All the latest stories from the world of international and cross-border VAT.
In February 2017, we announced that Estonia had requested an authorisation to raise its VAT registration threshold from EUR 18,000 to EUR 40,000.
Following up to the request, the Council of the European Union has given the go ahead to Estonia’s government to increase its VAT registration threshold for small business to EUR 40,000 in turnover.
The French VAT legislation requires taxable persons that have the obligation to register for VAT but are neither established nor have a fixed establishment in the European Union to appoint a fiscal representative.
However, countries that have concluded mutual assistance agreements aimed at recovering tax claims with France are included on a “white list” meaning that taxable persons established in these countries are not required to appoint a fiscal representative should they be required to register for VAT in France.
During the presentation of its fiscal plan for 2018 – 2020, Iceland has announced its intention to reduce the standard VAT rate from 24% to 22,5% with effect from 1 January 2019.
The measure is part of a broader plan presented by the Minister of Finance and Economic Affairs aimed at boosting investments in infrastructure and simplifying the countries tax system.
After a publication from the Italian tax authorities on 26/03/2017, it has been now confirmed that a new quarterly VAT return (Comunicazione IVA trimestrale) must be submitted in 2017 with first deadline on 31/05/2017.
Everyone must submit this new return with the only difference that quarterly filers must submit only one form for the quarter, when monthly filers will have to submit three forms referring to each month of the quarter. This new return will include the following information:
The UK spring budget has seen the Chancellor announce new measures for tackling VAT avoidance and evasion, together with an increase in the registration and deregistration thresholds.
One of the measures is in regards to the removal of the use and enjoyment provisions for business to consumer mobile phone services. The rationale for this change is that it will resolve the inconsistency where UK VAT is applied to mobile phone use by UK residents when in the EU, but not when outside the EU. Instead, UK VAT will apply to all charges for the services. It will also ensure mobile phone companies cannot use the inconsistency to avoid UK VAT and bring UK VAT rules into line with the internationally agreed approach. Further details on this should be published shortly.
The Belgian Minister of Finance, Johan Van Overtveldt, has announced that taxpayers currently making quarterly prepayments for Value Added Tax (VAT) will no longer need to do so from 1 April 2017.
Instead, there will be a requirement for one prepayment for the 4th quarter due on 20th December which is equal to the VAT paid in the 3rd quarter.
The Luxembourg Parliament has introduced new rules relating to the penalties which can be imposed for errors in a VAT return. These are as follows:
At the request of the Estonian government, the European Commission is proposing to give Estonia authorisation to apply a higher VAT registration threshold for local small business.
The rise is expected to come into effect from the 1 January 2018 and will mean VAT registration is not required for businesses with a turnover of €40,000 or less. This represents an increase in the threshold from the current rate of €16,000.
Article 17 of the amended finance law for 2016 has given to the French tax authorities power to conduct audits of taxpayer claims for VAT credit refunds at their premises.
Formerly, the French Tax Authorities could initiate only two procedures: an accounts audit and a documents audit. It is hoped this new process will help reduce fraud.
Over the next five years, the amount of VAT recoverable on petrol costs will progressively be brought into line with the regime for diesel.
For passenger vehicle, the deductibility will be of 10% in 2017, 20% in 2018, 40% in 2019, 60% in 2020 and 80% in 2021. For utility vehicle, the deductibility will start in 2018 with 20% to reach 100% in 2022.