Euro VAT Refund’s latest global tax and VAT/GST reporting update
Tax Authorities around the world are responding to stuttering economies under the coronavirus (COVID-19) threat.
13th Directive - EU VAT reclaim deadline for non-EU countries
Belgium; Greece; Denmark; Estonia; Greece; Hungary; Italy; Latvia; Poland; Portugal; Romania; and Spain are extending the VAT reclaim deadline for non-EU countries. The current deadline is September 30, 2020.
Announcements from Members of the 27 European Union Countries who are providing VAT easement measures:
Austria has reduced their VAT rate for certain services from July 1 until the rest of 2020. A reduced VAT rate of 5% applies to hospitality services, tourism, art and cultural events, as well as to the sale of magazines and books.
In addition, Austria’s Bundesminiterium Finanzen Ministry of Finance (BMF) implemented a VAT payment and penalty deferment application scheme.Monthly VAT payers may apply for an extension and payment plan. VAT audits will not go ahead for any business which can demonstrate issues related to the crisis.
Belgium extends VAT filing and payment dates:
Feb 2020 VAT return monthly: April 6 (extended from March 20)
Payment: May 20 (extended from March 20)
Intrastat & EC Sales listing: April 6 (extended from March 20)
Mar 2020 VAT return monthly: May 7 (extended from April 20)
Payment: June 20 (extended from April 20)
Intrastat & EC Sales listing: May 6 (extended from April 20)
Quarter 1 2020 VAT return: May 7 (extended from April 20)
Payment: June 20 (extended from April 20)
Intrastat & EC Sales listing: May 7 (extended from April 20)
Belgium announced they are lowering the VAT on hotels, restaurants, cafes to 6% (from 21% or 12% VAT). Read more
Bulgaria reduced their VAT rate to 9% on the sale of books and magazines, as well as for hospitality services and certain products for babies/infants. The reduced VAT rate is valid from July 1 until December 31, 2020.
VAT registered businesses with annual turnover below HRK 7.5m are permitted to delay their VAT liabilities until July (extended from April). No penalties or late interest charges. However returns still need to be filed on time: on the 20th of the month or quarter after the reporting period. Businesses may also apply for an additional 3-month extension (October).
The Czech Republic has also reduced their VAT rate for certain services due to COVID. As of July 1, 2020, a reduced VAT rate of 10% is applicable for accommodation services, cultural & sporting events and to wellness/spa services.
In addition, starting January 1, 2021 the Czech Republic is planning on reducing their late payment penalties on belated VAT payments.
Value Added Tax easements are in effect from The Finish Tax Authorities, VERO Skatt. Late payment penalties and interest charges are waived on overdue payments until August 31. Payment of delayed VAT is due by November 30 (reduced interest charge of 4%) however it’s only offered by application to the Tax Authority. Otherwise, filings and payments need to be submitted by the 10th of the month or quarter after the reporting period per usual.
VAT credit repayments will be accelerated. But VAT returns are still due on time. In other words, VAT returns need to be submitted by 19th of each month as usual.
Bundesfinanzministerium (BMF), The Germany Ministry of Finance, have announced that businesses may apply for an extension (until December 31) on their VAT payments. They need to submit basic proof of challenging circumstances.
Germany agreed on an economic stimulus package of EUR 130 billion during the COVID-19 crisis. Over the next six months, VAT rates will be reduced to 16% (from 19%) and 5% (from 7%) starting July 1 and ending on December 31. - Read more
The Greek government VAT support measures include:
- For businesses, VAT payments until April 30 are postponed until 31 August
- Outstanding VAT on March 11 will not need to be paid until August 31
- 2019 sales lists filing is extended to June 30
- VAT rate cut on medical products (related to the epidemic) from 24% to 6%.
Greece dropped the VAT rate to 13% (from 24%) to help Greek tourism sector businesses. - Read more
Businesses may apply for VAT payment deferrals form the Hungarian tax and customs office. However a HUF10,000 administrative fee will apply. Tax postponement and associated penalties and interest include tax payments and repayment schedule.
VAT returns must be filed on time.
However, the Irish Revenue Commission have suspended VAT liabilities enforcement activities. Small companies (below €3million) will not be charged late interest or payment penalties for January-February VAT payments. Larger businesses need to contact the Commission to request a payment delay. Businesses in trouble should contact the Commission to negotiate payment terms.
2019 annual return for non-resident businesses is due April 30. First Quarter VAT return due June 1 with the corresponding Intrastat on April 27. Non-resident VAT businesses still need to file and pay VAT on time. The Italian tax office does not provide extensions on VAT returns or payments.
(For small businesses (below €2million per year) VAT payments are postponed until 31 May 31 (from March 20). This applies to resident taxpayers only. 2019 Annual VAT return filing is postponed until June 30.)
Businesses may request a delay on VAT (until June 30) by submitting an application for review. Also, VAT credit balances on submitted returns will be refunded within 30 days (instead of held until year end).
The Dutch customs and tax office are not enforcing the non-EU importer of record rules.
Other Dutch VAT easements include:
- Businesses may apply for a 3 month delay of VAT payments as long as they are able to prove hardship resulting from the crisis (longer period may be requested, additional supporting information required). The completed application leads to an automatic pause on VAT liabilities.
- The tax office may cancel any penalties or interest for any late payments. Otherwise, penalty interest may be reduced (from 4% to 0.01%). Quarterly VAT returns may be changed to monthly returns for improved cash flow.
- Businesses may present 2020 VAT reclaims from other EU member states via 8th Directive claims.
The Polish tax authorities have modified the rules for the application of the White List - thereby simplifying the process for taxpayers. The new application rules are to be applied retroactively as of January 1, 2020:
- Notification of a transfer to an account not listed on the White List must be sent to the tax authorities within 7 days of the transfer order (previously deadline was 3 days). During COVID an even longer period of 14 days is applied.
- The notification must be sent to the tax office of the purchaser (i.e. the service recipient making the payment) and not to the tax office of the service provider.
- If the supply/service provided is subject to a split payment, the White List rules do not apply (the joint liability is no longer applicable).
- Implementation of the new SAF-T structure, as well as the new VAT reporting process is postponed until October 1, 2020 (instead of VAT return only transmission of an extended SAF-T file).
February month returns may be delayed until April 10 (based on Portugese e-invoice platform), without penalties/interest. This is applicable to businesses with a turnover not exceeding €10million per year.
For businesses with a higher turnover, an application must be submitted. The scheme is available to monthly or quarterly taxpayers: Full payment; Three-monthly payments without interest charge; and Six-monthly payments, including late interest on the final three instalments.
The Slovak Ministry of Finance published a proposed relaxation of Value Added Tax and other tax rules. Return filings are postponed by 30 days. There will also be no interest or penalties on late filings. In addition, it includes a two-month VAT payment extension (currently 25th of the month following the reporting month or quarter. This apples to February, March and April payments.)
VAT filings still need to be submitted on time. However, businesses may apply for a VAT payment deferral if affected by the COVID-19 outbreak. A granted request would result in no penalties or interest charges.
Mainland Spain closed its tax offices for face-to-face meetings. VAT payments are being delayed in Spain for small businesses (below €6 million). The scheme is not available for larger businesses or if the VAT due is above €30 million.
Businesses may delay VAT payments and other tax settlements for up to 12 months, as part of the latest Swedish crown support. These measures can be backdated to January 2020, and may last until September 2020 for quarterly VAT reporters. For annual VAT payers it’s introduced between December 27, 2019 and January 17, 2021.
Update from other countries:
Australian Tax Office is offering payment delays for taxes on goods and services. Businesses with GST credits/refunds, may be able to switch from quarterly to monthly filings for speedy refunds. Also, businesses with cash flow difficulties may liaise with the authorities for relief from late GST payments, penalties, interest liabilities and receive deferred payment schedules.
There are no extensions on payment deadlines on Goods and Services tax, however penalties and fines for late filings are suspended. Businesses need to show direct impact of the virus on the company’s situation when appealing the payment fines.
The deadline for filing VAT refund claims from Norway for 2019 is extended to September 30, 2020.
Japan is not lowering the 10% Consumption Tax rate to 5% as discussed previously. Instead, they delayed filing deadlines and payments for individuals by two months until May. Businesses still need to file on time.
Serbia extended their filing deadline for VAT refund claims for 2019 until September 30, 2020.
The United Kingdom has temporarily reduced their VAT rate on certain services. During the period July 15, 2020 until December 1, 2020, a reduced VAT rate of 5% applies to the following services: hospitability (restaurants and catering, excluding alcoholic beverages), culture/tourism (e.g. admission to theatres, circuses, zoos, amusement parks, concerts, no sporting events) and accommodation services (hotel, campsites).
In addition, the deadline to keep digital records and the "digital link" is postposed for companies subject to the MTD until April 1, 2021 (originally planned to apply April 2020 and now moved by one year due to the corona pandemic). In addition, the UK will extend the deadline for MTD reporting to companies that have a turnover below the registration threshold (GBP 85,000). In other words, the companies that have registered voluntarily for VAT purposes are not obligated until April 1, 2022 (to keep digital records and to ensure a "digital link" in their MTD reporting).
Check with your team member at Euro VAT Refund for your deadline as a non-resident company (with UK VAT registration). Also, so far the Mini One-Stop-Shop MOSS returns are not receiving a payment easement.
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