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.

Brexit: The transitional period will end in 100 days

1 Background On 1 February 2020, the United Kingdom (UK) politically ceased to be a member of the EU. In order to mitigate the exit for the economies of both the EU and the UK, a transitional period expiring on 31 December 2020 was agreed. For the duration of the transitional period, the existing customs and VAT rules between the EU and the UK continue to apply. The UK's withdrawal from the EU has therefore not yet triggered any legal changes (see KMLZ VAT Newsletter 02/2020). The deadline for a possible extension of the transitional period beyond 31 December 2020 has expired. Legal changes in the movement of goods between the EU and the UK will therefore become unavoidable as from 1 January 2021. 2 Possible conclusion of a free trade agreement Since March 2020, the EU and the UK have been engaged in intensive negotiations on a free trade agreement, which is intended to shape future economic and legal relations. So far, however, not even the foundations of such an agreement have been...

EUROPE: Online trading with the UK after Brexit

The global economy is increasingly shaped by digital innovations. There is a clear shift from traditional forms of consumer retail to online shops and platforms. The impact of the coronavirus and government responses such as lock-downs and quarantines, have reinforced this trend. The United Kingdom (UK) has one of the most highly-developed e-commerce markets in the world, and within the European Union (EU) the UK has the highest turnover related to online sales. The UK is therefore an interesting market for e-commerce companies. After Brexit, the UK will still offer a massive opportunity for your e-commerce activities. However, the UK will no longer be part of the EU. Although the terms under which the UK will leave are as yet uncertain, it is a fact that December 31, 2020, will be the last day that the UK is part of the EU. Below, we will highlight the possible changes and adjustments needed when preparing your e-commerce business for Brexit, if your business sells to consumers in...

NETHERLANDS: No temporary shortening of the VAT refund period

State Secretary of Finance is not in favor of a temporary shortening of the refund period in these special times, partly because a special arrangement for postponement of payment of VAT also applies to entrepreneurs. He writes this in response to parliamentary questions (VVD). This VAT refund scheme pertains to an irrecoverable claim, whereby the entrepreneur has already paid the VAT included in that claim, while he will not receive it from the customer. The purchaser entrepreneur in turn does not pay the claim including the VAT, but has deducted the unpaid VAT. If a customer does not pay, a liquidity problem can arise for the supplying entrepreneur. Entrepreneurs can therefore receive a refund of VAT included in a claim in any case if payment has not been made after one year. If the refund has been granted and the claim is subsequently paid, the entrepreneur must make a correction. The downside of the refund is that the purchasing entrepreneur must repay the amount of VAT included...

Netherland Entrepreneurs – Avoid paying VAT in every import. Apply for a permit before BREXIT

Pay VAT in one go by applying for an Article 23 OB If, after Brexit, an entrepreneur does not want to pay VAT at customs on goods purchased in the UK, he will need an Article 23 OB from 1 January 2021. That is the subject of a letter sent by the tax authorities in September to entrepreneurs who are eligible for a permit and have not yet applied for it. This letter explains how an entrepreneur applies for an 'Article 23 permit'. In that case, he does not have to pay VAT to Customs, but declares the VAT to be paid on his import in one go in his normal VAT declaration. Without a permit under Article 23, the entrepreneur must declare and pay VAT to Customs every time he imports goods. A transition period will apply from January 31, 2020, after the UK has left the EU on January 31. This transition period ends on December 31, 2020. The entrepreneur can use the license for the import of goods from the UK after the end of the transition period, ie from 1 January 2021. Apply for the permit...

USA: 2020 sales tax changes midyear update: Sales tax revenue edition

Sales Tax update & Digital Service Taxes on the Rise Despite strong online sales, COVID-19 continues to stress state and local budgets. In the coming months and years, government officials may need to find new sources of revenue. As one of the largest sources of both state and local revenue, sales tax is a natural target. Expect states to tighten enforcement of economic nexus and marketplace facilitator laws, which require out-of-state sellers to collect and remit sales tax. States could also look to impose new taxes on sales of digital goods and streaming services. Stricter enforcement of economic nexus and marketplace facilitator laws Economic nexus and marketplace facilitator laws are proving to be an invaluable source of revenue during the pandemic. According to the Texas Comptroller, “ecommerce collections have risen sharply” because “more remote vendors and online marketplaces were required to collect and remit Texas sales tax following the U.S. Supreme Court’s Wayfair...

Avoid the Brexit import VAT trap

After 31 December 2020, anyone selling goods to consumers or businesses between the UK and EU will face import VAT, potential tariff charges and customs declarations for the first time. You can choose to ignore these and push the bill and paperwork to your customers. But this will be a nasty surprise for them, as well as result in long delivery delays. This all means no repeat business. Most savvy customers will know in advance if you try this, and will refuse to accept the responsibility. Again, more lost business. With a little planning now, you can avoid this terrible customer experience, side-step the import VAT payments and ensure your goods still clear through to your UK or EU customers as they do today. Pick the right INCOTERMS – switch to Delivered Duty Paid If you take over the customs, VAT obligations and liabilities (see below), you can agree this with your customer via the Incoterms (International Commercial Terms). These are global pre-defined commercial terms for...

Extra Brexit VAT registrations to avoid fines and keep trading?

To avoid major tax fines, most UK and EU sellers will have to apply for additional VAT numbers to continue selling after 31 December 2020 – the end of the Brexit transition period. They will lose one of their most important VAT simplifications for cross-border selling – distance selling thresholds.   What are the distance selling thresholds? Sellers with customers around the EU should charge the VAT of their customers’ country. However, to help smaller e-sellers, the EU operates a distance selling threshold simplification. Sellers only have to VAT register in another EU state when the exceed the annual distance selling threshold. Until they reach this sales threshold, they can sell to each EU state charging and reporting the VAT via their home-country VAT registration. Today, these are: Country Distances selling annual threshold Germany, the Netherlands, Luxembourg €100,000 UK (until 31 Dec 2020) £70,000 All other EU states €35,000 or local currency equivalent     Why...

EUROPE: Online trading with the UK after Brexit

The global economy is increasingly shaped by digital innovations. There is a clear shift from traditional forms of consumer retail to online shops and platforms. The impact of the coronavirus and government responses such as lock-downs and quarantines, have reinforced...

read more

Avoid the Brexit import VAT trap

After 31 December 2020, anyone selling goods to consumers or businesses between the UK and EU will face import VAT, potential tariff charges and customs declarations for the first time. You can choose to ignore these and push the bill and paperwork to your customers....

read more

New registration form for foreign entrepreneurs

The Tax and Customs Administration has published a new registration form with which foreign entrepreneurs can register for sales tax, corporate tax and / or payroll taxes. The new form is called ' Registration of a company abroad '. The Tax and Customs Administration...

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