Belgium has approved the permanent reduction of the VAT rate on energy to 6%, a VAT rate which is already been in place since March 2022 as a temporary measure. The reduced rate of 6% will permanently apply to supplies of electricity, natural gas, and heat.
On 1 April 2023 ends the temporary period where the reduced VAT rate on energy supplies applies, in this case, both to B2C and B2B supplies.
Once the temporary measure expires, a transitional period is opened until 1 July 2023. During this period, 6% VAT rate will continue to apply to B2C and B2B supplies of electricity, natural gas, and heat.
From 1 July 2023, the 6% VAT rate will apply to these energy supplies only for B2C transactions.
During April 2023, the new Estonian parliament proposed a rise in its VAT rates to improve the country’s financial situation, as well as bolster national defence and green reforms in the country. If accepted, it will see the:
Standard VAT rate rise from 20% to 22% from 1 January 2024.
The VAT rate applied to accommodation services rising the reduced VAT rate of 9% to the standard rate of 22% from 1 January 2025.
The reduced VAT rate of 9% applicable to gas and electricity will be extended until 31 October 2023, instead of the end of February 2023. See the official notice here. The VAT rate is temporarily reduced from 13.5% to 9%.
As part of the set of measures contained in the Irish budget for 2023, Ireland reduces the VAT rate to 0% on newspapers and other products and also cuts permanently the VAT rate applicable to the tourism and hospitality sector to 13.5%.
Find below the breakdown of the VAT rate changes:
Newspapers and news periodicals, including digital editions will be subject to a zero VAT rate, instead of the 9% VAT rate from January 2023.
Some pharmaceutical and health-related products will also change from the standard or reduced rates to zero VAT rate from January 2023. More specifically, the measure will apply to automatic external defibrillators and period products, non-oral hormone replacement therapy, and non-oral nicotine therapy.
Also, as part of the temporary measures, the reduced VAT rate of 9% applicable to gas and electricity will be extended until 31 October 2023, according to the latest update.
On the contrary, the authorities are not extending the temporary VAT rate reduction to 9% in the tourism and hospitality sectors. From March 2023, the VAT rate will be at 13.5%.
The Polish government published some updates on KSeF:
General mandate B2B e-invoicing will start by July 2024. However, the implementation deadline for taxpayers benefiting from subjective or objective VAT exemptions will be January 2025.
Mandate KSef will not cover B2C invoices. Similarly, invoices issued in OSS and IOSS procedures will also be excluded from KSeF.
Penalties shall only be applied from 1 January 2025.
Portuguese government approved as a temporary measure the zero VAT rate (with right to deduct) on a list of essential food products. The zero VAT rate will apply both for the import and domestic supplies made in Portugal, made from 18 April to 31 October 2023. The list of products included in the temporary 0% VAT rate corresponds to healthy essential foodstuffs, such as vegetables, fruits, oils, fish and meat.
Portugal reduces VAT rates on certain goods and services in 2023. The scope of the 6% reduced rate is extended to include a new set of products and services.
Some of these categories are subject to 6% reduced VAT rate in Portugal are:
Canned fish and molluscs when the content of fish is at least 50%.
Vegetal butter, drinks, and yogurts. These can be produced based on dry fruits, cereals, fruits, vegetables, etc.
Sale or repair service of bicycles. However, when it concerns the sale of spare parts of the bicycle, these will be subject to the standard VAT rate (23%).
Access to direct broadcasting of concerts, theatres, amusement parks, museums, cinemas and similar events.
Sale and installation of specific heaters and boilers that work with biomass.
Pellets and briquets made from biomass.
Separately, the registration threshold for established companies will progressively increase from 2023 to 2025 until reaching the EUR 15,000 threshold:
2023: EUR 13,500
2024: EUR 14,500
2025: EUR 15,000
The official notice can be found here.
Due to a rapid increase in inflation, the Spanish government confirmed it will continue to apply the zero rate of VAT to basic foodstuffs up until 30 June 2023.
The temporary zero-rating is applied to bread, flour, certain types of milk, cheeses, eggs, fruits, vegetables, legumes, tubers, and cereals.
Swiss authorities have already published the updated VAT return form including the new VAT rates applicable as of 1 January 2024. The updated form will be used from 1 July 2023, regarding reporting periods July 2023, Q3 2023, and second semester 2023.
The updated VAT return form includes boxes for transactions at the current VAT rates and also at the future VAT rates applicable from 2024. Find here the new VAT return form.##
Switzerland approves the raise of VAT rates in 2024, after the voting procedure that took place the last 25 September.
As a result, the Swiss VAT rates will change as follows:
Standard VAT rate: 8.1%, instead of the current 7.7%
Reduced VAT rate: 2.6%, instead of the current 2.5%
Special VAT rate for accommodation: 3.8%, instead of the current 3.7%
It is expected that the new VAT rates enter into force in January 2024.
It is important to assess the impact of these rate changes in your compliance function. Your VAT reporting team should ensure correct reporting of transactions spanning periods under different rates. Credit notes and continuous supplies of services often raise questions about your correct reporting obligations.
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]