COVID-19: VAT Developments worldwide

UNITED KINGDOM

In July 2020 the UK introduced a reduced VAT rate of 5% for Hospitality – Accommodation and Attractions in order to support businesses that had been impacted by COVID-19. In October 2021 this rate is set to increase to 12.5% and from 1st April 2022 it will go back to its original rate of 20%

HMRC released a brief explaining the rules for the VAT treatment of coronavirus (COVID-19) testing services. You can view this brief by clicking here.

ITALY

Italy released a clarification on the application of zero-rated VAT for services that are directly related to COVID-19. You can view the letter here which explains how to determine if a service is related to COVID-19.

THAILAND

Thailand is extending the reduced VAT rate of 7% for another two years. This rate will be applicable for sales of goods, service provisions and import transactions and it is valid from October 1st, 2021 to September 30th, 2023.

Also, an extension of tax filing and tax return deadlines will be granted to specific tax returns. This is valid for submission via the Revenue Department’s e-filing system and it involves many types of taxes as well as VAT.

Finally a waiver or reduction of VAT and specific business tax filing penalties that are payable from September to October 2021. This is applicable if taxes are filed within 3 months after the extended due date.

BELGIUM

A circular has been issued on the extension of the temporary COVID-19 support measures regarding the reduction of VAT interest . These have been extended till September 30th, 2021.

VIETNAM

New proposal on tax for donor goods to prevent COVID-19. This proposal covers COVID-19 related goods imported even before this resolution takes place.

CZECH REPUBLIC

The Czech Republic has published a bulletin that extends the VAT relief exemption for specific masks and respirators related to COVID-19. This exemption is now extended for the period 1 September to 31st of October 2021.