Pan European VAT update Deloitte Global Tax Center (Europe) - 11 January 2019
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Pan European VAT update Deloitte Global Tax Center (Europe) 11 January 2019 Olivier Hody, Partner Donato Raponi, Senior Advisor EU Affairs Bruno Roelands, Senior Director Karen Truyers, Senior Manager Sandeep Shinde, Manager
Agenda
• Introduction
• Global VAT updates
• EU VAT developments
• VAT rates
• Compliance 2.0: Real-time reporting, SAF-T, split payment, e-invoicing, Making Tax Digital
• Other compliance updates
• Conclusion
2
Global VAT updates
Gulf Cooperation Council states (GCC)
VAT Implementation progress timeline
All GCC countries to
implement VAT by 2019?
GCC VAT
Agreement
signed by all
six Member
States in June
2016
2016
2017 2018
2019 2020 2021
UAE & KSA Oman: Sep 2019 (indicative)
commit to Qatar: no official announcement yet
Kuwait: 2021?
go live on 1
January
2018
1 January 2018 1 January 2019
UAE & KSA Bahrain
4
Gulf Cooperation Council states (GCC)
Bahrain – compliance highlights
Bahrain
• Go-live: 1 January 2019 • VAT regulations: English
version now available Link
• VAT rate:5%
• VAT returns frequency:
• Mandatory VAT registration
monthly or quarterly
application to be submitted
depending on the size of
by:
business
BHD > 5 000 000 : 20 Dec 18
• Late submission of the return
BHD > 500 000 : 20 June 19
or late payment: 5% to 25%
BHD > 37 500: 20 Dec 2019
of the VAT which should have
• Voluntary VAT registration: been declared or paid
BHD > 18 750
• Late VAT registration
• Non-residents VAT registration penalties: up to BHD 10 000
threshold: no minimum
amount / threshold applies
Intra-GCC transactions are still considered
as imports/exports
Deloitte Middle
East Tax Handbook
5
Gulf Cooperation Council states (GCC)
UAE and KSA – Into the second year of VAT compliance
UAE KSA
• Post-implementation VAT • Final wave of VAT
review (Link) registrations: 20 Dec 2018
• New bi-annual filing frequency
from SAR 375.000 < SAR
for certain businesses (small
1.000.000
businesses and real estate)
• Penalties for late VAT
• Regularization: VAT211 can be
registration: up to SAR 10 000
submitted in Arabic only
• VAT compliance highlights:
• Guidance on input VAT
- OTP/MFA to access the
deduction / apportionment
website
(Link)
- Official VAT compliance
• Late filing/payment penalties guidelines (Link)
enforced: AED 1000 per
• Late filing/payment penalties
offence for late filing and 2%,
enforced: 5-25% VAT due
subject to a max. 300% of the
outstanding VAT • VAT number search database
(Link)
• VAT number search database
(Link)
Intra-GCC transactions are still considered
as imports/exports
Deloitte Middle
East Tax Handbook
6
Russia
Recent updates
• VAT rate change:
o The standard VAT rate increased from 18% to 20% effective January 2019 (Link)
• New VAT registration obligation for non-residents:
o Until the end of 2018, foreign companies supplying B2B e-services to Russian
established customers could avail of the local reverse charge mechanism and
therefore there was no obligation to register for VAT in Russia
o From January 2019, foreign companies supplying B2B e-services to Russian
established customers are not able to apply the local reverse charge mechanism
anymore and therefore would be obliged to register for VAT, and account for the
VAT via the periodical VAT returns
o The VAT rate for B2C and B2B e-services also increased from 15.25% to 16.67%
(of the VAT inclusive value) effective January 2019
o Further information: Link
7EU VAT Developments
EU VAT developments
Commission and Council updates
Digital
Definitive Service
VAT Tax
E-com: Regime
New VAT
incl CTP and OSS
obligations for
Marketplaces &
payment VAT rates
providers reform
SME
simplification
rules
2019
Upgrade of
MOSS for
Generalised
TBE services 2020
R/C and VAT
VAT Split payment Quick fixes
1.Call-off stock
applied to Vouchers 2.Chain transactions 2021
e-publications Directive 3.Transport allocation
4.VAT number E-com:
OSS for
distance
E-com sales
Non-EU:
LVCR, customs
simpl and OSS 9EU VAT developments
Interesting CJEU cases
10EU VAT developments
Interesting CJEU cases
11VAT rates
VAT rates
Average VAT standard rate remains stable in the EU
source: The EU Taxation Trends report 2018
• In June 2018, the EU Council has adopted 15% as the minimum standard rate (on a 13
permanent basis)VAT rates
Recent and expected changes
The Netherlands
• The reduced VAT rate increased from 6% to 9% on 1 January 2019
Canary Islands
• The general IGIC rate decreased from 7% to 6,5% on 1 January 2019
Greece
• Special VAT status abolishment for the remaining 5 islands (Lesbos, Chios, Samos, Kos,
and Leros) is further postponed from January 2019 to July 2019
Ireland
• The 9% reduced VAT rate is maintained in 2019, despite initial plans to abolish it
Croatia
• The standard VAT rate to be decreased from 25% to 24% from 1 January 2020 - subject
to further approval from the Parliament
Italy
• The VAT rates applicable in 2018 (i.e. standard rate 22%, reduced rate 10%) will also
continue to apply in 2019, despite initial plans to increase the VAT rates end of 2018
• Subject to further approval from the Parliament:
o Reduced VAT rate may increase from 10% to 13% on 1 January 2020
o Standard VAT rate: Increase from 22% to 25,2% on 1 January 2020 and to 26,5% on 1 January 2021
14VAT Compliance 2.O
Compliance 2.O
Global landscape
16Real Time VAT reporting - Spain
Suministro Inmediato de Información (SII)
Extension to Canary Islands in 2019
Extended to IGIC from
New obligations on January 2019
transactions recording
Electronic VAT Reporting System (SII) Dates of implementation
entails the electronic supply, through the
Spanish/IGIC Tax Authorities on-line Entry intro force since July 2017.
platform, of billing registries which are Mandatory for monthly taxpayer who are:
part of the VAT ledgers. (i) registered in the Monthly VAT Refund
Register, (ii) registered under VAT Grouping
Regime, or (iii) transactions performed
during last year exceeded EUR 6.010.121,04.
Extended to 8 days
for IGIC in the first semester of 2019. Key Optional for taxpayers who voluntary want to
Afterwards, reverts to 4 working days enroll the system, by submitting the
issues
corresponding census form.
Deadline to submit the information Same threshold for
Canary Islands
Issued invoices: 4 working days from its
issuance Ways of submission
Received invoices: 4 working days from its On going basis through a “web service” from
accounting. Always, before the 16th day of the Spanish/IGIC Tax Authorities on-line
the following month from the accrual date. platform.
Following returns are not be required post SII
Imports: 4 working days from the date in implementation: Taxpayers with few operations could report
which the accounting document (in which
Annual Spanish return (form 390) the information through a “web form”.
the VAT quota is indicated) was registered.
Always, before the 16th of the following Spanish ASPL return (form 347) Following returns are not be required
month from the accrual date.
Spanish VAT books for entities in REDEME (form 340) post SII implementation:
Saturdays, Sundays and national holidays
are excluded from counting. Change in the statutory date:
• IGIC Annual return (form 425)
Monthly Spanish VAT return (form 303 ) – due date • IGIC ASPL return (form 415)
extended 30th day following the end of the reporting • VAT books for entities in REDEME
period (form 340)
Change in the statutory date:
17
IGIC VAT return (form 417)Real time reporting
Hungary
•Since 1 July 2018
•All taxpayers with a VAT •Immediately ~ real time
registration in Hungary (within 24 hours requirement has been
•B2B transactions above removed)
the threshold of HUF •Without any human intervention
100000 (VAT amount)
•Upload file in XML format
•B2C transaction are out of Technical (new version released)
scope Scope
details •
•
Unique identification number – to
be maintained in the ERP system
•LSPL threshold has been reduced •Penalties up to HUF 500 000 per invoice
from HUF 1 million to HUF 100 000 Penalties & •In practice, HU tax authorities have
•Local Sales Listing return is no
longer required in certain
Impact further recently started performing
reconciliations between the LPL and real
circumstances guidance time data - raising questions on the
•Unique identification number is not mismatches and irregularities. Penalties
required to be mentioned on the have been limited so far
invoice (as previously proposed) • New technical guidelines for 2019 (Link)
•
1865M box 6 and 1865A-01-05 box 107 are not required
to be completed in the periodical VAT return
• System outage for more than 48 hours:
• Online Invoicing ystemhttps://onlineszamla.nav.gov.hu)
• Manual reporting
18SAF-T
Recent updates
Poland
• Since July 2018, all taxpayers are subject to a full on-demand SAF-T
• As of July 2019, traditional VAT returns might be abolished and replaced by an enhanced
monthly SAF-T (JPK_VDEK) file.
Proposed guidelines:
o Scope : all taxpayers registered for VAT in Poland
o Abolition of a VAT return and related annexes: VAT-7, VAT-27, VAT-ZZ, VAT-ZT, VAT-ZD
o JPK_VDEK (monthly SAF-T) would capture information currently required in the
traditional VAT return, including the carry forward, pro-rata adjustments and also VAT
ledgers
o Draft data requirements of the JPK_VDEK is expected to be published by the authorities
in February 2019
o Penalties up to PLN 500 for each irregularity/mismatch/error/incorrect/incomplete
reporting
19SAF-T
Recent updates
Norway
• What?
o The full SAF-T audit package in Norway will include:
- General ledger data level including customer and supplier breakdown, along with
relevant master data
- Standardized account numbers as per the Norwegian chart of accounts
- Standardized fixed tax codes
• When?
o 1 January 2020, on-demand
o Implementation in 3 waves (data requirements)
• Scope?
o All companies which are currently liable to maintain book-keeping information
electronically (in accordance with the Norwegian book-keeping legislation)
o Some specific exemptions apply (e.g. VoES companies)SAF-T updates
Norway
January 2020 (wave 1)
Version 1: All postings, incl. G/L, customers, suppliers and VAT account;
A/R (balances, customer master data, etc.); A/P (balances, customer master
data, etc.)
TBC (Wave 2)
Version 2: Detailed invoice information and source documents, etc.
TBC (Wave 3)
• Version 3: Movement during period of inventories and non-current assets, etc.
21Split payment
Recent updates
Romania
• EU Commission requested Romania to end VAT split payment mechanism
- Letter of Formal Notice sent in November 2018 (Link)
Poland
• Split payment is currently optional since July 2018
• Split payment could become mandatory in the course of 2019 for certain fraud-prone
industry sectors such as telecom
United Kingdom
• Public consultation (Link) (29 June 2018) and a Response document (Link) published on 7
November 2018
• Working Group (Link)has been setup to investigate the feasibility of the split payments
• Go-live date: proposed implementation date is not yet announced
• Scope:
• Non-EU businesses who are liable to account for VAT on sales to UK consumers.
• Overseas e-commerce businesses
• Further information: Link
22E-invoicing via government platform
Italy
• Established
•transas
companies
only
• The Interchange system (SDI)
• B2B and B2C XML / Fattura PA format
Transmission •
transactions Scope of e-invoices
• Effective January 2019
• Spesometro return has been abolished
and replaced by a new return from January
2019 Impact Proposed • Grace period for late e-invoicing
simplifications
• Paper invoices can be requested by foreign • Extended timing for issuance e-
established companies VAT registered in invoices
Italy
• Simplifications for accounting of
• Virtual stamp duty is applicable for all e- invoices received/issued
invoices issued after 1 January 2019 :
- quarterly
- first payment (Q1 2019) and payment is
due by 20th day following the end of the
reference quarter(20 April 2019)
- direct debit possible or via F24 form
23E-invoicing via government platform
Portugal
Go-live:
• Wave 1: 18 April 2019
(Portuguese central/state
public institutes/entities)
• Wave 2: 18 April 2020
(remaining non-central/public
entities)
(proposed)
• Established & non- • UBL2.1
•transas
established companies
Scope
Transmission • eSPap
of e-invoices ISO/IEC 19845:2015
• B2G transactions only
Further Proposed Until 17 April 2020 suppliers may still
“ESPAP” issue invoices without complying
• guidelines simplifications with the e-invoicing rules (this
(Service Shared Centre for
Portuguese Public Entities) deadline is extended to 31 December
2020 for micro and small companies)
Link
24E-invoicing via government platform
Greece and France
Greece
• Introduction of the mandatory e-invoicing (B2G):
o Proposed go-live dates:
Wave 1: 18 April 2019 (Greek central/state entities or authorities)
Wave 2: 18 April 2020 (remaining non-central public entities)
• Introduction of the mandatory e-invoicing (B2B):
o The proposed go-live date has not been announced
France
• Mandatory B2G invoicing (Chorus Pro)
o 1 January 2017 -> for large companies (more than 5000 employees) and public
entities
o 1 January 2018 -> for intermediate companies (from 250 to 5000 employees)
o 1 January 2019 -> for medium and small companies (from 10 to 250 employees)
o 1 January 2020 -> for very small companies (less than 10 employees)
25Making Tax Digital
MTDfV
26Making Tax Digital
MTDfV digital submission
Pilot project ongoing
Exclusions:
• Taxpayers involved in cross border transactions
• Taxpayers who received a surcharge in the last 2 years
• Taxpayers who are recently registered and never submitted a VAT return yet
Go-live for VAT can be extended by 6 months (to Oct 2019) for:
• Trusts Prior approval/notification
letter from HMRC required!
• ‘Not for profit’ organisations that are not set up as a company
• Annual accounting scheme users
• Those public sector entities required to provide additional information on their VAT return (such as
government departments and NHS Trusts)
• Local authorities
• Public corporations
• Traders based overseas
• Those required to make payments on account
• VAT divisions and VAT groups
27Other compliance updates
Other compliance updates
Reverse charge
Croatia
• Local reverse charge applicable to non-established VAT registered taxpayers:
abolished from 1 January 2019. Therefore VAT should charged in respect of these
supplies
• VAT reverse charge scope limitation on import of machinery or equipment: reverse
charge on imports only applicable where the import value is higher than HRK 1
million and used exclusively for internal use (i.e. not as stock in trade)
• Extension of local reverse charge mechanism to supply of concrete steel, iron and
related products from 1 January 2019
United Kingdom
• Reverse charge on construction industries will be introduced
• Go-live date: Oct 2019Other compliance updates
Overview
Spain
Luxembourg
Italy
Croatia
Hungary Netherlands
EstoniaOther compliance updates
New obligations, forms, e-filing mechanism
Croatia, Italy
• New compliance obligations from January 2019:
o Croatia:
- New obligation: “Overview of incoming transactions” (Form U-RA)
- Abolished : Form INO PPO
o Italy: “Communication of cross-border transactions”
Canary Islands, Luxembourg, Netherlands
• New VAT return form January 2019
Hungary, Estonia
• New electronic submission platform:
o Hungary: Business Gate is mandatory for established taxpayers from January 2019
o Estonia: Nationality/residency card is mandatory for accessing the e-filing portal
(officially extended from January 2019 to Spring 2019)Other compliance updates
Intrastat
Belgium, Portugal, Ireland and Hungary
• Two additional fields introduced for dispatches intrastat
o Country of origin
o VAT number of the business partner
• Go-live date:
o January 2019 (Belgium and Portugal)
o January 2020 (Ireland and Hungary)
Estonia, Hungary, Austria
• Estonia: new eStat portal since January 2019
• Hungary: new e-filing portal since January 2019
• Austria: new e-filing portal from 18 February 2019
2019 commodity codes
• LinkOther compliance updates
VAT registrations
Switzerland
• (Distance) sales of low value goods
• VAT amount: CHF 5, annual threshold CHF 100 000
France
• Only one tax representative can be appointed for non-established companies from January
2019Brexit
Brexit
Guidance for no deal
Exports
• Distance selling will no longer apply to UK businesses selling goods to EU consumers.
• No requirement to complete EC sales lists or Intrastat (also applies for imports).
EU VAT refund system
• UK businesses will no longer be able to use the EU VAT refund system and will need to use
the 13th Directive mechanism
ESS
• Businesses will no longer be able to use the UK’s MOSS portal.
• UK registered businesses will need to register for the non-union MOSS scheme in another
EU Member State to continue using MOSS
• Suppliers of ESS into the UK using MOSS in another EU Member State at present will need
to register for UK VAT
35Brexit
Guidance for no deal
VAT Numbers
• UK VAT numbers will no longer be checkable on VIES. The government has committed to
developing a replacement system
Imports
• The current rules for imports from non-EU countries will also apply to imports from the EU
• Import VAT accounting via the VAT return will be introduced
• For parcels valued up to and including £135, a technology-based solution will allow VAT to
be collected from the overseas business selling the goods into the UK. Overseas businesses
will charge VAT at the point of purchase and must register with a new HMRC digital service
to account for the VAT due
• For parcels worth more than £135 VAT will continue to be collected from UK recipients in
line with current procedures
36Upcoming Webinar
Brexit
Title:
Brexit – tax readiness
When:
11 January, 1 pm (UK time)
Registration:
Link
37Conclusion
Conclusion
39Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee (“DTTL”), its network of member firms, and their related entities. DTTL and each of its member firms are legally separate and independent entities. DTTL (also referred to as “Deloitte Global”) does not provide services to clients. Please see www.deloitte.com/about for a more detailed description of DTTL and its member firms. Deloitte provides audit, tax and legal, consulting, and financial advisory services to public and private clients spanning multiple industries. With a globally connected network of member firms in more than 150 countries, Deloitte brings world-class capabilities and high-quality service to clients, delivering the insights they need to address their most complex business challenges. Deloitte has in the region of 225,000 professionals, all committed to becoming the standard of excellence. This publication contains general information only, and none of Deloitte Touche Tohmatsu Limited, its member firms, or their related entities (collectively, the “Deloitte Network”) is, by means of this publication, rendering professional advice or services. Before making any decision or taking any action that may affect your finances or your business, you should consult a qualified professional adviser. No entity in the Deloitte Network shall be responsible for any loss whatsoever sustained by any person who relies on this publication. © 2019 Deloitte Belgium
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