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.

Proposed legislation for taxation of digital services

A bill (HB No. 7425) pending in the lower house would address the taxation of digital services and transactions. The current value added tax (VAT) law does not specifically mention online or electronic transactions. The bill would introduce amendments imposing VAT at a rate of 12% on sales by digital service providers (whether resident or non-resident) of goods that are digital or electronic in nature and on services electronically rendered in the Philippines.  Digital services Digital services would be defined as services delivered or subscribed over the internet or other electronic network, and that cannot be obtained without the use of information technology. This definition contemplates online licensing of software, webinars, search engine services, social networks, and the provision of digital content and information, among others. The bill would include the following in the definition of sales of services: The supply of advertising space and other services for the purpose of...

VAT refunds to overseas shoppers to go post-Brexit

The Treasury has signalled the government will end VAT refunds on purchases made by overseas visitors on 31 December, when the UK leaves the EU, despite claims from the travel and luxury goods sector that this will harm tourism Following a consultation on duty-free and tax-free goods carried by passengers, the Treasury has announced the VAT Retail Export Scheme (VAT RES) will not be extended to EU visitors after Brexit, and will be withdrawn for non-EU visitors in Great Britain. This means that overseas visitors will no longer be able to obtain a VAT refund on items they buy in GB and take home with them in their luggage. However, the Treasury says retailers will instead continue to be able to offer VAT-free shopping, consistent with international principles of taxation, to non-EU visitors who purchase items in store and have them sent direct to their overseas addresses. In its response to the consultation, the government acknowledged part of the problem with VAT RES is the concern...

Netflix, Uber or Spotify: Mexico proposes suspending foreign digital platforms that do not pay taxes.

The professor of communication and technological innovation Rubén Darío Vázquez warns that this could affect the final cost to consumers. Mexican government would be willing to block applications such as Netflix, Uber and Spotify in case these popular digital platforms refuse to pay taxes in the Latin American country, according to the latest national budget planning. The Executive raised the possibility of suspending the digital services of foreign companies that do not pay taxes in accordance with the provisions of the local treasury. Among the evasions considered, the Value Added Tax (VAT) and the lack of informative returns stand out. For the professor of communication and technological innovation Rubén Darío Vázquez, one of the main complaints of companies is that this regulation would raise, in addition to new tax burdens, "to deliver the tax data of the people who use these platforms." Thus, the expert remarks, the firms "will have to provide all the information of the users,...

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...

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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France Lowers Threshold For Tourist VAT Refunds

VAT refund in France: France has cut the amount that non-EU tourists must spend to claim back the VAT on their purchases. Previously, VAT refunds would be available for those spending more than EUR175. Under the change, VAT refunds will be available where a non-EU...

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CYPRUS: COVID-19 Measure Updates

COVID-19 VAT RELATED MEASURES Temporary deferral of VAT payments for certain businesses Temporary change of VAT reporting periods and due VAT payments for certain businesses Temporary reduction from 9% to 5% VAT rate for certain hospitality and travel services QUICK...

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