Estonia
From 1 January 2024, Estonia increased its standard VAT rate from 20% to 22%.
There was no change to the reduced VAT rates of 9% and 5%.
Finland
The Finnish government has reproposed classifications of its reduced VAT-rated supplies in its 2024 budget proposals. It has proposed the following:
A VAT rate rise from 10% to 14% on:
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Books
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Hotel services
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Public transport
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Some pharmaceuticals
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Entrance to cultural & sporting events
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Film screenings
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Royalties for television and public radio activities
A VAT rate reduction from 24% to 14% on:
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Tampons
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Nappies
If accepted, these revised rates will be introduced from 1 January 2025.
Latvia
Latvia’s Ministry of Finance is proposing to introduce a mandatory electronic invoicing regime for business to business and business to government transactions, by the end of 2025.
Under current invoicing rules, Latvian public and government institutions must issue and accept electronic invoices. However, if accepted and introduced the new regime will make it mandatory for all VAT-registered companies to issue their invoices in an electronic format when selling to other businesses and government departments.
Latvia joins other EU countries that have recently announced plans to introduce e-invoicing, including France, Germany, Belgium, Poland, Ireland and Spain.
Luxembourg
From 1 January 2024, Luxembourg will increase the standard rate of VAT (which applies to most goods and services supplied in the country) from 16% to 17%.
At the same time, the lower VAT rates (which applies to a limited amount of goods and services including printed materials, gas and electricity) will also increase from 13% and 7% to 14% and 8% respectively. This increase will take the VAT rates in the country back to their normal levels and ends the temporary reduction that was implemented from January 2023.
North Macedonia
From 1 January 2024, the North Macedonian Ministry of Finance imposed VAT on digital and telecommunications services provided by non-resident providers in the country.
Previously foreign businesses providing these types of services to consumers did not charge VAT on their sales. However, to remove the unfair advantage that this gave non-resident companies over resident providers, VAT at 18% has now been applied to these types of transactions.
Spain
The Spanish government confirmed it will continue to apply the temporary zero rate of VAT to basic foodstuffs up until at least 30 June 2024.
The temporary zero-rating was introduced due to rapid increases in inflation and applies to bread, flour, certain types of milk, cheeses, eggs, fruits, vegetables, legumes, tubers, and cereals.
Switzerland
From 1 January 2024, the Swiss tax authorities will increase the VAT rates in the country as follows:
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Standard rate – 7.7% to 8.1%
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Reduced rate – 2.5% to 2.6%
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Special VAT rate for accommodation – 3.7% to 3.8%
This is being implemented to try to raise funds to cover the pension deficit caused by the ‘baby boomer’ generation.
The above information was kindly provided by: Fiscal Solutions (UK), www.fiscalsolutions.co.uk; contact: [email protected]
