Compliance Services

In what appears to be a busy month for countries raising the VAT threshold, much like Italy this month who is proposing a similar measure, Lithuania is seeking to raise its VAT registration threshold. 

Lithuania seeks a rise from 45,000 Euros to 65,000 Euros.  

While streamlining of the compliance and fiscal-related procedures typically serves as the main motivation behind this, it is believed that external factors-particularly inflation, also can trigger a request for a rise in the VAT registration threshold. 

Approval for raising the VAT threshold is currently with Parliament. The EU VAT Directive outlines some limits in respect of the application of raising the VAT threshold, but it is possible to apply for a derogation to circumvent this. 

Greece has published a timeline to implement B2G e-invoicing in the country in line with the following: 

• As of 1 January 2024, suppliers to all central government agencies will be in scope 
• From 1 June 2024 suppliers to all other government authorities will be scope 
• From 1 January 2025, other government expenses must be invoiced electronically 

The official communication in respect of the same in the Government Gazette can be found here: 

https://www.sate.gr/data_source/2022%CE%A5%CE%A0%CE%9F%CE%99%CE%9A-%CE%A6%CE%95%CE%9A6232%CE%92.pdf 

You can read more about Greece on our dedicated country-specific page here. 

In practice, we know that governments offer tax incentives as a means of encouraging e-invoicing – and more often than not, this has proven to be an effective measure in spawning e-invoicing across individual EU member States.  Greece has passed legislation on 28 March 2023 which states that companies who opted for e-invoicing within the 2020 tax year will benefit from certain tax incentives until the 2023 fiscal year. Tax incentives are a two-way success: they encourage the growth of e-invoicing and engage taxpayers with the process.  

The PDF version of the bill (in Greek) can be accessed via the link below:  

https://www.et.gr/api/DownloadFeksApi/?fek_pdf=20230100077 

Last month, we announced Croatia’s intention to mandate B2B e-invoicing in the country. You can read more about their initial plans here. 

Unsurprisingly, the Croatian government will be keen to collate public sentiment in respect of e-invoicing, where noise has previously not been as vociferous when compared to other neighbouring countries. To this effect, Croatia has launched a public consultation in respect of B2B e-invoicing in the country.  

Croatia is a compliant territory for Tungsten Network and we are following progress in respect of the proposed B2B mandate in the country. 

As noise around the VAT in the Digital Age (ViDA) proposal intensifies, multiple EU Member States are currently debating the proposal in their national parliaments. We expect there to be a flurry of activity as EU Member States contemplate and debate the proposal.  

Italy is the latest country to actively engage with the proposal, with the Italian Ministry of Economy and Finance having launched a public consultation regarding the VAT in the Digital Age proposal. Parties could provide feedback and leave comments until 10 April 2023. 

The link below provides access to the Italian public consultation: 

https://www1.finanze.gov.it/finanze2/servizi/n_consult_newDF/consulta.php?id=8727608&step=0 

The VAT in the Digital Age (ViDA) proposal is a critical development which endeavours to structure the e-invoicing and e-reporting landscape over the next few years. You can read more about the proposal in our recent post here. 

Italy’s e-invoicing mandate introduced in 2019, and the subsequent cross-border obligations instituted in 2022, are both complex e-invoicing and e-reporting solutions respectively, often prompting questions by Italian taxpayers. Consequently, the Italian government frequently issues circulars on unclear or nebulous issues. 

Circular N.6 dated 20 March 2023 clarifies that the sending of electronic invoices to the Exchange System (SdI) after the ordinary deadlines is considered a formal irregularity, and therefore remediable, provided that the same invoices are correctly included in the relevant VAT settlement, with relative payment of the tax. For the same reason, the failure to send the electronic payments stored and entered in the accounts can be remedied with the payment of the tax due. The Circular therefore provides taxpayers with some concessions, even though ordinary deadlines may have been breached. 

The Circular can be accessed via the following link: 

https://www.agenziaentrate.gov.it/portale/documents/20143/5081192/circolare+n+6_tregua_fiscale_del+20+marzo+2023.pdf/5e8a2e76-dd65-3188-b9a7-9e6f1fa86aff 

Increasing (or reducing) the VAT threshold is a frequent fiscal procedure deployed by countries and may be triggered by multiple reasons. Increasing the VAT threshold holds some advantages for taxpayers- particularly those companies who, because of the increase, find themselves relieved of multiple VAT obligations. 

Italy has proposed to increase its threshold for VAT registration from 65,000 Euros to 85,000 Euros. The European Commission and European Council, whose permission is required to raise the VAT registration threshold, has supported the increase. 

This measure must not be underestimated- Italy’s VAT registration threshold is the highest in the European Union to date. It will be effective from 1 January 2023 to 31 December 2024, at which point it will need re-assessment.  

At the fnfe-mpe’s La Journéee de la Facture Électronique 2023 last week, more details have been revealed about the pilot program for the mandatory B2B e-invoicing & e-reporting system. The pilot will take place from 3 January 2024 until 30 June 2024.  

Following are the timelines for the preparation phase of the pilot program:  

• 15 April 2023: application forms will be published on the official website (impots.gouv.fr) 
• April-May 2023: applications for taxpayers that are interested in participating in the pilot will open 
• June 2023: applicants are notified whether they have been selected 
• September 2023: SME (PME) and very small businesses (TPE) will be added to the pilot  
• Candidates for the pilot phase under PDP will be required to demonstrate their ability to obtain registration within time frame 

Currently, it is compulsory for GST registered businesses in India whose annual turnover exceeds RS 10 crores to clear their invoices with the government portal (Invoice Registration Portal) before sharing the invoice with their buyers.  

According to GST e-Invoice system’s notification published on 17th March 2023, businesses not covered by the mandate can now issue e-invoices voluntarily for FY 2022-23 

In our previous blog, we wrote about ZATCA’s extended period for the “Cancellation of Fines and Exemption Penalties Initiative”.   Under this initiative, fines including late filings, late registrations, and VAT field control violations relating to e-invoicing are cancelled for all taxpayers. 

The initiative will officially expire at the end of May 2023. The Zakat, Tax and Customs Authority (ZATCA) urges taxpayers to benefit from the Cancellation of Fines and Exemption initiative prior to its expiration date.