Regulatory Analysis
On Oct 24, the Organization for Economic Co-operation and Development (OECD) released guidance on how countries can implement effective VAT collection systems for cross-border trade, particularly concerning digital/electronic supplies. The guidance, which is entitled, Mechanisms for the Effective Collection of VAT/GST, relates mostly to design options for effective VAT collection mechanisms and registration systems. […]
The Spain Ministry of Finance released the first report detailing business compliance with the new SII mandate. According to the report, the compliance rate is in excess of 90%, meaning that approximately 50,000 businesses are meeting the requirement of providing transactional details to the government on a near-real-time basis. In the last three months, more […]
On October 4, 2017, the European Commission published a set of proposals aimed at simplifying and modernizing the current VAT system. The "cornerstone" principles of the Commission's approach are: Combating VAT fraud and reducing the €150 billion VAT Gap Establishing a "One Stop Shop" for cross-border trade Consistently applying the "destination principle" for VAT […]
The Mexican President has issued a Decree by which taxpayers that were affected by the earthquake of September 19 in the municipalities of the states of Guerrero, Mexico, Morelos, Oaxaca, Puebla, Tlaxcala, as well as in Mexico City, will be allowed to pay the VAT due on transactions carried out during the months of September, […]
On October 1, 2017, the Catalonian region of Spain held a referendum on independence. While the Spanish Supreme Court declared the vote unconstitutional and Spain does not recognize the result as legally binding, the vote was held and the results were that an overwhelming majority of Catalan voters expressed a clear desire to become an […]
The Dutch government has released its Tax Plan for 2018, which includes three provisions relating to the VAT law. First is the abolition of the special scheme for agriculture. The government's explanatory memo states that this plan is being abolished because the modernization of farming has led agricultural businesses to more closely resemble other businesses, thus obviating […]
On September 14, 2017 the Italian Ministry of Economy and Finance published the updated lists of companies that qualify for the revised split payment system. The updated lists cover changes to two categories of companies that are subject to the split payment system in Italy: Companies lawfully controlled by the Presidency of the Council of Ministers and […]
The Croatian Ministry of Finance has issued clarifying guidance related to the VAT exemptions available to non-profit entities under Article 39(1)(m) of the Croatian VAT Act. Section 1(m) of Article 39 states that "services closely related to sport or physical education performed by non-profit legal persons, to persons engaged in sport or participating in physical […]
Last week, Her Royal Majesty’s Revenue and Customs (HMRC) announced the opening of a consultation period regarding the current legislation for the “Making Tax Digital” initiative, which is slated to take effect from April 2019. In its announcement, HMRC provided links to summaries regarding the current content of related legislation, and alerted consumers that they have […]
The European Commission has proposed Poland be authorized to assess a reverse charge on hard drives, such as solid-state drives and hard disk drives, which would impose VAT liability on the purchaser of such items. Article 199(a) of Council Directive 2006/112/EC (“the EU VAT Directive”) currently allows for Member States to impose a reverse charge […]
In its most recent framework for a budget agreement, the Belgian government has proposed giving taxpayers the option to collect VAT on the letting of immovable property, beginning January 1, 2018. This would allow taxpayers to deduct any input VAT incurred on operations such as construction that are directly related to the letting of the […]
On August 8, 2017, the Bundesministerium der Finanzen (BMF) published an up-to-date list of NATO Headquarters to which deliveries are tax exempt under Article 4 paragraph 7 of the German VAT Act.
The United Kingdom is contesting a charge that "continuous negligence" by its customs agency has resulted in 1.987 billion Euros in lost duties on Chinese merchandise. The Office de Lutte Anti-Fraude (OLAF) conducted a two-year investigation into the matter, and recommended earlier this year that the UK pay the money into the EU budget itself as […]
On August 11, 2017, the European Commission proposed that Romania be allowed to extend its current derogation on VAT threshold for small business registration until December 31, 2020. Romania currently sets its threshold at EUR 65 000 pursuant to a derogation that expires at the end of 2017. The Commission's proposal would extend this derogation […]
The Romanian Ministry of Finance released a draft ordinance introducing a split-payment mechanism for VAT payments on August 4. A revised version of the order was released on August 18th. The order requires that all VAT registered persons must open a dedicated VAT account for the collection and payment of VAT on supplies and purchases […]
On August 11, the Organisation for Economic Co-operation and Development published comments to its newly-released 2017 Model Tax Convention. The Convention contains a proposed new paragraph stating registration for VAT has no bearing on the question of whether an organisation has a "permanent establishment" within a jurisdiction; this clarification is especially timely now that a number of […]
Her Majesty's Revenue and Customs (HMRC) has published the latest version of VAT Notice 700, which is a guide for a variety of topics related to VAT. This latest publication simplifies numerous sections of the notice for easier understanding and clarity, and provides additional guidance on topics such as single and mixed supplies of goods, as well […]
In 2016, the European Commission released several proposals for new Directives amending Council Directive 2006/112/EC ("the EU VAT Directive"). The Commission’s first proposal would to introduce an intra-EU VAT threshold and simplified compliance obligations for the Mini-One-Stop Ship (MOSS) scheme for e-services, with the aim of removing VAT barriers to online businesses, particularly start-ups and small-to-medium […]