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European VAT News

European VAT News

By June 22, 2023No Comments


At the ETOA Webinar it was discussed the current issues faced by non-EU based tour operators who are selling Croatian tourist package arrangements.

The presenation from this session can be found here.


In May 2023, the Cypriot government approved a temporary reduction in the 5% and 19% VAT rates applied to certain essential goods.

It confirmed that the VAT rate will be reduced from:

  • 5% to zero for milk, bread, eggs, and baby food.
  • 19% to 5% for detergents, fabric softeners, toilet paper, baby and adult diapers, and cleaning supplies.

Czech Republic

The Czech government is proposing to consolidate the country’s two reduced VAT rates of 10% and 15% into a consolidated rate of 12%, as well as reduce the VAT rate on physical books to zero.

The two reduced rates currently apply to the following supplies:

  • 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.
  • 15% – Certain foodstuffs, non-alcoholic beverages, take away food, certain medical goods, certain passenger transport, certain books, e-books, and amusement parks.

If accepted, this could be implemented from 1 January 2024 but there would be no change to the standard VAT rate of 21%.


Danish digital bookkeeping obligation moves forward. Although there are no official dates yet, the Danish authorities have published an estimated timeline for the introduction of this obligation, which is rolling out in phases.

The only certainty in terms of deadlines is that digital bookkeeping obligation will apply from the first accounting or income period that starts after the requirement for digital bookkeeping has come into force.

Service providers are already required to notify their digital bookkeeping solutions to the Danish Virk. If the solution is already on the market, the service provider must notify the authorities before 31 October 2023.

Danish Virk plans to publish a list of registered standard accounting systems meeting the requirements, by January 2024.

Based on the estimated timeline, by July 2024 the first businesses will be subject to the digital bookkeeping obligation. This concerns those companies with an obligation to submit annual accounts and which are already using a standard digital bookkeeping system. For example, companies with a turnover higher than DKK 300,000 in each of the past two years.

Foreign non-established companies’ VAT registered in Denmark may have to comply with this obligation. The fact that you have a Danish VAT number means you have to comply with the bookkeeping law. The obligation for digital bookkeeping arises in the following scenarios, according to Section 6 of the Law:

  • If you have the obligation to submit an annual report, or
  • If your net turnover exceeds DKK 300,000 in two consecutive years.

This obligation must not be confused with electronic invoicing. Although the standard digital bookkeeping systems must allow the issuance of electronic invoices, the new obligation does not dictate how companies must issue their invoices. Official information can be found here.


In May 2023, the certification process for approved French e-invoicing agents ‘partner dematerialization platforms’ (PDP) was opened.not

Resident businesses who are subject to the new mandatory real-time invoice-reporting regime in France can either use a PDP to submit their invoices to the French tax authority or submit these themselves via the French e-invoicing portal (PPF). If a PDP is used, it will provide an interface between the taxpayer and the PPF.

This new mandatory real-time invoice-reporting regime for resident businesses will apply to all its domestic B2B transactions in the country. The deadline for the introduction of the regime will be staggered depending on the size of the business as per the below:

  • From 1 July 2024 – Large enterprises (enterprises with more than 5,000 employees and either a 12-month turnover exceeding EUR 1.5 billion or a balance sheet exceeding €2 billion)
  • From 1 January 2025 – Intermediate enterprises
  • From 1 January 2026 – Small and medium enterprises (enterprises with less than 250 employees and either a 12-month turnover not exceeding €50 million or a balance sheet not exceeding €43 million)

This new regime will impact resident businesses that sell to other VAT registered businesses in the country and will force them to declare their sales to the French tax authorities via a new e-invoicing platform. This is instead of sending invoices to their customers themselves.

The French tax authority will then check these invoices, and if correct, it will approve them by applying a digital stamp. It will then send the invoice directly to the customer on behalf of the supplier via the new system.

It is hoped this new invoice-reporting regime will prevent common errors on these types of invoices and help prevent VAT fraud in the country.


Spain approved a temporary 0% VAT rate applicable to certain basic foodstuffs until 30 June 2023.

The basic foodstuffs included in the temporary zero VAT rate are the following:

  • Common bread, including frozen bread.
  • Flour for bread.
  • Animal milk
  • Cheese
  • Eggs
  • Fruits, vegetables, legumes, and cereals that are considered natural products.

The measure is agreed to fight the impact of current levels of inflation. This is why, the 0% rate applies, in principle, from 1 January to 30 June 2023; however, the 4% VAT rate will apply by 1 May in case the inflation rate for March is below 5.5%.

This measure joins to the temporary 5% VAT rate applicable on certain energy supplies until 31 December 2023.

Find the official announcement here.


During May 2023, HMRC closed its manual VAT return submission portal which was used by businesses to manually input VAT return figures, which now means that all VAT returns must be submitted via a certified Making Tax Digital (MTD) compliant software.

MTD was launched back in 2019 and required VAT registered businesses to use special software to submit VAT return figures directly to the HMRC electronically.

Fiscal Solutions has its very own HMRC approved MTD compliant bridging solution, which is easy to use, competitively priced and enables businesses to meet the demands of MTD in the UK.

The above information was kindly provided by: