+++ Croatia - VAT hike from 23% to 25% in March 2012 +++ France - announces 1.6% VAT TVA increase from 19.6% to 21.2% on 1 October 2012 +++ Belgium - EC Sales List despatches and arrivals reporting threshold cut +++ Barbados - IMF pushes for VAT rise +++ Switzerland - rejects a single VAT rate of 6.5% +++ Bulgaria - online VAT returns now compulsory +++ Gambia - to introduce VAT in 2013 +++ Denmark - cut in the threshold for reporting intra community despatches and arrivals EU - companies only due 'simple' reinterest on overpaid VAT +++ Sweden - small businesses must now submit full VAT returns +++ EU - issues further clarification of new 2015 one stop shop VAT compliance for electronic services +++ Sweden - EC Sales List reporting threshold for intra community supplies is dropped to SEK 500,000 +++ UK - Axa loses Denplan case as debtor collection on insurance is subject to European VAT +++ Switzerland - proposes hotel VAT exemption +++ UK - Jersey to raise stamp prices to compensate for loss of VAT low consignment loophole +++ Norway - electronic VAT returns now mandatory +++ Spain - denies the need for a further crisis VAT increase in 2012 +++ Hungary - refund of VAT credits has been extended +++ Norway - reduced VAT rate on food increased from 14% to 15% +++ China - exempts VAT on vegetables Jan 2012 +++ Ireland - Health Insurance Levy rates for policies have been increased. +++ India - new guidance on GST levied on insurance premiums +++ Germany - update on evidence for zero VAT rating of exports and intra community despatches +++ UK - new ESL quarterly reporting threshold of £35,000 +++ Cyprus - VAT rises 2% to 18% January 2012 +++ Czech Republic - proposes consolidating VAT rates at 19% in 2012 +++ Madeira - increase in VAT rate from 16% to 22% from 1 April 2012 +++ Luxembourg - new VAT rules on place of supply for transportation services +++ Czech - reduced VAT rises from 10% to 14% January 2012 +++ India - implementation of GST may not come till 2013 +++ Gambia - to introduce VAT in 2013 +++ France - delays increase in VAT from 5.5% to 7% on books till April 2012 +++ Channel Islands - to sue UK on withdrawal of VAT DVD and CD low value consignment relief +++ Lithuania - withdraws VAT cut on hotels +++ France - cuts VAT on ebooks January 2012 +++ Japan - to raise consumption tax from 5% to 10% in two stages +++ Greece - offers discounts on VAT liabilities settled by credit card instead of cash +++ Malta - VAT and IPT amnesty extended +++ Lithuania - drops VAT cut on newspapers and print +++ Italy - suppliers to non-resident companies may claim quarterly VAT refunds +++ Poland - childrens'clothing VAT rate rises from 8% to 23% following ECJ +++ Italy - changes tax point on services from date of cash received to date of completion of service +++ EU - issues new European VAT reform White Paper +++ Switzerland - stamp duty reform to leave tax on insurance premiums untouched +++ Ireland - captive insurers exempt from new government 2% premium tax levy +++ Romania - permits voluntary VAT deregistration at any point during year +++ Lebanon - confirms 2% VAT rise to 12% +++ Sweden - reverses double VAT on App's developers +++ Ireland - raises VAT on bread to 13.5 as well as standard rate to 23% +++ Italy - raises VAT again by 2% from 21% to 23% in Septermber 2012 +++ Portugal - votes for VAT hike on restaurants to 23% +++ UK - withdrawal of low-value consignment relief confirmed +++ Turkey - moves meat and poultry products from 8% reduced VAT rate to 1% rate +++ Fiji - VAT registration threshold has increased to FJ$ 100,000 +++ EU - targets VAT increases on company cars instead of income taxes +++ Germany - simplifies e-invoicing rules for VAT deductions +++ Ireland - confirms new 2% VAT rate rise to 23% from January 2012 +++ EU - refers Spain to ECJ on VAT rates +++ Ireland - confirms new lower tourist VAT rate to remain at 9% following standard rate hike news +++ Belgium - clarification of input VAT rules for company motor cars +++ EU - next round of proposals for European VAT reform due in new White Paper +++ UK - Low Value Consignment Relief will be scrapped from 1 April, 2012. +++ Ireland - confirms 2% VAT rise in 2012 +++ France - restaurant and renovations VAT rise from 5.5% to 7% as part of Nov 2011 austerity +++ China - Shanghai to pilot merger of VAT and Service Tax +++ Italy - recent VAT rise contributes to Euro inflation increase +++ Philippines - raised VAT reporting thresholds +++ Bulgaria - requested by EU to change laws on VAT refunds for non-resident traders +++ EU - pressure on Italy to ammend tax rules on imports in line with VAT Directive +++ Cyprus - requests EU permission to cut electricity VAT rate from 15% to 8% +++ EU - Parliament comments on European Commission VAT Green Paper +++ Turkey - increase in consumption taxes on drinks and vehicles +++ Italy – new Finance Act introduces measures to close dormant VAT numbers. +++ Croatia – electronic VAT invoices permitted with customer consent +++ Lithuania – VAT registration threshold increases to €45,000 per annum from 2012 +++ India – publishes a list of all services to be exempt from the proposed 2012 GST regime +++ Italy – reduced penalties for voluntary corrections of VAT returns +++ Portugal - raised VAT rates in Azores and Madeira +++ Malta - drops VAT rise on utilities +++ EU - plans VAT reforms to reduce fraud +++ Portugal - VAT increase with many goods from 13% VAT rate to standard 23% VAT rate +++ Dutch - VAT triangulation simplification changes +++ Norway - increases VAT on foodstuffs from 14% to 15% in 2012 +++ Iceland - requires non-resident traders to register for VAT on electronic supplies +++ Finland - 2012 budget levies 9% VAT on newspaper and journal subscriptions +++ EU - plans for single VAT rate for all 27 member states dropped +++ Spain and France - proposals for cut on VAT for e-books and digital publishing +++ Hungary - repealed VAT recovery rules as directed by European Court of Justice +++ Costa Rica - educational and medical services moved to 2% reduced rate +++ Singapore - new procedures to be adopted on GST compliance +++ Kenya - new VAT bill will levy tax on publishers +++ EU - new VAT rises contribute to increased European Union inflation +++ UK - to close Low Value Consignment Relief VAT relief loophole in Channel Islands +++ France - raise in insurance premium tax to 9% on health risks +++ Cyprus - VAT reduction on first time home buyers +++ Ireland - new 2% insurance levy Bill confirmed by Parliament +++ Taiwan and Belgium agree to reciprocal VAT refunds for companies +++ Greece - still reviewing VAT cut in 2012 +++ France - introduces new levy on hotel accommodation of 2% on top of 5.5% VAT +++ Hungary - announces 2% VAT hike to 27% in 2012 +++ Italy - confirms 1% VAT rise on 17 September 2011 +++ Japan - IMF pushes for Consumption Tax to rise to 15% from 5% to cut debt +++ Gulf States - evaluate 5% VAT introduction +++ Lithuanian - plans for reduced VAT on hotels and restaurants +++ Czech Republic - lower house of parliament backs VAT cut to 17.5% +++ Greek - unrest over 10% VAT increase on spend in cafes and restaurants +++ Jamaica - moves to slash GST to 12.5% +++ Australia - proposal to raise GST and withdraw insurance premium tax +++ Canada BC - HST to be replaced by PST and GST +++ Japan 5% consumption tax rise loses momentum +++ Cyprus 2% VAT hike may be delayed +++ Portugal increases VAT on electricity and natural gas +++ Germany - Tax Court rules that incomplete 13th Directive claim forms can be rejected +++ Greece - certain goods and services to be hiked to the standard rate from Sep 2011, more in Jan 2012 +++ India - GST rate to be between 16% and 20% when implemented in next financial year +++ Ireland - introduces new reduced rate of 9% for tourism industry from July 1st 2011 +++ China - starts process of taxing the turnover of online retailers traders +++ France - Changes to taxation of life insurance policies +++ Italy - IPT tax hike on motor policies +++ Finland - newspapers and journals are now subject to 9% reduced VAT rate +++ Netherlands - EC referal for breach of VAT on travel agents +++ Finland - drops plans for VAT and IPT increase from 23% +++ Netherlands - proposal to increase reduced VAT rate from 6% to 8% +++ Iran - increase in VAT rate to 4% +++ Ireland - cuts reduced VAT rate on tourism, construction and newspapers +++ EU - Ecofin delays insurance VAT exemption discussions again +++ Germany - extension to deadline for filing 2010 annual VAT returns to Dec 2011 +++ Ireland - potential new insurance premium tax to be charged on insurers +++ Portugal - escapes VAT rise for the moment with EU bail out; but goods on reduced rate to be revised +++ Ireland - pressure for VAT increase on basics +++ Italy - the Hunting Accident Victims Fund has risen to 4.7625% +++ St Lucia - plans to implement VAT regime in 2012 +++ Slovakia - opposition parties push for 1% VAT cut to 19% +++ EU - may act on Channel Islands VAT loophole despite recent UK budget change +++ France - rejects call for EU budget share of national VAT take +++ EU - finance ministers agree to permit reduced VAT rate on restaurant food +++ Sweden - to challenge restriction from EU on VAT on non-profit organisations +++ Germany - EU pushes to extend exemption for VAT to all cost sharing groups +++ Netherlands - closes VAT recovery portal for one week due to technical problems +++ UK - Bank of England estimates that 2011 VAT increase caused 1%-1.25% inflation increase +++ Australia - to recast GST split between States +++ Romania - plans to increase VAT registration threshold +++ India - reduced Central Excise Duty rises from 4% to 5% +++ Poland - introduces VAT reverse charge on sales of goods +++ Gulf States - IMF pushes for the implementation of VAT regime +++ UK - VAT registration threshold increases to £73,000 per annum +++ Singapore - rejects GST cut calls despite inflationary pressures +++ China - introduces two new indirect tax charges on foreign traders +++ Ireland - government proposes to decrease reduced VAT rate to 12% for two years +++ Euro countries to force through tax harmonisation and VAT simplification +++ UK - to close Jersey postal VAT loophole for internet retailers +++ Czech Republic - to merge reduced VAT rate into 20% standard rate +++ Australia - proposed simplification of non-resident GST registration requirements +++ France - new backing on VAT rise to subsidise lowering of employer taxes +++ Peru - pass VAT cut proposal for March 2011 +++ EU - halts carbon trading for VAT fraud fears +++ Finance Minister quashes rumour of VAT increase to subsidise salary tax cut +++ Pakistan - IMF pushes for reformed GST implementation within six months +++ New Zealand - rules out further GST rise following recent increase to 15% +++ UK - VAT on corporate jets due +++ Philippines - possible VAT increase in 18 months to fund income tax cut +++ Greece - no further VAT increases required as govt assures markets +++ Australia - calls to impose non-resident GST registrations on foreign internet retailers +++ Austria - new flight aviation tax introduced requiring a fiscal representative +++ Cyprus - accommodation 5% reduced rate scrapped +++ Czech Republic - proposal to combine 10% reduced VAT rate into 20% standard rate +++ Spain - onward relief importers must provide local and destination country VAT numbers +++ South Africa - rumours of a VAT increase from current 14% standard rate +++ Greece - retrospective 2011 VAT increase on certain services +++ Venezuela - new threatened VAT increase withdrawn +++ Italy - IPT compliance to be simplified in 2011 for Freedom of Services insurers +++ Russia - Finance Minister says 18% VAT rate will have to increase in 2011 +++ Canada - Quebec Sales Tax increases from 7.5% to 8.5% in 2011 +++ Italy - to introduce reverse charge on mobile phones from April 2011 +++ EU - maintains minimum VAT rate at 15% until end of 2015 +++ Germany - Aviation Tax from 1 January 2011 requires fiscal representative +++ Italy - Road Accident Victims Fund insurance tax levy to rise in 2011 +++ Sweden - proposes 12% reduced VAT on restaurant meals +++ France - may delay cut to 5.5% VAT on ebooks until 2012 +++ Bulgaria - promises two VAT cuts in 2011 and 2012 +++ Venezuela - potential 1% VAT rise to 13% in 2011 +++ Cyprus - introduces 5% VAT on foodstuffs +++ Spain - denies rumour of new VAT rate increase from 18% to 20% in 2011 +++ Israel - VAT rate of 16% not to fall to 15.5% in 2011 as planned +++ France - triple play telecom services VAT to rise from 5% to 19.6% +++ Barbados - VAT increase by 2.5% +++ EU - many countries have not implemented 2011 'Admission Services' rules for live events and conferences +++ Greece - fresh tax amnesty +++ Indonesia - VAT return updated +++ China - proposes to simplify Business Tax with VAT +++ EU - plans review of European VAT systems to deal with fraud and 'VAT gap' +++ Slovakia - approves postponed 2009 VAT reclaims deadline +++ EU - T-Mobile loses payments as separate VAT exempt service ECJ appeal +++ Malaysia - increases Service Tax from 5% to 6% in 2011 +++ Lithuania - to change hotels to reduced VAT rate of 9% from standard rate of 21% +++ Ireland - to raise VAT in 2013 and 2014 from the current 21% to 23% +++ Portugal - the facility to reclaim Stamp Duty, payable on insurance policies, incorrectly paid is being withdrawn +++ Ghana - plans to increase VAT registration threshold from GHS 10k to GHS 90k +++ EU - Germany, Italy and Austria granted reverse charge option on VAT fraud susceptible goods +++ Pakistan - the new GST rate has been dropped from 17% to 15% to broaden the tax base +++ Portugal - there are no changes to the reduced VAT rates with the January 2011 VAT rate increase to 23% +++ Ukraine - cuts VAT from 20% to 17% in 2014 +++ Latvia - 1% VAT rise to 22% in 2011 +++ Kyrgyzstan - simplified VAT reporting to be introduced +++ Luxembourg - foreign VAT reclaim processing will continue to experience severe delays into 2011 +++ UK - HM Treasury assures insurers that new EU VAT Directive for Financial Services is on track and no threat to VAT exemption +++ Poland - Bill to increase VAT by up to 25% by 2014 submitted +++ US - Finance Committee leaves potential VAT introduction off agenda +++ Croatia - plans to bring many goods into VAT net to meet Euro entry requirements +++ Netherlands - drops the requirement for an IPT fiscal representative from 2011 +++ Malta - VAT on hotel stays increases from 5% to 7% +++ France - rejects VAT cut on e-books +++ Jersey - to increase GST by 2% to 5% in June 2011 +++ Germany - to reform VAT rates in 2011 +++ EU - threatens VAT charge on outsourced insurance services, inc claims handling +++ Malaysia - Service Tax to increase +++ Sweden - proposals for tough restrictions on import VAT onward export relief +++ Ukraine - VAT rate to fall 3% to 17% by 2012 +++ EU VAT exemption on insurance outsourcing under threat +++ Netherlands - reduced VAT rate for property improvements +++ EU - ECJ ruling limits VAT recovery on third party payments +++ Netherlands - IPT rate rises 2.2% to 9.7% in 2011 +++ Bulgaria - to consolidate tourism VAT rates at 9% +++ Germany - proposals to withdraw many reduced VAT rates including on hotel accommodation +++ France - confirms new 19.6% VAT on triple play telecom services +++ Greece - government denies plan to increase VAT to 25% +++ EU - transfer of re/insurance contracts to be VAT exempt in new Directive +++ Portugal - 2nd VAT rise of 2% to 23% +++ New Zealand GST 2.5% rise to 15% from Oct 2010 +++ Thailand - 7% GST rate confirmed till 2012 +++ India - GST implementation may be delayed +++ Colombia - VAT services exported to non-residents confirmed as exempt +++ Puerto Rico - VAT to be introduced to replace sales tax +++ Romania - new VAT return +++ Singapore - clarification of VAT time of supply rules +++ Slovakia - increases VAT 1% to 20% +++ EU - 2009 VAT refund deadline delayed from Sep 2010 to Mar 2011 +++ Australia - Victoria Fire Service Levy to be scrapped in July 2012 +++ Romania - increases VAT 5% to 24% +++ UK - confusion on UK 1% IPT increase +++ Andorra - 4.5% VAT to be introduced +++ Bulgaria - to introduce insurance premium tax at 2% +++ Finland - VAT and IPT raised to 23% +++ Canada - HST introduced in British Columbia and Ontario +++ France - changes requirements for fiscal rep on insurance +++ +++ Croatia - a 10% motor 3rd party liability risk premium will be charged from 2009 to cover traffic accident costs +++ Panama - increases VAT to 7% +++ Estonia - reduced VAT increased from 5% to 9%; many items now on standard rate +++ Mexico - increases VAT 1% to 16% +++ EU - Revised Mutual Assistance Directive issued to assist tax authorities share information on VAT and IPT +++ France - Natural Disaster Compensation Scheme has increased again from 8% to 12% +++ Taiwan - introduces VAT refunds for non-resident businesses +++ India - sets CENVAT at 10.3% +++ Hungary - Aircraft hull and aviation liability is now exempt from the 1.5% Fire Brigade Charge +++ Ireland - government insurance levy on non-Life increases from 2% to 3%; new 1% levy on Life +++ Italy - potential to defer VAT payments to point where cash received +++

Czech VAT compliance issues

By Mark Davidson, TMF Prague
Click here to read the original artivcle 9 September 2009

Doing business in the Czech Republic for Canadian companies throws up many administrative and cultural hurdles. Few of these are as perplexing as VAT - the European Union’s equivalent of GST – or as potentially expensive. Mark Davidson of TMF VAT reviews some of the pitfalls for traders, as well as how the Czech Republic has introduced some particularly favourable VAT schemes to make it a highly desirable EU importation hub.

Czech Republic signs up to a pan-EU tax

Value Added Tax was conceived by a German, and later first introduced by the French in 1954. Since then, it has developed into the world’s first serious cross-border tax, with the European Union now setting the overarching rules for all its 27 member states. The Czech Republic introduced VAT in 2004 as part of its accession to the EU.

The Czech Republic’s current VAT system is based on a series of EU Directives. All EU member states are required to implement these Directives into national law, with only limited scope for local derogations. The aim of these laws is to facilitate free trade around Europe without any losses to businesses from the local VAT regimes.

This means Canadian companies trading in the Czech Republic must comply with the EU-based rules or face risks of losses or blockage to free flowing trade.

Potential VAT losses and savings

Canadian companies trading in the Czech Republic face two primary challenges in terms of VAT. Firstly, if Canadian businesses are incurring Czech VAT on local expenses (e.g. hotel bills or marketing costs) then this cost can be recouped. There is an EU-wide system, known as VAT Reclaims, which enables foreign companies to recover VAT suffered through quarterly claims. These must be submitted with a special form, in Czech, and filed with supporting invoices and proof that the claimant is tax registered. There are strict deadlines for reclaims, and VAT recovery can be timed out.

Secondly, if Canadian companies are selling goods or services in the Czech Republic, they may be liable to register, charge and comply with Czech VAT rules. This means companies need to obtain a Czech VAT number and charge VAT at 19% on sales to local companies or individuals. In return, companies may offset the VAT incurred on any local expenses (e.g. warehouse hire) before paying over the net amount to the Czech tax office.

Whilst this can create an administrative burden, the good news is that they can do this on a non-resident basis, meaning there is no need to form a local branch or subsidiary. VAT is the only consideration to worry about.

The Czech Republic has gone a long way to making itself a favourable destination for inbound investment into the EU. This extends to VAT. The Czech tax regime offers one of the best VAT deferment schemes for importers into the EU. If structured correctly, it is possible to bypass the normal VAT cash charge on importation. This has meant that many global companies have established their Central and Eastern European distribution hubs in the Czech Republic, e.g. Dell.

In summary, Canadian companies need to be wary of losses from Czech VAT, but should carefully explore some of the local cash-saving opportunities as they plan their European business strategy.

Mark Davidson works for TMF VAT Services (www.tmf-vat.com) in Prague, part of the TMF Group which provides global accounting and corporate secretarial services. He can be contacted at mark.davidson@tmf-group.com