In less than six months, Poland is going to introduce its long-awaited CTC clearance e-invoicing mandate – a tax reform that will impact a large amount of businesses.

It has been possible to issue and receive e-invoices voluntarily via Krajowy System E-Faktur (KSeF) since January 2022, but from 1 July 2024 it will become mandatory for suppliers and buyers that are in scope of mandatory e-invoicing to do this via KSeF.

A detailed understanding of the new regime, plus timely and proper preparation, is critical for compliance. Whilst there is a six-month grace period on financial penalties, non-compliance can negatively impact your business in many other, often unexpected, ways.

In this 45-minute deep-dive webinar, Marta Sowińska from our Regulatory Analysis and Design team will cover:

Join us on 8 February at 2pm GMT | 3pm CET for a thorough review of the Polish KSeF e-invoicing mandate and the opportunity to submit your questions.

Register today

As tax authorities continue to digitize processes in their mission to reduce fraud and close their VAT gaps, they are introducing requirements that provide greater visibility into a company’s financial operations in the form of Continuous Transaction Controls (CTC).

It would be a mistake to think that being prepared to meet obligations in one of the countries where you operate can simply be replicated in another – CTCs are far from a ‘one-size-fits-all’ solution.

Join us on 24 January 2024 in our latest quarterly VAT Snapshot webinar series where regulatory experts Dilara Inal and Marta Sowinska will examine how tax authorities in Poland, Romania, Israel, Greece and Spain – all simultaneously implementing CTC regimes – are doing so with different sets of requirements.

Don’t miss this opportunity to learn more about these unique regimes and what they mean for your business.

Register now.

The convergence of traditional Value Added Tax (VAT) and transactional compliance regimes is creating new obligations and responsibilities for companies doing business around the world. When it comes to VAT, compliance is so much more than just reporting.

Here are six pitfalls you should avoid in the pursuit of VAT compliance:

 

1. Making the wrong VAT decision at the outset

Companies with multijurisdictional supply chains must ensure their VAT determination decisions are accurate every time. Managing the validation process with VAT Determination software that checks validity before invoices are cut can save time and improve data accuracy from the outset.

It’s also best practice to complete your buyer VAT ID checks at this point in the process to avoid nasty surprises later. Checking manually can be incredibly resource-intensive so using a solution that can automate this for you can save both time and hassle.

 

2. Not having a legally valid invoice

To be considered legal for VAT purposes, invoices need to meet a specific set of requirements which vary by jurisdiction. Without legally valid invoices, you may be presented with a host of problems when the time comes to reclaim input VAT. If you have accepted an invoice that doesn’t tick the boxes that make it legal for VAT purposes, you invite the scrutiny of the tax authorities.

Aside from possible fines, the delay while anomalies are reviewed can impact your cash flow and cause reputational damage. Even in a paper world, VAT deduction is not permitted for improperly formatted invoices.

 

3. Missing reporting deadlines

With VAT obligations always growing and adapting, the pressure on internal tax teams is greater than ever. Each government has its own approach to penalties for late submissions or overdue payments. Manual processes can no longer be relied upon to meet the demands of the authorities on time, and with accuracy.

It’s possible to streamline the reporting process using software, outsourced services or a hybrid approach; what’s best for your business depends on how your tax team is organised.

 

4. Manual error

With new requirements coming thick and fast, teams are working harder and faster. As a result, opportunities for manual error are at an all-time high.

Manually processing VAT invoices can be incredibly time-consuming and leaves room for oversight and human error. Even individual errors can lead to bigger problems down the line, attracting the attention of the authorities and impacting your ability to do business.

 

5. Challenges with data extraction and mapping

Extracting the right data from the appropriate system modules, and then processing and mapping it so that it can be summarised, is a complicated and detailed task. To complicate matters further, each jurisdiction has its own unique reporting requirements you must meet. Automating these processes can improve accuracy and your ability to comply.

 

6. Not reviewing data prior to submission

Preparing VAT Returns, EC (European Commission) Sales Lists, Intrastat Declarations and other country-specific reports for regular submission can be demanding. Add in the need to prepare a SAF-T (Standard Audit File for Tax) report and the complexity intensifies. SAF-T requirements differ by country, including transactional data (about sales and purchases) and accounting data at a minimum, but often need information about assets and inventory as well.

Combining detailed data from different source systems with an exacting submission format means the report cannot be easily eyeballed to check for possible errors. Tax Authorities use software to analyse the SAF-T filings   they receive and decide where to follow up with further auditing. To safeguard the quality of the submission and avoid a call from the tax authority, it’s essential that data is thoroughly analysed before it’s submitted – ideally using tools of the same calibre that each Tax Authority is using.

 

It’s never been more important to seek the right advice for VAT. Admitting you need help can be a daunting but crucial step, but the fear of non-compliance should be a bigger concern.

Simply put, there comes a time for every multinational organisation when managing complex tax obligations in-house just isn’t viable anymore. Consolidating your compliance with Sovos gives you access to industry-leading software, consulting services and regulatory experts, all of which are focused on ensuring you’re compliant now and will remain so in the future.

To find out more, get in touch today.

Infographic

The Tax Authorities are in Your Data

A reactive or ad hoc approach to tax compliance across the markets you do business in can mean the authorities have a better overall view of your data than your own internal teams. How confident are you that you have the same view of your data as the tax authorities?

EU-based companies must grapple with VAT charges on a myriad of goods transactions within the EU. As a manufacturing company, this intricate web of varying VAT rates can pose significant challenges. Choosing the right EU entry point is a pivotal decision, complicated by each country’s unique VAT regulations. Compounding the complexity, you may not always know the precise location of your goods in transit.

Manufacturers face supply chain disruptions, potentially jeopardising their already sophisticated operations. The question is, where should you commence your VAT journey?

Our VAT expert Russell Hughes guides you in this immersive webinar, where you will gain insights into:

Join us on this transformative journey through the VAT labyrinth and gain a competitive edge in the EU market. Don’t miss this opportunity to optimise your expansion strategy.

 

Register now.

Greece’s VAT reform started back in 2020 and it has manifested itself in three continuous transaction control (CTC) initiatives.

Namely, the initiatives are:

Recently, the introduction of an e-transport mandate was included in the country’s VAT reform strategy, although not much detail has been published yet.

More progress has been made in implementing the myDATA scheme and the new cash registers than for CTC e-invoicing. However, in the last few months, the authorities have taken steps towards setting up the right framework to make CTC e-invoicing – which is currently voluntary for B2B transactions – mandatory for all.

myDATA e-audit reform

myDATA went live as a voluntary system in 2020 and followed a gradual implementation timeline which is ongoing. It is an e-audit system that requires taxpayers to report transactional and accounting data to the tax administration, in real-time or periodically, which populates a set of online ledgers maintained on the government portal. The goal of myDATA is for the online ledgers to be the only source of truth of the taxpayer’s tax and financial results, and for their respective information to pre-fill the taxpayer’s VAT returns and financial statements.

Greece’s myDATA is a reporting obligation of ledger-type data and it is not to be confused with e-invoicing as it doesn’t require invoices to be issued and exchanged in electronic form. Greece allows for invoices (in B2B transactions) to be issued and exchanged on paper or electronically following the standard e-invoicing rules of the EU VAT Directive.

B2B e-invoicing reform in Greece

In parallel with the roll-out of myDATA, the authorities established an accreditation framework for e-invoicing service providers and introduced a voluntary e-invoicing scheme involving accredited entities. These entities are accredited by the government to perform certain functions, namely:

To encourage the uptake of CTC e-invoicing, the government provided several incentives to businesses to use e-invoicing facilitated through accredited service providers. It also obliged businesses who opt for CTC e-invoicing to use no other methods to fulfil the myDATA requirements e.g., ERP reporting, except through accredited service providers. This implies that a business selecting CTC e-invoicing for its B2B transactions must use the same method for issuing and reporting all other invoices, including B2G transactions, and vice versa.

B2G e-invoicing reform in Greece

CTC e-invoicing became mandatory for B2G transactions on 12 September 2023 for VAT-registered suppliers to certain government agencies. The mandate will continue to roll out in phases with the next main milestone coming up in January 2024. This obligation covers the vast majority of public contracts, from defence and security to general supplies and services, with some exceptions (e.g. contracts in defence and security which are classified as secret).

With the introduction of the B2G e-invoicing mandate, the use of CTC e-invoicing has indirectly become mandatory for B2B transactions too, encompassing both issuance and reporting to myDATA. It means that businesses in the scope of the B2G e-invoicing mandate have the obligation to use CTC e-invoicing through accredited e-invoicing service providers to issue and report both their B2B and B2G e-invoice flows to myDATA.

While a B2B e-invoicing mandate cannot be introduced without prior approval by the European Commission, the Greek Ministry of Finance announced that it has started a dialogue with the Commission to discuss the conditions required to implement a nationwide mandate.

Although an ambitious timeline, the Ministry envisions a full implementation of a B2B e-invoicing mandate within 2024.

Looking ahead

Clearly, Greece’s CTC initiatives are in line with the EU paradigm shift towards increased governmental control over transactional and accounting data – it recognises the benefits of tighter tax compliance and taking steps to close its tax gap.

Significant progress has been made, with myDATA operational since 2021. With the addition of CTC e-invoicing and the e-transport mandate in the VAT reform strategy, the Greek government and businesses face a demanding period in the coming years.

Need help with the current VAT reform in Greece? Our expert team can help.

How can manufacturers navigate the ever-evolving and increasingly complex world of value added tax (VAT)? There are several, key ways to evaluate your current and future approach to VAT, maintaining compliance the entire way.

1. Ensure alignment between IT and tax teams

Far too often we have seen IT-centric processes miss (or at least misunderstand) key compliance needs and requirements, and tax-centric processes fail to consider the practicalities of automation. Both tax and IT must realise that they will need each other for ongoing maintenance and solution expansion initiatives.

2. Continually establish and evolve processes to share up-to-date compliance documentation

Organisations would be well served to establish and share solid documentation around their compliance protocols and conduct periodic reviews to ensure they are continuing to do what is necessary to minimise audit risk and keep their company safe.

3. Recognise the consequences of non-compliance

There are both tactical and strategic questions at play here, and manufacturers must make thoughtful business decisions around how to handle the level of VAT compliance requirements that their operations demand. Increased audit volume is coming, so the industry has to commit to effectively and efficiently meeting the ever-growing compliance obligations of e-invoicing and periodic reporting.

4. Regularly review your indirect tax strategy

Although you may have an indirect tax strategy in place, make sure to evaluate how effective your current strategy is, especially as requirements are undergoing significant changes in so many jurisdictions. Is your strategy sufficiently up-to-date to ensure it efficiently and accurately addresses current and upcoming compliance obligations and is scalable to seamlessly meet the rapidly evolving needs business will face tomorrow.

5. Use automation and cloud-based solutions

Digital identity verification and transaction management frees your organisation from regulatory friction and our intelligent solutions integrate with your processes to ensure valid and future-proof transactions.

Sovos helps you remain focused on your central business by reducing the friction of complex tax digitisation mandates. We take a future-facing approach to indirect tax compliance with intelligent tools that provide insights for a competitive advantage.

Learn about compliance solutions built for manufacturers!

 

With the rate of change in tax digitization not set to slow down any time soon, it’s more important than ever to keep up with what’s happening where you do business.

This quarter, our VAT Snapshot webinar looks in detail at CTC and e-invoicing implementation timelines across six different countries.

Join Dilara İnal and Carolina Silva from our Regulatory Analysis and Design team for an examination of scope, key timelines and essential milestones for compliance across these jurisdictions.

The webinar will cover:

As always, please bring your questions for our experts in the Q&A at the end.

Stay up to date with the evolving landscape of tax mandates by registering today.

Register now.

Intrastat thresholds are value thresholds which decide if companies in an EU Member State qualify to file a return to tax authorities, based on their intra-community trading. These thresholds change annually, prompting businesses to conduct an annual recalculation to know their obligations.

This blog contains all the Intrastat reporting thresholds for 2024, as well as important information for businesses trading within the EU. It will be updated to reflect any changes as soon as they are implemented.

Level up your Intrastat knowledge with our handy Intrastat guide, which covers reporting requirements, returns and declarations, commodity codes, how Sovos can help and more.

What are Intrastat thresholds?

Intrastat thresholds are annual value thresholds that decide whether businesses must declare their intra-EU trades to the relevant national tax authorities.

While Intrastat is based on a European Union regulation, Member States have implemented the rule differently. As such, companies trading across the EU must be aware of the exemption threshold for each country they trade in – whether that’s acquiring or dispatching goods.

When a business exceeds the threshold in a Member State, it must continue to file Intrastat returns with the country until the applicable January-to-December period has concluded.

How can I calculate Intrastat thresholds?

Intrastat thresholds must be calculated each year as they change annually, and there are separate values for arrivals and dispatches.

To make it easy for your business, we have listed all the Intrastat thresholds below in a table – country-by-country. Find out whether your company needs to file an Intrastat return in EU Member States where you do business.

Intrastat thresholds in 2024

The current Intrastat thresholds have been in place since the beginning of the year. They are due to change again in 2025. For the current applicable thresholds for your business, view the table below.

The table will be kept updated with the latest threshold values.

Country Arrivals Dispatches
Austria EUR 1.1 million EUR 1.1 million
Belgium EUR 1.5 million EUR 1 million
Bulgaria BGN 1.65 million BGN 1.9 million
Croatia EUR 400.000 EUR 200.000
Cyprus EUR 270.000 EUR 75.000
Czech Republic CZK 15 million CZK 15 million
Denmark DKK 22 million DKK 11 million
Estonia EUR 700.000 EUR 350.000
Finland EUR 800.000 EUR 800.000
France No threshold No threshold
Germany EUR 800.000 EUR 500.000
Greece EUR 150.000 EUR 90.000
Hungary HUF 250 million HUF 140 million
Ireland EUR 500.000 EUR 635.000
Italy EUR 350.000 (goods)
EUR 100.000 (services)
No threshold
Latvia EUR 330.000 EUR 200.000
Lithuania EUR 550.000 EUR 400.000
Luxembourg EUR 250.000 EUR 200.000
Malta EUR 700 EUR 700
Netherlands The Netherlands have abolished the Intrastat threshold. Intrastat has become a report to submit “on demand” of the Dutch authorities. The Netherlands have abolished the Intrastat threshold. Intrastat has become a report to submit “on demand” of the Dutch authorities.
Poland PLN 6.2 million PLN 2.8 million
Portugal EUR 400.000 EUR 400.000
Romania RON 1 million RON 1 million
Slovakia EUR 1 million EUR 1 million
Slovenia EUR 200.000 EUR 270.000
Spain EUR 400.000 EUR 400.000
Sweden SEK 15 million SEK 4.5 million
United Kingdom GBP 500.000 GBP 250.000

Intrastat threshold exemptions and exceptions

Businesses that trade within an EU Member State but at figures lower than those listed in the above table are not required to file Intrastat returns. There are additional nuances that exist on a country-by-country basis that may change the obligations of a company.

The Netherlands removed its threshold in 2023. Its tax authorities will notify taxpayers subject to submitting Intrastat returns. They monitor intra-community transactions performed by domestic taxpayers monthly.

Italy and France differ from other countries as it has combined Intrastat returns and ECSL returns into a single declaration.

It can be difficult to stay on top of Intrastat, especially with the variety among countries, but Sovos can help. Contact our team of experts to find out how we can assist.

If you are interested in learning more about European VAT compliance, download our free eBook.

How Sovos can help with Intrastat

Sovos’ Advanced Periodic Reporting (APR) is a cloud solution. It mitigates the risks and costs of compliance, futureproofing and streamlining the handling of your periodic reporting – including Intrastat.

Our solution automates, centralises and standardises the preparation, reconciliation, amendment and validation of summary reports to make meeting your obligations simple.

Intrastat is an obligation created in 1993 that applies to certain businesses that trade internationally in the European Union. Specifically, it relates to the movement of goods – arrivals and dispatches – across EU Member States.

The requirements of Intrastat remain similar across the EU, though certain Member States have implemented rules differently. As a result, it can be confusing when trading cross-border in the region.

From reports and returns to thresholds and specific codes, knowing what applies to your business and how to comply is important. Consider this your go-to guide to understand Intrastat rules, requirements, reporting and terminology.

Intrastat reporting

Intrastat reporting largely involves statistics but does occasionally require fiscal data. The information needed depends on the threshold of the EU Member State that your business is established within.

The mandatory data in Intrastat reports were originally regulated by Article 9 of Regulation (EC) No 638/2004, which is no longer in force, though it also lists optional elements for reporting consistency across the EU. Typical data requirements included:

In 2022, a project for the modernisation of Intrastat was introduced, Regulation (EC) No 638/2004 was abolished, and a new Regulation 2019/2152 entered into force. In addition to the data mentioned above, it made the following information mandatory in all Member States:

Optionally, Member States can also opt to ask for:

Intrastat return

An Intrastat return, also known as an Intrastat declaration, replaced customs declarations in 1993 to serve as the source of trade statistics within the European Union.

These returns provide the European Commission, as well as EU National Customs Authorities, with detailed insights into the goods being traded in the European Union. Due to the information required in the declarations, authorities can identify the kinds of goods that are circulating, as well as the volume of such goods.

If a company does not submit Intrastat returns when qualifying to do so it might be liable to hefty fines.

It’s important to understand how Intrastat works with other compliance obligations in general, such as submitting VAT returns, recapitulative statements (EC Sales Lists) and, notably for e-commerce sellers in the EU, schemes like Union OSS.

Do I need to submit an Intrastat return?

Intrastat returns are required when your business dispatches goods to or acquires goods from another EU Member State when the value exceeds the country’s threshold. Each Member State sets the deadline for the submission of declarations to its respective national tax authority.

In Germany, for example, applicable businesses must report every month, with each declaration required within 10 days after the end of the reporting period ending. This can be done online or through the Germany statistics authority portal.

Your business should check the value of goods traded within EU Member States for the past year to see whether they exceed national thresholds.

Intrastat thresholds

Qualifying thresholds dictate whether a business must register for Intrastat or not. These thresholds must be calculated each year, with each EU Member State having its own figure that changes annually.

When a threshold is exceeded in a country, businesses should continue to file Intrastat returns until the applicable January-December period is complete.

Read our blog for a comprehensive Intrastat threshold table containing each country’s qualifying figure.

Intrastat numbers

Otherwise known as commodity codes or Combined Nomenclature (CN), Intrastat numbers are part of a system allowing authorities to identify the types of goods traded across the European Union. The requirements for Intrastat numbers are largely the same across EU Member States, with just a few exceptions.

These numbers, or codes, are part of an eight-digit system that is comprised of Harmonized System (HS) codes and EU subdivisions. They contain complete nomenclature for the description of goods and are subject to annual revisions, ensuring they are up to date with technology and trading patterns.

The European Commission published the Intrastat numbers for 2023 in October 2022.

How Sovos can help

Sovos’ SAP Framework for periodic reports including Intrastat takes care of the extraction of data required to generate periodic reporting for businesses. Sovos’ solution generates compliant Intrastat reports by extracting data from required SAP modules. Using SAP with this add-on provides a framework for periodic returns including Intrastat, EC Sales Lists and SAF-T.

In turn, this increases the ease of compliance and reduces the risk of penalties from incorrect filings – producing cost and time savings for your business.

Speak to our team about how we can help with Intrastat compliance.

 

Frequently Asked Questions

Is Intrastat still required after Brexit?

Intrastat returns are still required by businesses registered for VAT in the UK, even after Brexit, with respect to supplies of goods from the EU into Northern Ireland and vice-versa.

Who needs to file Intrastat?

Businesses in the EU that trade goods with other EU countries – whether they’re dispatched or received – need to file Intrastat returns if the annual trade value exceeds the applicable country’s threshold.

What is Intrastat reporting in Europe?

Intrastat is a system which allows the European Union to track traded goods between its Member States. It was devised to replace customs reporting on the movement of goods within the EU, which stopped in 1993.

What is an Intrastat code?

Intrastat divides goods into categories that are identified by eight-digit codes. These categories are typically referred to as Intrastat codes, commodity codes or Combined Nomenclature (CN).

 

Want to learn about EU VAT compliance? Our Introduction to EU VAT is a great place to start. We also have specific guides to help you understand important EU tax requirements, including the EU VAT e-commerce package and VAT between European countries.

Sovos’ recent observations of audits by EU Tax Authorities are that Tax Officers are paying more attention to the contents of One Stop Shop (OSS) VAT Returns. They have challenged, and even excluded, companies from this optional scheme.

OSS VAT returns must contain details of supplies made to customers in each Member State of consumption by the taxable person. Supplies that need to be reported are as follows.

Non-Union scheme

Supplies of services to non-taxable persons taking place in the EU. This includes supplies of services taking place in the Member State of identification.

Union scheme

Supplies of services made to non-taxable persons taking place in a Member State in which the supplier is not established. This includes the intra-community distance sales of goods.

Additionally, a taxable person can also declare domestic supplies of goods for which they are a deemed supplier in the Union scheme.

OSS VAT Return exemptions

A taxable person might be excluded by the Member State of identification from the scheme for several reasons. Considering the most common reasons, it’s important to note the following:

Let’s look at two case studies to further demonstrate the above.

Frequency of OSS VAT Returns

A taxable person submits a quarterly OSS return and pays the VAT owed by the last day of the month, following the end of each quarter. If they have not sold any goods in the EU during a tax period, they should submit a nil return.

OSS VAT Return deadlines

Taxable persons must submit their quarterly OSS VAT returns according to the following schedule.

If the due date falls on a weekend or bank holiday, the deadline is not moved to the next workday.

Case Study 1

A company, established and VAT registered in Spain, applied to the optional OSS Scheme under the Union scheme.

This company has an e-commerce store and customers can request delivery to their premises in any EU Member State. Under the terms and conditions on the website, the company clarifies that this channel is only for private individuals.

However, during an audit carried out by the German Tax Authorities, it has been noticed that some supplies are carried out in favour of business customers.

In some cases, the business customers have just shared their company name. In other cases, the companies have included their German VAT number in the purchase order on the internet (e.g. under “Additional comments”) and this information has been included on the invoice issued by the Spanish company.

Under these circumstances, the German Tax Office has provided the Spanish company with a warning as:

Case Study 2

A company established and VAT-registered in Turkey applied to the optional OSS Scheme under the Union scheme in Slovakia.

This company has an e-commerce store and customers request delivery from Slovakia, where the main supplier of the Turkish company is located, directly to their premises in any EU Member State.

Due to financial issues, the Turkish company has not paid its VAT liabilities despite submitting the OSS VAT returns on a timely basis.

Slovakian Tax Authorities have decided to exclude the company from the OSS Scheme.

Under these circumstances, the Turkish company:

What’s next for OSS?

The information about the supplies, available from EU Tax Authorities, will increase massively with the implementation of the Central Electronic System of Payment information (CESOP).

On 18 February 2020, the EU Council adopted a legislative package requesting payment service providers to transmit information on cross-border payments originating from Member States and on the beneficiary (“the payee”) of these cross-border payments.

Under this package, payment service providers offering services in the EU will have to monitor the payees of cross-border payments. They will have to transmit information on those who receive more than 25 cross-border payments per quarter to the administrations of the Member States.

As mentioned by the Tax Authorities:

Payment Service Providers in the EU will need to report cross-border payments on a quarterly basis as of Q1 2024, with the first report due by 30 April 2024.

Sovos’ recommendations

We suggest double-checking the quality of the data included in your OSS Returns to the possibility of exclusion from the scheme.

Sovos’ experts are at your disposal to support you through a pre-audit of your data or corresponding with the Tax Authorities. Contact our team for more information.

With the publication of Resolution 097-2023, the National Superintendency of Customs and Tax Administration of Peru (SUNAT) has established the procedure for refunding the general sales tax (IGV) to tourists.

The establishment of this facility previously required a series of reforms and adjustments to Peruvian regulations. This regulation is preceded by Supreme Decree No. 226-2020-EF which modified the regulations of the General Sales Tax and Selective Consumption Tax Law to incorporate tax refunds for tourists – defined as foreign natural persons not domiciled in the country and who remain for no more than 60 days.

At the beginning of 2023, SUNAT published Resolution 005-2023 through which the regulation of payment vouchers and the rules on electronic issuance were modified. The administration changed the rules to allow the issuance of invoices to tourists entering the country.

This invoice can be issued at authorised establishments when goods are sold. In this case, the identification data of the purchaser will not be RUC but a passport.

SUNAT published Resolution 091/2023 in April 2023 to establish rules for the Register of Authorized Establishments (REA) to regulate the registration, permanence and exclusion of taxpayers for the right to return the IGV to tourists.

VAT Refund Procedure for Tourists

On the date of their departure from Peru, tourists who have not exceeded the authorised time of stay in the country can initiate the return procedure with the collaborating entity. Tourists can use the self-management kiosk or the mobile application, which is available inside international air or sea terminals.

The VAT refund procedure for tourists is as follows:

  1. The tourist must enter their identity document into the self-management kiosk or the mobile application. It must be the same one provided for their TAX FREE records. In the case of the mobile application, they must scan the QR code.
  2. Select the certificates that correspond to the goods that the tourist bought and is taking abroad.
  3. The system will assign the channel: red or green.
  1. If the information is validated, the system generates the return request.

The payment to the credit or debit card will be made within five calendar days from the request being registered, discounting the commission that the collaborating entity charges for this service.

Checkpoint Enabled

The checkpoint has been enabled since 2 May 2023 in the pre-boarding control area on the first floor of the Jorge Chávez International Airport.

Seeking more information on this change in Peru? Contact our team of tax experts.

Refer to this page about tax rules in different countries if you’d like to learn more.

In July 2023, the French authorities postponed the implementation timeline. A new timeline will be announced with the adoption of the finance law for 2024.

When your organisation trades cross-border, regular changes to the regulatory landscape are a given. Whether those changes are brand-new requirements in a country where you do business or the evolution of existing legislation, you must be ahead of the developments to remain compliant.

With global tax authorities continually making progress with their digitization strategies, the e-invoicing revolution continues at speed.

In this quarter’s instalment of our VAT Snapshot webinar, Kelly Muniz and Enis Gencer from Sovos’ Regulatory Analysis and Design team, will look in detail at anticipated changes in countries with emerging digital strategies and discuss updates to some of the more established regimes.

They will cover:

Join our 30-minute update on 13 July for the latest news, and for an opportunity to put your questions to our speakers.

Register today

The Ledger of Economic Operations (Libro Registro de Operaciones Económicas), also known as LROE, is a main compliance element of the Batuz tax control system. This system is under implementation in the province of Bizkaia, located in the autonomous Basque community in Spain.

Taxpayers under the Batuz mandate must comply with both TicketBAI and LROE obligations. While TicketBAI applies to invoice issuance, LROE rules require taxpayers to electronically record and report data on income, expenses and other fiscally relevant information to the tax authority in a structured format.

Regardless of size or business volume, individuals engaged in economic activities and organizations must meet LROE requirements if subject to Bizkaia regulations on Personal Income Tax, Corporate Tax or Non-Resident Income Tax for permanent establishments. The rule will come into effect on 1 January 2024 and includes taxpayers currently subject to Bizkaia’s SII (Immediate Supply of Information) mandate.

What is LROE reporting?

LROE is the electronic ledger where taxpayers must document several economic activities and report such financial information to the tax authority. Individuals engaged in economic activities report this information via model 140, while companies use model 240.

For compliance with LROE, taxpayers must record and transmit their sales, purchases and other financial data in a structured XML format according to legal technical specifications. Taxpayers can send the data in the ledger either through webservices or manually uploaded via the portal provided by the Bizkaia Tax Authority.

The LROE structure

The structure of LROE information for companies and non-resident taxpayers with permanent establishment (model 240) is comprised of the following:

  1. Chapter of invoices issued
  2. Chapter of invoices received
  3. Chapter of investment goods
  4. Chapter of certain intracommunity operations
  5. Chapter of other information with tax significance
  6. Chapter of accounting movements

Certain chapters also contain subchapters. The chapter of issued invoices, for example, has a subchapter of issued invoices with guarantor software which requires transmitting data from invoices generated using TicketBAI.

In the case of Bizkaia, as taxpayers do not need to submit the TicketBAI XML (generated with the invoice) directly to the tax authority, they will send this data via the LROE subchapter in a specific TicketBAI field.

Batuz LROE submission deadlines

The deadline to submit the LROE files to the tax authority varies according to the type of taxpayer under the obligation.

The general deadline is quarterly. Taxpayers must report the data from when the transaction is carried out until 25 April, 25 July, 25 October, or 25 January – depending on the specific quarter.

The deadline for companies under the Bizkaia SII obligation to submit LROE records is four days from the operation’s completion, in line with the general SII deadline. The SII obligation will be considered fulfilled by submission of the LROE.

Penalties for non-compliance

Failure to comply with the requirement to keep and submit LROE records electronically will result in a monetary fine. The proportionally calculated penalty is 0.5 percent of the transaction amount the taxpayer failed to report, with a quarterly minimum of 600 EUR and a maximum of 12,000 EUR.

What’s next for compliant taxpayers?

By using the TicketBAI invoicing system and reporting the LROE, taxpayers will provide information to the tax authority so that it can fulfil the third element of the Batuz tax control system.

The third element of Batuz entails the preparation of pre-filled VAT draft returns and Corporate and Personal Income declarations, which will be available for taxpayers in Bizkaia from 2024 forward.

Need more information about Batuz LROE or tax in Bizkaia? Contact our team of experts today.

For an overview about other VAT-related requirements in Spain read this comprehensive page about VAT compliance in Spain.

Significant inflation increases have impacted most of the world’s economies, with the UK still above 10% in 2023. This increase means a reduction in the purchasing power of consumers. Together with increases in the cost of raw materials, this has created uncertainty regarding growth of entire industrial departments and reduced profit margins for companies.

The above is the perfect environment for an increase in the value of ‘safe-haven’ assets, such as houses, gold and works of art and antiques.

VAT implications for art

When we think about fine paintings, elegant furniture or statues, these can be valuable financially and generally increase in value over time.

However, investing in art may have certain VAT implications and, in the near future, it is one of the areas included as part of:

Reduced VAT rates for art in Europe

Following Brexit, France’s art market has increased, with a 7% global market share and $4.7bn in total sales in 2021.

One of the key factors of France’s success is the favourable reduced VAT rate of 5.5% for works of art.

Italy has a reduced VAT rate of 10% for art under certain conditions, and in the UK, the rate is 5%.

Along with general VAT rates rules, several existing derogations allow certain EU Member States to apply lower rates. Specific geographical features, social reasons for the benefit of the final consumer, or general interest justify these lower rates.

This creates a complicated map of VAT rates for operators to navigate.

What will happen in 2025?

There are two significant VAT changes due in 2025 that could impact the art sector:

Simplification of VAT reporting and supporting documentation

Second-hand goods supplied under the margin schemes, works of art, collectors’ items and antiques will be subject to distance selling rules as of 1 January 2025. These rules make these goods subject to VAT in the Member State of arrival.

If works of art or antiques are not transported or dispatched, or if the transport starts and ends in the same Member State, the supply will be subject to VAT in the place where the customer is established, has their permanent address or usually resides.

This extension of the single VAT registration under the One Stop Shop (OSS) scheme will allow a company to register for VAT uniquely in one EU Member State and report their B2C supplies in quarterly VAT Returns

Harmonization of VAT rates

The EU Directive 2022/542 of 5 April 2022 (that amends previous Directives 2006/112/EC and EU 2020/285), on rates of value added tax, aims to “safeguard the functioning of the internal market and avoid distortions of competition“. The Directive will enter into force on 1 January 2025.

This will require the application of the standard VAT rate to art. This potential change has already raised some concerns in the art market in France.

Italy views this change as an opportunity, with Undersecretary for Culture Vittorio Sgarbi saying that Italy intends to implement the EU directive that reduces VAT on the import of works of art from 10% to 5%.

The changes are ongoing and we will keep you updated on developments to art VAT rates across Europe as they unfold.

 

Need to discuss reduced VAT rates for art in Europe? Speak to our team of tax experts about how the upcoming changes could affect your business.

After a very long few years, we are finally seeing the return of in-person events and experiencing steady growth, especially as summer arrives. However, the industry has adapted to the new normal by utilizing technologies to create engaging virtual experiences.

The demand for events is increasing, whether in-person or online, and companies need to understand the VAT implications.

In this webinar, our VAT experts will cover the essential points your business needs to consider when planning events:

You can help drive the session by telling us which VAT exemptions you want to discuss.

Register here. 

5 Questions to Ask Yourself

Important NoteThe Finance Law for 2024 is presently in draft form and remains subject to ongoing modifications prior to adoption. Our blog, France: B2B E-Invoicing Mandate Postponed, is promptly updated whenever there are changes to the rollout of the French mandate .

 

Tax compliance in France is already complicated. New e-invoicing and e-reporting regulations being introduced by the DGFIP will mean companies doing business in the French Republic face some of the most onerous compliance obligations of all VAT jurisdictions. 

One significant change for many businesses will be the need to use Partner Dematerialization Platforms, also known as PDPs. The role of a PDP is highly specialised. Indeed, strict legal requirements and technical specifications must be met to become a registered PDP. 

The timeline affecting all businesses is clear. However, depending on your industry, you may need to rely on a PDP to ensure you’re fully compliant with the new requirements. Key industries include: 

Companies that need to use a PDP to achieve compliance with the French mandate face an additional, critical decision in what is already a complex new process to navigate. The need for a PDP raises the stakes, making it crucial to have dependable answers to the following: 

We’ve created a rundown of key questions to consider when choosing a PDP. 

1. Can your PDP cope with the growing compliance obligations of these new e-invoicing processes?

In addition to the existing requirement for B2G invoices (Public Procurement), the French Mandate reform will require B2B invoices to be exchanged electronically. As each B2B e-invoice is progressed, its status will shift. There are 14 status possibilities that need to be communicated between trading parties. Of these 14, 4 must also be automatically reported to the tax authority platform. The result will be a huge amount of additional data flowing in multiple directions. 

Additionally, the transaction details of B2B cross-border sales and purchases – excluding non-EU imports of goods – and B2C sales and payment data for Services Sales must be reported electronically to the tax authority. 

Meeting these processing and capacity demands will be a significant undertaking for solution providers. For context, 100 million B2G e-invoices are processed annually. With the addition of B2B e-invoicing to the French mandate, this number will now be in the billions. 

Why does this matter? 

You want to be able to trust that your PDP can cope with increased capacity and processing needs as well as evolving compliance requirements. You want to set yourself up for success for France as well as to deal with the growing obligations across Europe and beyond. 

 

2. The only constant is change – is your PDP equipped to handle France’s e-invoicing regulations as these evolve?

The French Mandate is part of a global trend towards tax digitization. E-invoicing mandates are constantly changing, being modified and updated. 

Take Italy, for example. Since January 2019, the e-invoicing mandate has been revised over 40 times. 

The French tax authority has already released four versions of the upcoming French Mandate  specifications and these will continue to evolve. Will your chosen software solution be robust enough to handle these changes so they don’t negatively impact your business? By asking the right questions, you may find that some aspiring PDPs, who also happen to be existing e-invoicing providers, are out of their depth. 

On top of this, there’s the EU-wide VAT in the Digital Age initiative and the changes it will bring. Your future PDP must have the bandwidth and agility to keep up with the inevitability of these future developments. You will also need to consider whether this PDP can take care of your compliance needs beyond France too. 

Trust is everything. A seasoned partner with experience navigating and solutioning for diverse e-invoicing obligations is important for your business. As government interest in business data grows, it’s essential to avoid blind spots, often created by complex supply chains, across multiple countries, within and beyond the EU. You’ll need a holistic view of your data that’s broader than e-invoicing and CTCs (continuous transaction controls). Think SAF-T and the other domestic obligations you face, alongside compliance challenges like VAT determination and periodic reporting. 

If you’re also doing business beyond France, these need your attention too. 

 

3. Are you aware of the total impact not meeting increasingly strict compliance requirements can have?

Let’s be clear. Despite what you may have heard about France’s e-invoicing mandate, this is not more of the same. 

Yes, electronic invoice requirements used to be relatively manageable. They needed to be readable and unalterable, providing clear proof of the original supplier’s identity. 

The scheme that will be introduced with France’s mandate complicates matters, adding requirements for: 

Failure to meet the exact stipulations of the reform will result in invalid invoices. 

Without legally valid invoices, not just VAT collection and VAT recovery are jeopardised: This would impact your company revenues and your trading partners, creating cash flow and profitability risks. 

Make no mistake, the commercial and reputational impact of not meeting these minimum requirements are even more significant than the potential penalties. 

  

4. Are you 100% confident of e-invoicing continuity?

French companies may be used to correcting e-invoice errors at a later date, but soon that will no longer be an option. The mandate ushers in continuous transaction controls, so any data or syntax errors will be glaring. If problems arise with e-invoicing, it won’t be possible to revert to paper or PDFs producing a significant cash flow risk for suppliers. E-invoices must be correct and compliant first time, every time. 

Reliance on an experienced and knowledgeable PDP for e-invoicing and associated compliance obligations doesn’t just join the dots in your data. It makes good business sense. 

  

5. Network size will no longer matter – is your would-be PDP saying otherwise?

For traditional e-invoicing, a large business network has been a supply chain advantage. A large network allows any one business to connect with a multitude of suppliers and buyers that choose to automate billing and invoice payments. 

However, the interoperability requirements of the upcoming mandate erode the power of network size. Every supplier and buyer will need to connect through France’s e-invoicing system (Portail public de facturation or PPF) either directly, or indirectly through a PDP. Giving you more freedom when selecting the right PDP for your business. 

While each registered PDP is required to cover both inbound and outbound invoice flows, they’re not required to cover all 36 specific use cases mentioned in the official documentation so far. Each use case needs an adapted treatment, which creates complexity that PDPs must address. 

It’s important to ask any PDP you’re considering about their plans to address these use cases and any future ones that could arise as requirements evolve. 

 Looking for a PDP you can genuinely trust to take care of the complex obligations you face due to France’s upcoming e-invoice mandate?

Our experts remain close to the requirements of the French Mandate. Especially as these evolve. Make it easy for yourself; connect with us.

Speak to us about our future-proof tax compliance solution, for the French Mandate and beyond, or download our deep dive guide on preparing for France’s mandatory continuous transaction controls.

Argentina has recently expanded its perception VAT (Value Added Tax) collection regime to ensure efficient tax administration. It has included selling food and other products for human consumption, beverages, personal hygiene, and cleaning items under its scope.

The Argentinian Federal Administration of Public Revenue (AFIP) established this through Resolution No. 5329/2023 in early February 2023.

The new resolution aims to further expand the regime known as “Régimen de Percepción del Impuesto al Valor Agregado” to the categories related to food and other products for human consumption, beverages, personal hygiene, and cleaning items.

Taxpayers who issue invoices concerning these provisions must ensure compliance with the document data requirements, used as evidence of the collection for the final VAT calculation. This will be further discussed in this article.

Scope of the VAT Collection Regime

The VAT Collection Regime in Argentina is a scheme by which the seller, designated as “Collection Agent”, charges the buyer an amount additional to the sale price. As a result, the supplier will charge the fee on top of the purchase value, which includes the price and the VAT.

This new regime obliges VAT-taxable persons to act as collection agents when selling food products for human consumption, beverages, personal hygiene and cleaning items. A few exceptions include meats, fruits and bread made exclusively from wheat flour, among others. Taxable people registered for VAT purposes will also be subject to this regime when acquiring said products.

Applicable rates

 The collection regime will only apply when each transaction amount exceeds ARS 3000.

The fee amount is determined by applying 3% to the net price of the operation resulting from the invoice or equivalent document.

This percentage will be 1.50% in the case of operations taxed with a rate equivalent to 50% of the general VAT tax rate.

Reporting and invoices as proof of perception

The information and payment of the perceptions carried out under this regime will be reported through the Withholding Control System (SICORE), using code 602.

The resolution also establishes that the only valid document to prove the payment of the perceptions will be the invoice or equivalent document (issued under the current invoicing regulations). The document will record the amount received in a discriminated manner and with express mention of this regime.

Those taxable persons using “Fiscal Controllers” documents of “New Technology” to comply with the provisions of the preceding paragraph must use the section “Other Taxes” on the document.

 Implementation date

The collection regime will be applicable for taxable events perfected as of 1 April 2023. As a result, sellers of food and other products for human consumption, beverages, personal hygiene and cleaning items will charge the buyer an additional 3% or 1.5% as appropriate on the sale price according to the applicable fee.

Need to ensure VAT compliance in Argentina? Get in touch with our tax experts.