TaxTech July 9, 2018
Before you kick start the week, let’s take a quick look at last week updates from the finance industry. Denmark saw an overhaul of its Tax agency which has been split into seven separate entities, providing more focus and attention on each area. The Thai government was very busy last week. They confirmed that the current VAT rate of 7% will not be increased until at least 30 September 2019, and they released a new Tax decree, imposing a 7% VAT on every crypto trade. In Hungary, the SAF-T, real-time reporting and e-invoicing came into effect on July 1st, but as not every company is ready, the Hungarian authorities announced a grace-period of one month. The Dutch are known for their football craze and the Dutch Court has decided that input VAT can be recovered on visiting a football match. But only with a business relation and only if there is no personal gain for the employee. Last week saw also the release of the Worldwide Transfer Pricing Reference Guide from Ernst & Young, always a good reference to have And last but not least, in Slovakia, the Finance Administration started to publish VAT refunds on its website. Now, everyone can see and check who has asked for a VAT refund, resulting in better public control and transparency. Slovakia is the first EU country doing this. Additional updates and changes from the finance industry from last week are:
UK: Draft Finance Bill 2018-2019. The draft Finance Bill 2018-2019, which was released July 6, introduces amendments to the United Kingdom’s rules on controlled foreign companies, hybrid mismatches, and exit taxation mandated by the EU’s 2016 anti-tax-avoidance directive and 2017 amended directive. The consultation on the draft legislation will run until 31 August 2018, with measures included in the next Finance Bill.
Spain: changes on the Intrastat return. The Spanish authorities published important changes on the content of Intrastat returns. These changes will simplify the preparation of Intrastat returns in Spain, although they will require changes in the current process. Going forward, the period when a movement of goods from or into other EU countries is reported must match the tax point of the intra-Community supply or acquisition. More here. The Spanish tax authorities recently launched a portal allowing users to confirm the correct VAT treatment of their international transactions with a virtual assistance who provides the response or the link to the relevant legislation based on Artificial Intelligence parameters. You can access the tool here. The Spanish authorities also published an AI virtual assistant to provide answers on questions related to SII reporting.
European Court: Judgement in Case C‑320/17, regarding Articles 2, 9 and 168 of Council Directive 2006/112/EC. The case explains that a holding company that is letting a building to a daughter company, is providing an economic activity. Summary here.
US: New Jersey Pass First Remote Seller Bill in Response to Wayfair. The New Jersey Legislature has passed the first remote sellers bill responding to the U.S. Supreme Court ruling in South Dakota v. Wayfair Inc. The bill would set the same thresholds as the South Dakota law upheld by the Court for requiring remote sellers to collect and remit sales tax on sales into the state (more than $100,000 in sales into New Jersey or engage in 200 or more separate transactions into the state). The bill was recently amended to include marketplace provisions and push back the bill’s effective date to October 1, 2018. Details here. Alabama will also enforce remote sales tax collections. Alabama has had a rule requiring certain out-of-state sellers to collect and remit tax on their sales into the state since January 1, 2016, but it’s lacked the authority to properly enforce it. Until now — enforcement begins October 1, 2018. Details here.
The Bahamas: updated VAT Guidance published. The Bahamas Department of Inland Revenue has published new VAT guides reflecting the increase in the VAT rate from 7.5% to 12.0% and other VAT changes effective 1 July as provided for in the 2018/19 Budget. One of the key guides regarding the increased rate is VAT Guidance on Transitional Arrangements. The other updated guidance includes the General VAT Guide and VAT Guidance on the Cash Accounting and Flat Rate Schemes.
Clearing up Your Misconceptions about VAT Reclaim. Are you keeping up with the numerous ever-changing policies for VAT reclaim? By implementing a technology that stabilizes expense reporting and maintains the clarity of reporting, you can relieve a lot of the pressure that rests on the shoulders of your financial managers. More here.
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