23 Jul

Coronavirus Update 23rd July– Emergency VAT Measures

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Following the lifting of the COVID-19 lockdown, national governments are currently trying to revive their economies. To help boost consumer spending, in particular in those most-hit by COVID-19 pandemic industries like tourism and hospitality sectors, some countries have recently decided to cut their VAT rates. Others continue to address administrative disruptions by the postponement of new measures or burdens.

EU

With a view to addressing severe disruptions created by the COVID-19 pandemic, on the 24th of June 2020 the EU Council agreed on the 6-month deferral for introducing the e-Commerce VAT package.

In light of the above, the new rules for e-Commerce in the EU will apply only from 1 July 2021.

In a nutshell, the e-Commerce VAT package will apply the principle of taxation of B2C supplies of cross-border goods and services at destination/place of consumption. The corresponding pan-EU VAT compliance obligations will be facilitated by the OSS (One-Stop-Shop) special scheme, which in essence is the extension of the currently operating MOSS (Mini-One-Stop-Shop) scheme.

Austria

Between 1 July – 31 December 202 0 the Austrian authorities https://www.bmf.gv.at/rechtsnews.html will temporarily cut VAT rate of 5% will apply on food and drinks in catering establishments, accommodation services, visits to museums, cinemas or music events, publications as well as e-books.

Belgium

Belgium has halved its VAT rate to restaurant and catering services (excluding alcoholic beverages) from 12% to 6% from the date of reopening of the hotel, restaurant and catering industry until 31 December 2020.

Germany

As of 1st of July 2020 the new standard VAT rate in Germany has been decreased from 19% to 16% and the reduced VAT rate of 7% was cut to 5%.

The reduced rates will apply only between 1 July – 31 December 2020.

https://www.bundesfinanzministerium.de/Content/DE/Standardartikel/Themen/Steuern/2020-06-25-FAQ_Corona_Umsatzsteuer.html 

Poland

The Polish Ministry of Finance has decided to further postpone the introduction of the new SAF-T file upload that will be combined with the VAT return (‘JPK_VAT’) from the previously announced go-live date of 1 July 2020 onto 1 October 2020 for all taxpayers.

UK

For a temporary period between 15 July 2020 and 12 January 2021 the UK will apply a reduced 5% VAT rate to certain supplies related to hospitality, hotel accommodation as well as admission to certain attractions. https://www.gov.uk/government/news/rishis-plan-for-jobs-will-help-britain-bounce-back

Saudi Arabia

On the other pole of governmental approach to the post-pandemic recovery Saudi Arabia has tripled its VAT rate from the previous 5% to 15% with a view to tackling the economic difficulties caused by the COVID-19 pandemic.

The ‘Transitional Provisions Guidelines’ related to the VAT rate increase published by the General Authority of Zakat & Tax can be found under the following link:

https://gazt.gov.sa/en/HelpCenter/guidelines/Documents/Transitional%20Provisions%20Guidelines%20of%20VAT%20Rate%20Increase%20to%2015.pdf

 

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This story was originally posted on VAT Life, Quipsound’s quarterly newsletter in association with Essentia Global Services. Click here to see the story and more on VAT Life.

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