Welcome to the January 2022 issue of BDO’s Indirect Tax News. We start off the year with a robust line-up of developments and insights from around the globe.
The two feature articles spotlight the EU: one article looks at a tumultuous period in EU-U.S. trading relations and the way forward and the second feature examines the agreement in the EU to update and modernise the reduced VAT rates rules.
Shifting the focus to Asia, we provide an update on the Authorised Economic Operator scheme in India, the mandatory tax credit system that will apply in Japan. for consumption tax purposes as from October 2023 and new rules that will apply to private consumers in Singapore as. from 2023 that will require such consumers to pay GST on imported goods valued at SGD 400 or below.
Courts have been active, with the CJEU confirming in a Hungarian case that VAT is levied only on consideration actually received. India’s. Supreme Court has issued a decision that prevents a taxpayer from requesting a sizeable GST refund despite the fact that the taxpayer’s defence to incorrect filing was. due to glitches in the Indian GST portal.
Changes are made to the VAT rates in the Bahamas, Bahrain, Indonesia and Laos, Ecuador’s president has been granted authority to reduce the VAT rate for persons providing specific tourism services, guidance is provided on the VAT treatment of mobile phones and airtime packages in the UAE and Sri Lanka’s tax authorities have clarified the targeted VAT exemptions for information technology and certain services. The effective date of Poland’s new VAT. grouping rules has been postponed to 1 July 2022.
In other news, Armenia, Cambodia and Ukraine have joined the growing list of countries that are extending their VAT regimes to apply to nonresident suppliers of digital services, and the Nigerian tax authorities have clarified the application of such rules in Nigeria. Other countries continue to tinker with their indirect. tax rules, such as:
- Extending the tour operators margin scheme to VAT-registered businesses as. recipients in Austria.
- Italy’s tax authorities issuing a ruling on the right to deduct VAT due on imports.
- Allowing VAT-registered entrepreneurs in the Netherlands to deduct VAT on restaurant and. catering expenses in certain situations and. updating official policy on the interpretation of the “specific state supervision” requirement to qualify as a collective investment fund to bring it in line with a broader interpretation of the requirement by the Dutch Supreme Court.
- Introducing electronic invoicing in Spain, as. well as a tax on non-reusable plastic.
In this edition:
- Argentina: Federal online gambling tax levied as indirect tax on betting
- Armenia: Nonresident providers of electronic services subject to VAT
- Austria: Tour Operators Margin Scheme extended to B2B supplies
- Ecuador: President granted authority to reduce the VAT rate for the tourism sector
- European Union:
- Reduced VAT rate rules updated
- Practical impact of the new definition of “exporter” for customs purposes
- CJEU rules Hungary must allow pharmaceutical company to deduct VAT on sales
- Supreme Court bars taxpayer from GST refund claim
- AEO program enhances supply chain security, facilitates trade
- Indonesia: VAT rate increase and other changes to VAT rules
- The fall and partial rise of US-EU trading relations
- Indirect tax bytes
- Tax authorities issue ruling on right to deduct VAT due on imports
- Japan: Update on new JCT invoicing system and commencement of registration procedure
- VAT on restaurant and catering expenses may be deduced when costs are passed on
- VAT exemption for management of collective investment funds expanded
- Guidance issued on simplified VAT compliance regime for nonresident suppliers
- Singapore: GST to be levied on imported low-value goods
- Spain approves legislation on mandatory e-invoicing requirements
- Tax on non-reusable plastic expected to be passed
- Sri Lanka: VAT concessions granted for IT and enabled services
- United Arab Emirates: FTA issues guidance on input tax relating to mobile phones
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