Further EU VAT Measures in Response to Coronavirus

Kelsey O'Gorman
April 16, 2020

Sovos recently published a blog regarding prospective measures EU member states are taking in response to the Covid-19 pandemic.  Included below are additional actions introduced from countries across the EU:

European Union

The European Commission has approved requests from all EU Member States to temporarily suspend VAT and customs duties on imported medical equipment.  This move is intended to ease the financial burden on the healthcare industry and applies retroactively from 30 January 2020 until 31 July 2021.  The European Commission noted that this measure may be extended if necessary after consultation with Member States.

Belgium

Certain periodic VAT return deadlines have been extended.  February 2020 returns are normally due on 20 March 2020; the deadline has been extended until 6 April 2020.  March 2020 returns are normally due on 20 March 2020; the deadline has been extended until 7 May 2020. 

Cyprus

Cyprus had previously announced that a temporary reduction of the VAT rates by which the standard VAT rate decreased from 19% to 17% for a period of 2 months and the reduced VAT rate decreased from 9% to 7% for a period of 3.5 months would take effect to provide relief for taxpayers.  This measure has since been withdrawn.

Greece

Payment of VAT due between 11-30 March 2020 has been suspended until 31 August 2020 for certain affected businesses.  Further, the following products are taxable at a 6% VAT rate (as opposed to 24%) until 31 December 2020: protective masks and gloves, antiseptic products, soap, and ethyl alcohol.  New go-live dates for the myDATA mandate have been published, starting from 1 June 2020 with a phased roll out.  Greece is expected to postpone the go-live date even further due to the ongoing pandemic crisis.

Hungary

The Hungarian Tax Authority announced that the deadline to implement mandatory real-time reporting version 2.0 XSD is postponed from 1 April 2020 to 1 July 2020.

Latvia

The State Revenue Service has announced that the reimbursement of overpaid VAT amounts will be issued within 30 days, a shorter period than the existing VAT law provides.

Luxembourg

The tax administration released guidance stating that a failure to file VAT returns within the deadlines will not result in any fines.  Additionally, VAT credit balances below €10,000 will be reimbursed.

Malta

The VAT payments for March and April 2020 may be postponed by taxpayers who have suffered a significant downturn in business without penalties or interest.

Netherlands

Tax authorities will automatically grant an extension of payment of 3 months once the taxpayer requests an extension.  Penalties are waived for late or non-payments once the above extension is requested.

Poland

Poland has deferred JPK_VAT V7M and V7K to 1 July 2020 for all taxpayers.

United Kingdom

VAT payments due from 20 March 2020 through to 30 June 2020 will be deferred.  This applies to all businesses, including non-established taxpayers.  Additionally, the HMRC has stated that the soft landing period for MTD digital links has been extended to 1 April 2021 for all taxpayers.

Sovos Global VAT Solutions

Sovos continues to closely monitor all global VAT developments, including those introduced in response to coronavirus.

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Author

Kelsey O'Gorman

Kelsey O’Gorman is a Regulatory Counsel at Sovos. Within Sovos’ Regulatory Analysis function, Kelsey focuses on global sales tax and VAT issues, supporting both the tax determination and reporting engines. Kelsey received her B.A. in Psychology from University at Buffalo and her J.D. from Roger Williams University School of Law. She is a member of the Massachusetts Bar.
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