Tag Archives: VAT

Luxembourg: VAT rate increase as of 1 January 2015

In his recent “State of the Nation” speech Luxembourg’s Prime Minister, Jean-Claude Juncker announced that the standard VAT rate in Luxembourg will increase with effect from 1 January 2015 (i.e. from the date when the new VAT rules for B2C sales of eservices will become applicable in the EU). Mr. Juncker has explained, that this VAT rate increase should help Luxemburg to counterbalance the expected loss of the VAT revenues due to new VAT rules on eservices.

Current standard VAT rate in Luxembourg is 15%. Even though the new VAT rate has not been disclosed yet, we understand that the Luxembourg’s government intends to maintain the lowest standard VAT rate in the EU also after the proposed increase. This would mean that the new standard rate will have to be somewhere between 16% and 18%. Find out more

Netherlands: Reverse-charge for sale of certain IT hardware and mobile phone devices

From 1 April 2013, business involved in supplying large quantities of certain IT hardware and mobile devices (e.g. mobile phones, tablets, laptops, game consoles, integrated circuit devices…) in the Netherlands must no longer charge Dutch VAT on their invoices to other businesses.

From this date on, if the total value of any single local supply of these goods is EUR 10.000 or more, the “reverse-charge mechanism” will be applicable. This means that the purchaser has to self-account for VAT on the transaction in his own VAT return. If the business customer is entitled to full input VAT recovery, a simultaneous input VAT recovery can be made in the same VAT return, so that there is not VAT payment liability is attached to the transaction. Find out more

EU: Mini one stop shop 2015 – the basics

Today we will take a look at the basics of the new Mini One Stop Shop (“MOSS”) VAT registration scheme and compare the EU and non-EU MOSS schemes with their alternative – the “standard” local VAT registration in up to 28 EU countries.

As you are most probably aware companies selling telecom, broadcasting and eservices to B2C customers in the EU will have to charge VAT in the country of the customer and at that country’s VAT rate. This will mean 28 countries and 28 VAT rates (or 56 rates if ebooks and similar eservices will potentially become taxable at reduced VAT rate).

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South Africa plans to implement madatory VAT registration for foreign businesses selling digital products to SA clients

South African National Treasury has proposed that foreign businesses, which sell digital products to South African customers, be required to register for VAT purposes in South Africa.

The VAT implications of digital product sales, including books and music sold via the internet by suppliers who are neither resident nor established in South Africa, have caused uncertainties and resulted in VAT compliance risks for these foreign businesses.

For your convenience has therefore the National Treasury proposed in the 2013 Budget Review (which was released on 27 February 2013), that foreign businesses supplying ebooks, music and other digital goods and services in South Africa be required to register as VAT vendors.

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USA: Webcast – EU 2015 B2C VAT changes and what they mean for US based businesses

Please join PwC’s Value Added Tax Practice for a webcast on Thursday, March 14th from 12:00 to 1:00pm ET.

Webcast will focus on the challenges that sellers of electronically delivered content face when selling to customers in the European Union and elsewhere.

The European Union (EU) has long required EU established businesses to account for VAT, at the rate where the business is established, on sales of electronically supplied services (eservices), such as mobile applications, downloadable or cloud accessible games and music, and subscriptions to websites, to private individuals located in the EU. Find out more

EU: How to define the location of an ebiz customer?

In today’s article we will take a look at information the EU Commission suggests that should be collected and used to determine the location of the customer – buyer of eservices. We will also analyze the practicability of the various proposed location evidences and think about how easy they are obtained in practice.

As you are probably aware, at least as of 2015 every business supplying eservices to non-VAT registered customers in the EU will have to charge VAT in the country where its customer is located. In a number of cases this rule already applies (e.g. if the eservices are supplied by non-EU companies to EU customers or if they are supplied to Swiss, Norwegian, etc… customers).

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Featured: EU 2015 B2C VAT changes – it’s sooner than you think!

On 1 January 2015 the final phase of the so-called VAT package will come into force and will involve important changes in the VAT treatment of intra-EU business-to-consumer (‘B2C’) supplies in relation to telecommunications, broadcasting and electronic services.

From that moment on, all telecommunications, broadcasting and electronic services provided to non-taxable persons will be taxable at the place where the customer is established, has his permanent address or usually resides. Affected businesses will therefore be required to charge, report and pay local VAT in every Member State in which they have customers, which may result in multiple VAT-registrations throughout the EU.

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EU Commission refers France and Luxembourg to the European Court of Justice over reduced VAT rates on ebooks

As reported, France and Luxembourg have started to apply reduced and super reduced VAT rates to ebooks without obtaining an approval from the rest of EU. This gave them competitive edge over the rest of the EU countries, as companies which were selling ebooks to their EU B2C customers from those two countries could sell them at the lowest available VAT rates (3% for sales from Luxembourg and 5% for sales from France). This (in words of Commissioner Šemeta, responsible for taxation) “runs counter to the fundamental EU principle of fair tax competition.”

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