Cyprus
The Cypriot government has extended the temporary reduction in the 5% and 19% VAT rates applied to certain essential goods until 30 April 2024.
The VAT rates have been reduced from:
- 5% to 0% 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 has agreed 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 Bill now requires re-approval in the lower house, and then by the upper senate house in order to be implemented by 1 January 2024.
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, takeaway food, certain medical goods, certain passenger transport, certain books, e-books, and amusement parks.
There will be no change to the standard VAT rate of 21%.
Finland
In a recent development, the Finnish Tax Administration updated the official guidance regarding the VAT treatment of the rental of parking spaces for vehicles. The updated guidance explicitly recognizes that charging electric vehicles in connection with the rental of a parking space is a separate supply of goods for VAT purposes in Finland. This means that businesses providing electric vehicle charging services as part of parking space rentals will now be subject to the standard VAT rate of 24%.
Furthermore, the rental of the parking space itself is generally subject to the 24% VAT rate, unless the supply is exempt from VAT, such as in the case of VAT-exempt rental of business premises or an apartment.
As the popularity of electric vehicles continues to grow, staying informed about VAT changes and ensuring compliance is vital for businesses operating in this sector.
France
France has recently implemented significant changes in its tax regulations, specifically in the area of VAT fiscal representation. The introduction of the new accreditation requirement adds an additional layer of oversight to this process. To represent a client for VAT purposes, the fiscal representative must obtain accreditation from the tax office. This accreditation is a prerequisite for all new VAT registrations.
Fiscal representation accreditation involves meeting specific criteria and complying with regulations set forth by French tax authorities. These criteria aim to promote transparency and accountability within fiscal representation arrangements and include:
- Capacity Condition: The tax representative must demonstrate the presence of an administrative infrastructure, as well as sufficient human and material resources to effectively fulfil their representation duties.
- Solvency Condition: The tax representative must exhibit financial solvency in relation to their obligations as a representative. Alternatively, they may establish a bank guarantee equivalent to a quarter of the annual VAT liabilities of the foreign company they represent.
- Morality Condition: The tax representative must have a clean record, free from serious or repeated offenses against tax provisions.
The above criteria are described in Article 289A of the French Tax Code.
The implementation of the fiscal representation accreditation requirement in France marks a significant milestone. It highlights the importance of remaining well-informed about evolving tax regulations and partnering with reputable representatives to navigate the intricate landscape of VAT in France.
Ireland
The Irish government has confirmed that from 1 October 2023, the VAT rate applied to hospitality, hotels, and tourism will rise from 9% to 13.5%. This includes the following services:
- Entrance to cinema, sporting, cultural, circus, concert, and amusement parks
- Restaurant, cafe, and general catering services
- Hotel, guest and holiday accommodation
- Hairdressing services.
The VAT rate on these services was reduced to 9% to help the Irish hospitality sector recover from the impact of COVID-19.
Portugal
The Portuguese government has extended the temporary reduction on basic food items from 7% to 0% until 31 March 2024.
This reduction applies to 46 basic food items, including milk, bread, rice, tomatoes, and some meat and fish in the country.
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]
