TaxTech May 7, 2018
Last week saw a lot of new proposals in the EU. Spain proposed a new digital services tax (to be in force before end 2018), which would align with the draft EU Directive from the EC. India announced plans to simplify the GST filing, by reducing content and information required, including a new IT interface for uploading invoices. With the foundations of a European Defense Union, the EU proposed that all defense goods be treated equally for VAT to avoid delays and movement costs. The European Parliament made a fifth update to the EU’s Anti-Money Laundering Directive. The update is designed to bring more transparency to improve the fight against money laundering and terrorist financing. The OECD updated their transfer pricing country profiles, with currently 54 countries published. For anybody with 18 yr olds in the house, the European Parliament initiated a project that will give 20K kids free rail tickets to let them discover the EU by train this year. And while “we are traveling in Europe”, the Giro d’Italia kicked off the tournament in Israel with the first 3 stages, and it was amazing! The Giro will continue in Italy from Tuesday. Enjoy!
European Court of Justice: Opinion Advocate General on Volkswagen. Volkswagen: The opinion from the Advocate General in Case C-153/17 gives an interesting read. Common system of Value Added Tax, Directive 2006/112/EC articles 168 and 173, Deduction of input tax, Vehicle hire purchase transactions, Goods and services used for both taxable transactions and exempt transactions, Origin and scope of the right to deduct and Proportional deduction are discussed. Opinion here.
Swiss: Tax liability change. Changes were made to the definition of “turnover” for Swiss VAT purposes. The annual turnover threshold in excess of CHF100,000 remains unchanged but the amended reference is to the worldwide generated turnover. Details here.
Turkey: VAT registration, B2C sales of “e-services”. A VAT communique with the effective date of 1 January 2018 concerning “e-services” supplies (electronic services provided to individual consumers in Turkey by entities that do not have a tax residence, workplace, and registered head office or business center in Turkey) are required to register in Turkey. Update here.
UK: HM Treasury guidance on financial sanctions and anti-money laundering bill. The guidance explains the UK’s government approach to exceptions and licenses when the UK becomes responsible for implementing their own sanctions regimes. If HMRC can demonstrate that you knew or should have known that your transactions were connected to missing trader fraud then you may lose your entitlement to claim the input tax linked to those transactions. Guidance here.
HRMC has also published a guidance on the definitions that makes an individual an enabler of tax avoidance under legislation introduced in the Finance (No.2) Act 2017. Tax avoidance enablers legislation guidance here.
Italy: guidance on mandatory e-invoicing. Starting January 1, 2019, a general business-to-business (B2B) and business-to-customer (B2C) e-invoicing obligation will apply. Even though the legislation provides for the e-invoicing obligation for all transactions performed between persons established/resident in Italy, as well as Italian Value Added Tax (VAT) registrations of non-established taxable persons, EU Council Decision 2018/593 of 16 April 2018 authorizes Italy to introduce mandatory e-invoicing only for invoices issued by taxable persons established in Italy. More info here.
Isle of Main: Amendment Order 2018 Value Added Tax Act 1996. The Isle of Man VAT regime is required to be in line with the UK regime. This Order makes amendments to the Value Added Tax Act 1996 to correspond with recent amendments made to UK legislation (Value Added Tax Act 1994). New sections inserted into article 3 of the Act to introduce a new and more effective penalty against the participation in VAT fraud. More here.
If you are in Frankfurt today or tomorrow, please come by for a drink at our booth at Concur Fusion Frankfurt and get some valuable insights and interesting advice on how your organization can benefit from the power of automation to improve VAT recovery with full compliance! Check out one of our happy customers here.
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