In an era where energy prices are soaring, gas and electricity VAT rates have come sharply into focus on the continent. To this effect, Ireland has reduced domestic and electricity VAT rates to 9% (down from 13.5%) until 31 October 2023.
Ireland is a compliant territory for Kofax and our solution supports all valid VAT rates in the country.
Cyprus, following recent VAT changes in the country, is proposing yet further changes as part of its fiscal overhaul- including a reduction in the standard rate and reduced rate for specific goods. The move endeavours to target basic everyday goods such as milk and eggs and is expected to last until 31 October 2023.
Cyprus is a compliant territory for Tungsten Network and our solution supports all valid VAT rates in the country.
While the discernible trend to reverse VAT rates is appearing to be more commonplace, there is an element of predictability associated with the practice, as countries attempt to regain a sense of economic stability which was only really apparent prior to the pandemic. Tax rates have a direct correlation with wider economic and societal agendas. As a result, we can expect multiple countries to adjust their VAT rates in the coming months.
As part of its spring Memorandum, Netherlands will re-visit its 9% reduced VAT rate and its zero-rated category, with a means to simplify their application. The Memorandum makes some stark admissions, including an analysis of whether the reduced rate actively achieves its desired aim of encouraging spending and general support for specific sectors. The Memorandum also candidly concedes that wealthiest households benefit almost twice as much as other households from reduced rates. Such conclusions indicate that the application of reduced rates must be re-considered, considering a more equitable tax distribution.
Netherlands is a compliant territory for Tungsten Network. Our portal solution incorporates all valid VAT rates in the country and we will continue to monitor any tax rate changes in the country.
VAT rates associated with power and gas supplies have sharply come into focus- in an era where energy prices are rising, and especially during the winter months when reliance on these elements increases. Several countries across the content have adjusted VAT rates to accommodate rising inflation.
As inflation subsides, it is inevitable that countries will turn their attention to restoring previous VAT rates- which is unsurprising, as the summer months lead to less energy reliance. This also mirrors the discernible trend of countries effecting pre-covid tax rates.
Finland will now restore the standard rate of 24% on electricity from 1 May 2023. This will reverse the temporary 10% rate applied to electricity from 1 December 2023. This rate was temporarily introduced in December 2022.
Finland is a compliant territory for Tungsten Network and our e-invoicing solution supports all valid VAT rates in the country.
VAT rate changes are significant tax measures, and, while once rare, are now becoming more ubiquitous in an era of economic uncertainty.
Estonia is now following in the footsteps of its European counterparts Switzerland and Czechoslovakia by proposing a rise in its standard VAT rate, as well as an alteration to the VAT rate for services in the county.
The proposed changes are as follows:
Estonia is a compliant territory for Tungsten Network and we will support the VAT rate change if confirmed.
Growing inflation across Europe has compelled several EU Member States to adjust their VAT rates. Often, these modifications have targeted everyday basic merchandise to create more affordable goods and services for residents.
Spain had initially introduced some temporary VAT concessions in January 2023 by zero-rating specific food products. The Spanish government has now confirmed that these measures will continue up to 30 June 2023.
Initial forecasts indicate that the fiscal measures Spain is initiating are working as inflation continues to plummet in the country. However, the inflation is still high enough for the Spanish government to continue the temporary zero-rating of specific food products, albeit for a temporary period.
Spain is a compliant territory for Tungsten Network and our e-invoicing solution supports all valid VAT rates in the country.
The Vietnamese government has approved tax reductions for 2023. As a result of this new approval, 2% VAT reductions will be applied to goods and services subject to 10% VAT until December 31, 2023.
This reduction is designed to help businesses cope with rising interest rates, poor liquidity, and higher logistics prices, as well as boost the economy.
In an era of high energy prices, overall inflation and even recession on the horizon for certain countries- it is expected that countries will respond by adjusting VAT rates.
Portugal has exempted the import and transfers of specific food products, effective 18 April 2023 to 31 October 2023, from VAT.
The full list can be found here.
Portugal has taken the tax rate concessions even further and confirmed the zero VAT rate for specific food products. Law No. 17/2023 confirms the full list of products subject to the zero VAT rate.
Our earlier post commented on the Czech government’s proposal to consolidate their VAT rates. The Czech government are signalling further intent that this will be implemented as part of the Czech government’s wider fiscal framework.
Currently, the following VAT rates apply in the Czech Republic:
The Czech government is planning to consolidate the 10% and 15% rates into a new, single VAT rate of 14%, with the 21% VAT remaining unaffected. Inevitably, this will mean that goods formerly subject to the 10% VAT rate will find themselves subject to a higher VAT rate. It follows that the Czech government stands to gain considerably from an economic perspective – with predicted figures initially forecasting gains of around 1 billion per annum. Such measures serve to demonstrate the far-reaching effects of VAT rate changes on the wider economy.
The proposals will be sent to Parliament in June for review. Implementation of the consolidated rates is currently touted for 1 January 2024.
The Czech Republic is a compliant territory for Tungsten Network and we are closely following developments in relation to the VAT rate change. If confirmed, Tungsten will support the VAT rate change and incorporate this as part of our e-invoicing solution in the country.
In an age of inflation and some economic uncertainty across Europe, it is commonplace to see governments adjust their fiscal policies.
Ireland has announced that from 1 May 2023, the supply and installation of solar panels for private dwellings will be subject to zero-rate VAT.
Ireland is a compliant territory for Tungsten Network and we support all valid rates as part of our e-invoicing solution in the country.
In a bid to boost tourism and promote travel in the country, Slovakia will apply a 10% reduced VAT rate to the tourism and catering industry.
The rate was effective from 1 January 2023. The VAT reduction will boost Slovakia’s tourist industry, which was severely hit by the pandemic, and serve as a boost for the final wave of winter tourism. It looks set to be a permanent VAT rate modification.
The services, to which the reduced VAT rate can be applied after 31 March 2023, are listed in Annex No. 7a of the VAT Act, including:
Slovakia is a complaint territory for Tungsten and we support all valid VAT rates in the country as part of our e-invoicing solution.
Belgium’s fiscal trajectory for 2023 and 2024 is shaping up to be a busy one.
Our recent post on the VAT reduction for energy in Belgium indicated that the reduced rate of 6% for energy (down from 21%) was a temporary one. However, the Belgian Federal Budget has reversed this, stating that this VAT reduction will in fact be a permanent one, benefitting Belgians with more affordable energy prices. The VAT rate will be effective from 1 April 2023.
Belgium is a compliant territory for Tungsten and we support all valid VAT rates in the country as part of our e-invoicing solution.
As Croatia steps up its support for a B2B e-invoicing mandate in 2025, it similarly looks to combat with other fiscal-related measures considering rising inflation that continues to grapple Europe.
As part of these fiscal reforms, the Croatian Parliament has accepted to consider a bill which serves as an emergency measure to extend the reduced VAT on heating-related supplies.
The reduced VAT rate of 5% was due to expire on 31 March 2023 but is now being touted for extension until 31 March 2024.
Croatia is a compliant territory for Tungsten and our portal supports all valid tax rates in the country.
Tungsten follows updates relating to e-invoicing in Latin America, where the trajectory in relation to the same is increasing exponentially.
Compared to its Latin America counterparts, the e-invoicing landscape in Nicaragua has been quiet. But there has, this month, been an update in terms of exempt products in the country.
Agreements 001-2023 and 002-2023, published on the Nicaraguan Ministry of Finance website, has introduced a new list of products subject to VAT exemption. These are effective from 14 February 2023.
The scope of the goods subject to the new relief are broad, including plastic, leather, certain foods and clothing amongst others.
The new agreements should include all VAT exempt goods- and so any goods not included in the list will not be subject to VAT exemption, despite previously being categorised as such.
Canada has announced that income for mining and forging of digital currencies will no longer be subject to the 5% GST / HST.
In what is a first amongst all Canadian provinces, Quebec will now start to impose its local tax, the Quebec Sales tax (QST) on non-resident digital providers of services to its customers. Other taxes deployed in other Canadian provinces are yet to follow suit.
The QST rate is currently set as 9.976%.
Canada is a compliant territory for Tungsten Network and we will follow e-invoicing developments in the country.