Czech Republic and Finland: VAT rates increasses now official

Some time ago, we have announced that Finland and Czech Republic are planning to increase their VAT rates on 1 January 2013. This has indeed come to fruition as reported; both countries have increased all their VAT rates by 1% as of today morning.

Some more info can be found here and here. Please remember, Cyprus also plans to increase its VAT rates soon.

P.S. and without being cynical in any way: We wish you all a happy and most successful 2013!

EU: B2C 2015 VAT changes – New proposal for an Implementing Regulation

On 18 December 2012, the Commission adopted the proposal for a Council Regulation amending the VAT Implementing Regulation (EU) No 282/2011 as regards the place of supply of services. It is the final proposal in a package of measures in view of the implementation of the new VAT taxation rules for B2C telecommunications, broadcasting and electronic services that will become effective as of 1st January 2015.

The proposed implementing measures relate to the identification and evidence of customer location and are needed to ensure a uniform application within the EU. It also includes a proposed deemed provision in case of intermediated delivery of electronic services.

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Cyprus: VAT rate increase on 14 January 2013

Cyprus is again increasing its VAT rates.

The standard VAT rate will increase from 17% to 18% for the period 14 January 2013 to 12 January 2014. From 13 January 2014 the standard VAT rate will increase again to 19%, at which point the 8% reduced rate also rises to 9%. The current reduced rates of 5% and 0% remain unchanged.

Original news can be found here.

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Serbia: Definition and scope of service

The Serbian tax administration has recently issued a new “rulebook” on electronically supplied services. It defines the scope and types of services that should be regarded as electronically supplied services for Serbian VAT purposes. These include for example the supply of software and related updates, supply and maintenance of websites, service in the field of distance learning etc

Even though the “rulebook” finally provides a definition of eservices, certain types of listed services could cause uncertainties in practice and might require further clarifications, e.g. the supply of pictures, text and information in electronic format; the supply of audio and video records etc.

Check here for some more details and contact information.

What does this mean for you?

It is a welcome movement that the Serbian legislation addresses the VAT implications of current issues, such as eservices. It would appear however, that the rules and definitions may differ from those in the EU. It is therefore highly recommended to analyze the nature of your business’s supplies in detail to see if they fall within the definitions of the “rulebook”.

France Proposed VAT rate increase in 2014

The French government announced tax rate changes as part of a planned tax relief for companies last week. The proposal intends to make the French companies more competitive on the international market, however in return the VAT rates will be increased.

According to the announcement the standard VAT rate would increase from the current 19.6% to 20%, while the reduced VAT rate would increase from 7% to 10%. Some good news, that the super-reduced VAT rate is proposed to decrease from 5.5% to 5%.

As per the information published the VAT rate changes will be effective from 1 January 2014.

What does this mean for you?

Any change in the VAT rates in France will affect businesses both as suppliers and as customers. Businesses VAT registered in France, doing or planning doing business in France should therefore keep abreast with the developments.

Cross-border ecommerce whithin the EU

Ordering goods per internet that are sent directly to your home has become increasingly popular these days. It’s easier, more convenient and you can do it while riding a bus or waiting for your dentist appointment. While you could already buy clothes from catalogues decades ago, you can even do your groceries shopping via your smart phone today. But what are the tax obstacles in this area for companies offering those services within the EU?

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Australia: Results of the Low Value Import Relief review

The final report of the Low Value Parcel Processing Taskforce (“the Taskforce”) was recently released by the Australian authorities.

In a previous report in 2011 the Productivity Commission found that the low value import exemption threshold for GST and duty on imported goods (currently set at AUD 1’000) was not the main factor affecting the international competitiveness of Australian retailers (this is a totally opposite conclusion than the one made by the EU – see here for more info) . The Productivity Commission advised that there could be grounds to reduce the low value import relief threshold, but it is not cost-effective to do so without streamlining the procedure of processing low value parcels.
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Will Switzerland implement reduced VAT rate for ebooks?

As discussed before, France and Luxemburg decided to apply the reduced VAT rate to ebooks, most likely also to attract publishing companies to their countries. As this treatment does not comply with the applicable EU rules, the EU Commission initiated the appropriate action against these two countries.

As Switzerland is not part of the EU, EU VAT rate restrictions do not apply. According to the Swiss Parliament’s website the “Bundesrat” is requested to consider the application of the reduced VAT rate to ebooks, as part of the ongoing review of the VAT legislation.

It appears that Swiss legislators would like to remove the distinction in VAT treatment which exists between paper books and ebooks.

What does this mean for you?

If you are involved in publishing or distributing ebooks, you should also monitor the Swiss ebooks and eservice developments. As you might be already aware you are required to register for VAT in Switzerland if your B2C sales to Swiss residents exceed CHF 100’000 in a single calendar year.

Asia: The physical side of ecommerce

Ecommerce in Asia is booming. China alone is forecast to grow to an over US $350 billion industry by 2016. While some markets may already be considered mature (Australia, for example), the growth of internet connectivity and consumer purchasing power cannot be ignored by either small-to-medium enterprises or multi-national corporations looking to reach new consumers.

Ultimately, e-commerce is likely to continue growing because it can more easily provide a wide variety of products at  lower prices and greater flexibility to customers, which in turn leads to an enhanced shopping experience.

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