Vat News - February 2018
EU Member States
The Swedish Tax authority published a Guidance to clarify the VAT framework of supplies of electricity, gas and water made by a landlord to its tenant, which under certain conditions may also benefit from the VAT exemption applied to the lease of property.
The Italian Tax Authorities announced, notably, the following changes:
- The deadline for the communication of data on invoices related to the second semester of 2017 has been postponed to 6 April 2018.
- Same deadline applies to the communication of additions, to the optional electronic filing of data on invoices issued and received and to the communication of corrections regarding data from the first semester of 2017.
- For summary invoices of less than EUR 300, the communication of data can relate to the summary invoice.
The Greek tax authority published a Circular stating that taxpayers are required to file 2018 Intrastat reports for intra-community transactions of goods, notably when:
- in 2017 the respective arrivals and dispatches exceeded the 2018 thresholds; or
- during 2018, the correspondent arrivals and dispatches of goods exceeds the thresholds.
The Cypriot tax administration provided clarifications regarding the concept of economic activities for holding companies and the deductible VAT, targeting in specific the right to deduct VAT of expenses incurred related with the management of subsidiaries.
Moreover, regarding the determination of the direct or indirect participation in the subsidiaries management, no criteria was provided and the tax authorities mentioned that it needs to be determined on a case-by-case analysis. For these purposes may be used as indicators, for example, the existence of common directors or board minutes showing the process of decision-making.
The Swedish tax administration published a Guidance clarifying who is liable to bear proof with respect to the place of supply of services.
The Tax and Customs control plan, recently published in the Spanish Official Gazette, emphasizes a strategy to further tighten the control on certain VAT schemes, notably:
- On VAT frauds within intra-EU operations (in particular in the automotive industry);
- Registrations of Intra-community operators; and
- Importations from Asia of textiles and consumer goods.
Effective as from 1st January 2018, the threshold to qualify as small taxpayers for VAT purposes is PLN 5 176 million (EUR 1.2 million) of annual turnover, including VAT, and, in particular to agents or commissionaires, is PLN 194 000 (EUR 45 000).
The Italian tax authorities recently published Resolution No. 5/E with clarifications regarding the obligation to submit a guarantee when certain listed goods are removed from a VAT warehouse.
The Finnish tax administration published an amended guidance on the VAT liability of real estate, further highlighting the following measures:
- Introduction of new time allocation rules for the leasing of immovable property;
- Including a new definition of real estate as to comply with the VAT definition of property in the EU;
- Clarification on the concept of storage services subject to the general VAT rate; and
- Clarifications on the requirements to be within the concept of joint office rentals, to which should be applied the VAT exemption.
The Cypriot Tax administration has issued two Circulars clarifying the application of VAT on the sale of non-developed building land and in the leasing/renting operations on commercial immovable property, considering the implementation of the amendment to the VAT Law in this regard, effective since 2nd January 2018.
The Bulgarian Supreme Administrative Court recently ruled that a compulsory VAT de-registration was correct on the grounds that the tax officers determined that in a tax audit:
1. The representatives of the company cannot be found at the provided address for correspondence, after three attempts; and
2. The accounting documents requested in the tax audit were not provided within the established deadline.
The Court also concluded that it was irrelevant that the company’s representatives corresponded with the tax inspector during the tax audit by email.
The Bulgarian Supreme Administrative Court recently ruled that input VAT deduction regarding additional VAT assessed by the tax authorities for non-reported intra-Community acquisitions, should not be refused on the grounds that:
1. There is sufficient evidence that the intra-community acquisition took place (e.g. the supplier has reported an intra-community supply);
2. The Bulgarian company self-assessed the VAT, issued and reported it in a special document (protocol); and
3. There was no attempt to conceal this operation by the recipient. In fact, in this case the invoices were available in the accounts of the company.
The Bulgarian Supreme Administrative Court held that Member States can introduce procedures so that entities are able to deduct the input VAT resultant from purchases before the VAT registration. According to the Bulgarian VAT Act the companies may submit a list of the assets that were available at the date of the VAT registration to the National Revenue Agency within 45 days of the VAT registration.
In light of the above, and considering in the case at hand the taxable person failed by 1 day to submit the mentioned list within the established deadline, the Court confirmed that the input VAT incurred before the VAT registration was not deductible.
The HMRC recently released Indirect Taxes Regulations concerning the new tax regime (Disclosure of Avoidance Schemes for VAT and Other Indirect Taxes), effective as from 1st January 2018
As of 2018, it is expected that the Spanish tax authorities start applying the foreseen penalties for failures complying the SII obligations.
The Romanian tax authorities have announced the split payment system applies only to taxable persons:
- With VAT liabilities above 15 000 RON for large taxpayers, 10 000 RON for medium-sized and 5 000 RON for other taxpayers; and
- Under an insolvency procedure.
Non-resident companies registered for VAT purposes, even when not qualifying nor having opted to apply the system must still be careful when making payments to their suppliers regarding invoices with Romanian VAT.
In case the supplier applies the system, the VAT amount must be wired to the VAT account and the net amount to the supplier’s bank account. A daily penalty of 0.06% of the incorrect amount wired to the supplier may be imposed.
The import reverse charge mechanism initially introduced only for goods listed in Annex C of the VAT Code, will now be applicable to all goods, as from 1st March 2018.
The filing deadline for the communication of invoices data for companies reporting invoices related to the 2nd Quarter of 2018 or to the 1st Semester of 2018 (if opted for semester basis) was postponed to 30/09/2018. Moreover, the obligation is abolished from 1 January 2019.
In addition, the deadline for the report of the VAT calculation related to the 2nd Quarter of 2018 was also postponed to 30 September 2018.
Recently published Circular letter clarified the application of the new deadlines for VAT deduction and registration of invoices, notably that the deadline for VAT deduction only starts when, cumulatively, the tax point occurred and the taxpayer received a valid invoice. Therefore, the right to VAT deduction must be exercised the latest in the annual VAT return of the year in which both conditions were fulfilled.
The status of clients may be checked by suppliers on the lists available in the websites: – Index of Public Administrations for public bodies and administrations; and – Ministry of Economy and Finance for other companies.
The German tax authorities have announced that the annual VAT return filing period will be extended to 31 July of the following year. Moreover, when the taxable person is advised by a tax adviser the filling deadline will be the 28th of February of the second following year to the period of report. Changes applicable to the reporting period 2018.
The transitional arrangements regarding the VAT treatment of consignment stocks supply were extended until 1st January 2019.
The Bulgarian Supreme Administrative Court held that entities VAT registered under the special regime for intra-Community acquisitions may not deduct the input VAT of such operations. In addition, the Court confirmed that the VAT deduction was correctly refused in the specific case, since the company had not followed the procedure established in the VAT act to correct unreported purchase invoices from previous periods.
Effective as of 1st January 2018, the monthly VAT returns, purchases and sales ledgers and VIES returns must be submitted electronically.
The European Commission published on 30 January 2018 an official Notice determining that subject to any transactional agreement that may still take place, when the withdrawal date of the United Kingdom from the European Union becomes effective, the EU rules concerning indirect taxation and Customs will cease to apply to the UK. All formalities of a 3rd country Customs purposes will need to be fulfilled by the United Kingdom and several adjustments to the VAT policy will be required (e.g. different VAT refund rules; mandatory VAT registration for UK businesses in EU Member States to apply the MOSS scheme).
European Commission has proposed some VAT changes in order to favor the flexibility and SME’s growth, notably:
- Possibility to apply two separate reduced rates, between 5% and the standard rate decided by the Member State;
- one exemption from VAT (or 'zero rate');
- one reduced rate set at between 0% and the reduced rates;
- Current list of products and services will be abolished and replaced by a new list to which the standard rate would always be applied.
- Simplification measures for small businesses (€2 million revenue threshold);
- The possibility to exclude VAT exempt small businesses from obligations relating to identification, invoicing, accounting or returns;
- VAT exemption for companies operating in more than one Member state (turnover threshold of €100,000).
The EU-Norwegian VAT cooperation agreement has been signed on 6th February 2018, in an attempt to combat VAT fraud and to assist each other in the recovery of VAT claims.
The mandatory Standard Audit File for Tax reporting has been postponed until 1st January 2020.
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