feminine hygiene products, baby products, and face masks.
The following products will be subject to 5% VAT rate now:
- Feminine hygiene products
- Baby products, including baby diapers, children’s car seats, and food products for especially conceived for infants and young children.
- Face masks, and other protective equipment related to the fight against the COVID-19.
Separately, the reduced VAT rate of 5% on district heating services is extended during the first quarter 2023. Therefore, this reduced VAT rate will apply for the months of January, February and March 2023.
The official legislative text is published here.
Romania
From 1 January 2023, the Romanian government has confirmed that the VAT rate applied to accommodation and catering services, including restaurants, cafes, and hospitality services, has risen from 5% to 9%.
The VAT rate on some services was reduced to 5% to help the Romanian hospitality sector recover from the impact of COVID-19.
Spain
To prevent VAT fraud, Spain has introduced a domestic reverse charge on supplies of gold, mobile phones, game consoles, laptops, and computer tablets.
This new mechanism was introduced from 1 January 2023 and means that businesses providing these types of goods will no longer be able to charge VAT on their supplies to other business customers. Instead, it will be the customers’ responsibility to account for the VAT in their own returns.
United Kingdom
From 1 July 2023, Jersey has confirmed that it will impose a Goods and Services Tax (GST) or VAT on the sales of e-commerce goods and services made to consumers by non-resident businesses.
At present, non-resident businesses providing e-commerce supplies in Jersey (one of the Channel Islands under UK sovereignty) do not have to charge GST/VAT on their sales. However, to remove the unfair advantage given to non-resident companies, the Jersey State Assembly confirmed that GST/VAT at 5% will be applied to these types of transactions.
The assembly also confirmed that there will be a compulsory registration threshold of £300,000.
The above information was kindly provided by
- Fiscal Solutions (UK), www.fiscalsolutions.co.uk; contact: [email protected].
Marosa (Spain); contact Pedro Pestana at: [email protected]
