Our professionalized and specialized VAT team is always informed with the latest VAT updates and regulations from around the world. Here you will find all you need to know regarding VAT news and information.

Germany: Standard VAT rate reduced from 19 to 16 percent and reduced tax rate will drop from 7 to 5 percent between July 1 and Dec 31, 2020

In order to boost the economy after the corona pandemic, Germany has put together an economic package worth billions. On 3 June 2020, the German parliament proposed to temporarily reduce the VAT rates from 1 July 2020 until 31 December 2020.In order to boost the economy after the corona pandemic, Germany has put together an economic package worth billions. On 3 June 2020, the German parliament proposed to temporarily reduce the VAT rates from 1 July 2020 until 31 December 2020. Standard rate is to be reduced from 19% to 16%. Reduced rate is to be reduced from 7% to 5% The classification from the standard 19% rate to the reduced 7% VAT rate for catering food services was announced by government earlier in May.  The reduced rate will start 1 July 2020 and run until 1 July 2021. Take-away and delivered food is already liable to 7% VAT   

Mexico: A Latin American Internet Group asking to delay VAT on Digital Services implementation

As of 1 June 2020, Mexico will start imposing a 16% VAT rate on Digital Services provided by foreign suppliers. In this regards, the Internet Latin America Association (ALAI in Spanish), a group representing big Internet companies such as Amazon, Google, Facebook, Mercado Libre and much more, has issued a letter asking the Mexican government to delay the implementation of this measure due to a lack of clear rules. According to the letter, ALAI states that the pilot program carried on to try the new measures only include one business model which do not represent the whole digital sector. The group is worried that the new changes create excess charges for consumers and service providers and double taxation. The statement finishes by asking the Mexican authorities to delay the implementation of Digital Service taxes until 1 January 2021, a 5 months postponement. GVC will be taking a close look to this developments. If you need further information about VAT on Digital Services in Mexico...

Egypt announces mandatory e-invoicing

The Egyptian Ministry of Finance recently issued a decree on the mandatory issuance of electronic invoices in the country. The decree states that : Registered taxpayers must issue an electronic invoice containing the issuer’s electronic signature and a Unified Code for each good r service supplied – all of which should be authorised by the Head of the Tax Authority. The Egyptian initiative has all the ingredients of a strong mandate. Earlier information on the e-invoicing obligation reported that taxpayers are to provide all invoice-related information regarding their sale and purchase transactions along with their e-VAT returns. Failing to do so would be considered tax evasion by the tax authorities. Further details are still unknown at this point – what is clear is that the VAT invoices must be approved by the tax authority, which points in the direction of a clearance mandate. Once the tax authority finalises the requirements, they will be published in the official Egyptian...

Italy: No VAT rate increase in 2021

As a result of COVID-19, Italy will not increase the VAT/IVA rates as planned in 2021. The Italian Council Ministers approved a decree which includes, among other measures, a reversal in their decision to increase VAT rates as of 1 January 2021. Initially planned for 2020, the increased VAT rates in Italy were as follows: An increase in the standard rates from 22% to 25% on 1 January, with a further increase to 26.5% planned for 1 January 2022. An increase in the reduced VAT rate from 10% to 12% from 1 January 2021. This decision is based on measures taken to mitigate the effects of COVID-19 pandemic. As a result, VAT rates remain the same in Italy in 2021 and for the foreseeable future.   Source Credit - Accordance  Related services:

Mexico: Withholding 6% Value Added Tax

Updates regarding tax compliance in Mexico. During the current fiscal year, the Tax Administration Service published new regulatory criteria on the 6% withholding value added tax (VAT) for services provided through the criteria 46/IVA/N, published in the early version of an amendment to the Annex 7 of the Miscellaneous Tax Resolution (RMF) for 2020. The criteria are described as follows: 46/VAT/N Withholding of 6% on the value added tax referred in fraction IV of Article 1a-A of the VAT Federal Law Article 1o-A, fraction IV of the VAT federal law establishes which corporations are obliged to withhold the tax transferred to them, such as companies or natural persons with business activities who receive services through which they are made available to the contractor or a related party, personnel performing their duties on or outside the contractor’s premises or a related part therefore, whether or not they are under the direction, supervision, coordination or dependence of the...

Mexico: VAT Withholding Requirements for Digital Services

The Mexican Tax Administration (SAT) has issued a release on the initiation of regulations for withholding tax on payments for digital services provided by non-residents without an establishment in Mexico. The requirements will enter into force on 1 June 2020, with non-resident providers required to withhold VAT on payments received for digital services provided in Mexico. The release includes that non-resident providers of digital services in Mexico must electronically issue and send a voucher (in PDF format) that clearly indicates that a payment for digital services is subject to VAT, and the amount.   Source Credit - Orbitax   Related services:

Saudi Arabia Issues Guidelines on Transition to 15% VAT Rate

As previously reported, Saudi Arabia will increase its VAT rate from 5% to 15% with effect from 1 July 2020. For this purpose, the General Authority of Zakat and Tax (GAZT) has provided guidance on the transition rules that will be applied in relation to contracts and invoices for supplies made before and after the 1 July 2020. Given that the increase was initially announced on 11 May 2020, this is used as a reference date for the transition rules. With respect to contracts for continuous supplies, the rules differ depending on when the contract was entered into: Where a contract was entered into before 11 May 2020, the 5% rate may continue to apply on supplies made under the contract until the earlier of the date the contract expires or is renewed, or 30 June 2021. If the contract was entered into between 11 May and 30 June 2020, the 5% rate applies on supplies made up to 30 June 2020 and the 15% rate applies on the supplies made from 1 July 2020. With respect to invoices, similar...

Egypt announces mandatory e-invoicing

The Egyptian Ministry of Finance recently issued a decree on the mandatory issuance of electronic invoices in the country. The decree states that : Registered taxpayers must issue an electronic invoice containing the issuer’s electronic signature and a Unified Code...

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Italy: No VAT rate increase in 2021

As a result of COVID-19, Italy will not increase the VAT/IVA rates as planned in 2021. The Italian Council Ministers approved a decree which includes, among other measures, a reversal in their decision to increase VAT rates as of 1 January 2021. Initially planned for...

read more

HMRC updates on Simplified Import VAT Accounting

Due to the Coronavirus (COVID-19) pandemic, applications should be made by email and a supporting copy sent by post, until further notice. You need to complete and send the simplified accounting application form and the questionnaire (ODT, 42.7KB). HMRC will usually...

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