Compliance Category: Actualizaciones de los países

Revisions to Portuguese tax code

The turn of 2023 is a busy one for Portugal in fiscal-related matters, as it also has made significant revisions to its tax code.  

As a summary, these changes include:  

  • An increase in the VAT exemption limit, from 12,500 Euros to 13,500 Euros in 2023 
  • An extension in the deadline for submitting tax returns, which includes an extension to 20 September for the filing of the second quarter VAT returns 
  • A reduction in the VAT rate for vegetable-based drinks and butter, to 6% 
  • A reduction on the VAT rate on biomass equipment, with specific equipment now taxed at 6%.  

Tungsten supports all valid VAT rates as part of our e-invoicing solution in Portugal and these are available on our portal for selection.  

Mandatory inclusion of the ATCUD code on invoices (miscellaneous) 

As of 1 January 2023, it is mandatory to include an ATCUD code on a Portuguese invoice.  

Tungsten has previously commented on the delay of the mandatory implementation of the ATCUD code. As a reminder, the ATCUD is an 8-digit code unique identifier included on Portuguese fiscal documents, and comprises of the following:  

  • A service validation code assigned by the Portuguese tax authorities, and 
  • A series of numbers usually derived from the taxpayers’ software. 

Tungsten does not create the legal invoice on behalf of suppliers in Portugal. However, we assist Portuguese suppliers and buyers through efficient and rich invoice data delivery to buyers. Portuguese suppliers are advised to include the ATCUD code from 1 January 2023 in their fiscal documents as applicable.  

Option to use PDF as e-invoices further extended & other relevant tax changes

Order 8/2022-XXIII of the Secretary of State for Tax Affairs, dated 13 December 2022, introduced some amendments to the Portuguese 2023 tax calendar.  

These revisions have been summarised below:  

  • The possibility to utilise PDFs as e-invoices for tax purposes has once again been extended, now to 31 December 2023, from which point a digital signature will be required on a PDF invoice.* 
  • For any fiscal documents, such as invoices, credit notes, etc issued in 2023, businesses will have until the 8th of the following month to submit the Standard Audit File for Tax (SAF-T).  The SAF-T is an internally recognised standard which is used for the exchange of tax information.  

Further important points raised in the Order include the following: 

  • The Portuguese Tax Authority (PTA) will promote compliance with the technical specifications necessary for the real-time communication of invoice data, either through webservice in real time, or through a monthly web service. 
  • The PTA will also plan to implement a process to issue supporting compliance alerts to taxpayers who do not communicate the data included in their invoices by the 5th day of the following month, or when applicable.  
  • Annual inventories can be submitted until the second month following the end the fiscal year. Consequently, the annual inventories for 2022 should be submitted before 28 February 2023. 

*Tungsten is closely following the requirement for PDF’s to be digitally signed in Portugal, especially considering the VAT in the Digital Age (ViDA) proposal which re-defines the definition of an e-invoice, as well as modifying the relevance of digital signatures on a PDF. 

Exempt VAT for small scale taxpayers till 31 Dec 2023

China’s State Administration for Taxation recently published a notice on VAT incentives for small taxpayers. From January 1 to December 31, 2023, small businesses with monthly sales under 100,000 yuan will be exempt from VAT. 

Furthermore, the STA clarified that from January 1, 2023, until December 31, 2023: 

  • Taxpayers in the production services industry can benefit from an additional 5% VAT deduction based on the input VAT deducted in the current period. 
  • Taxpayers in the lifestyle services industry can benefit from an additional 10% additional VAT deduction based on the deductible input VAT in the current period. 

VAT in the Digital Age (ViDA) proposal

Tungsten has previously communicated on the VAT in the Digital Age initiative, where we relayed the European Commission’s intention to introduce harmonisation across Europe with respect to its fiscal operations.  

The rapid acceleration of digitisation permeating all facets of society has led the European Union to review its own fiscal policies and consider how the processing of these fiscal measures can be aligned with these increasingly high standards of digitisation.  

This, coupled with the need to combat fraud and alleviate multiple cumbersome compliance processes, has propelled the EU to conduct a high-scale review of its fiscal operations and propose a radical overhaul of the VAT system as we know it.  

To this effect, the European commission published the VAT in the Digital Age (ViDA) proposal. The proposal has colossal implications for the future of e-invoicing and e-reporting in the coming years.   

The below is a high-level summary only of the most significant changes, from the proposal: 

Proposed Digital reporting requirements  

  • From 1 January 2024, PDFs will no longer come under the definition of an e-invoice. Paper invoices will still be permitted, but if opting for e-invoicing, structured invoices only can be issued.  
  • The requirement for buyers to accept e-invoices will be removed, thus acting as a major catalyst to compel e-invoicing and ultimately contribute to its proliferation. 
  • EU Member States are free to impose their own e-invoicing obligations- but this crucially excludes clearance models. Clearance models typically require verification via an e-invoicing platform before e-invoices can be issued to the buyer. Italy is one such country which has adopted a clearance e-invoicing model, amongst others, and Poland, to date, has been advancing a similar clearance model. Clearance models which have previously been approved by the European Commission, such as Italy, can continue to operate as per their current process until 1 January 2028. The current process to request derogations to mandate e-invoicing will become obsolete from 1 January 2024. 
  • Invoices must comply with a European standard, rather than utilise country-specific variations. 
  • 1 January 2028: E-invoicing is expected become the default standard for invoice issuance. Paper invoices will need to be specified for certain transactions.  

Real-time reporting obligations 

  • From 1 January 2028, a real-time reporting obligation will be introduced for all EU B2B intra-community transactions. The reporting requirement must be completed within 2 working days after the invoice date.  

Single VAT registration and other e-commerce implications  

  • From 1 January 2025, the EU proposes to introduce a single VAT registration number, effective abolishing the concept of foreign VAT registration, for certain transactions.  
  • A mandatory reverse-charge mechanism will be introduced for B2B supplies of goods and services where the supplier is not established in the country where VAT applies and the customer does have a VAT identification number in that country. 
  • The existing deemed supplier rule for marketplaces facilitating B2C supplies of goods will be extended. All supplies of goods (B2C and B2B) within the EU facilitated by marketplaces will be subject to the extended deemed supplier rule. This means that the marketplace will need to collect and account for VAT in the place the services/goods are delivered. This will have a profound impact for several businesses, as this implies that the requirement to collect VAT will not be passed to local entities.  
  • The Import One Stop Shop (IOSS) scheme for the importation of low-value consignments into the EU will be mandatory for marketplace operators. The IOSS was initially introduced as a fiscal measure to simply VAT-related processes, by allowing taxpayers to register in a single European state and pay European Union import VAT. 
  • Further implementing rules will be introduced for the secure use of the IOSS scheme, e.g. by linking the unique consignment number to the IOSS number.  

Tungsten acknowledges that these are radical changes which will have a profound effect on e-invoicing mandates and e-reporting in the next few years. By extension, Tungsten will also need to consider how the ViDA proposals impact the way Tungsten operates as a service provider. The published consultation has additionally raised some further questions we are working to obtain clarity on and we are collaborating with other EESPA members to respond to the proposal during the Public Consultation We are analysing these changes and are also in contact with our compliance partner, PwC, to discuss the implication of these changes.  

The proposal is ambitious and radical with multiple implications and will require the unanimous consent of all Member States. We are assimilating the changes and will update you further with the development of the proposals, and how we plan to accommodate these, if confirmed.  

The VAT in the Digital Age proposal published by the commission can be found here: 

https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=SWD%3A2022%3A394%3AFIN&qid=1670500532473 

There is an 8 week public consultation period, which can be accessed as per the following: 

https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/13186-VAT-in-the-digital-age_en 

Updated version of guide to issue electronic receipts

A new version of the guide concerning the request for authorisation to issue electronic receipts has been released on the government’s website. Taxpayers should use this guide to follow the requirements and instructions for the access to issuing electronic receipts and electronic documents. 

The link can be accessed here: 

https://www.sri.gob.ec/o/sri-portlet-biblioteca-alfresco-internet/descargar/522a42ed-89c4-4ecd-978f-88c1afcd926c/Gu%c3%ada%20para%20solicitar%20autorizaci%c3%b3n%20de%20emisi%c3%b3n%20de%20comprobantes%20electr%c3%b3nicos%2025042020%5b3052%5d%20(1)-1.pdf 

Local currency change

Croatia’s local currency is transitioning from the Croatian Kuna to the Euro, effective 1 January 2023.  

Tungsten’s Product and Development teams have facilitated the option to utilise the Euro currency from 1 January 2023, while also retaining the ability to select the Kuna currency when required (for example, for ‘late’ invoices, or debit and credit notes where the original invoice dated is dated prior to 1 January 2023).  

Tungsten is communicating with our Croatian suppliers and buyers regarding the change.  

Spanish tax authorities release updated SII technical documentation

The technical documentation of the Suministro Inmediato de Informacion (SII), otherwise known as Spain’s immediate electronic reporting system for VAT in Spain, has been updated by Spanish tax authorities.  

Among the changes, adjustments have been made to benefit’s margin by adding the value AJ in the register of issued invoices. The new validations and errors which come with this new code have also been implemented in this updated version. The amendments will be effective from 1 January 2023.   

The documentation can be accessed via the following link:  

https://sede.agenciatributaria.gob.es/Sede/procedimientoini/G417.shtml  

Obligation to report income on digital platforms

As 2022 draws to a close, a significant observation over the past year has been the number of countries who are imposing obligations to report income on digital platforms.  

Germany is the latest country to impose such obligations.  

The Finance Committee approved the draft law introduced by the Federal Government to implement Council Directive (EU) 2021/514 of 22 March 2021 amending Directive 2011/16/EU on administrative cooperation in the field of taxation and modernising tax procedural law. 

Please refer to 20/3436 for further details. 

Anti-inflation tax measures

Tungsten has followed the anti-inflation measures deployed by the Polish government, which, as the name suggests, are a set of fiscal measures which serve as a direct response to rising inflation in Poland.  

However, the proposed measures do underline the limitations of Member States in respect of some of the fiscal measures they can implement. The European Commission, for example, while agreeing to the zero-rating of basic foods as part of the package, has blocked the zero-rating of natural gas, fuels and fertilisers. This is owing to EU Directive rules, which cite that energy must be taxed to at least 5%. 

While the basic foods rate was reduced to zero VAT early in 2022, it was initially envisaged that Poland would remove the zero VAT rate in January 2023. However, the Chancellery of the Prime Minister has confirmed on the Polish government website that the zero VAT rate on food products will continue until the middle of 2023.  

With inflation still a primary concern for many European countries, we can expect to see multiple countries initiate similar measures over the coming months.  

Amendments to the VAT Decree from January 2023

Federal Decree-Law No. 18 of 2022 has been issued by the UAE Ministry of Finance amending certain provisions of the Federal Decree-Law No. 8 of 2017 on Value Added Tax (the VAT Decree-Law). The amendments will take effect on 1st January 2023.

The following are a summary of the major changes to the VAT Law:

  • Registered persons who make taxable supplies are allowed to apply for an exemption from VAT registration if all their supplies are zero-rated and/or they no longer make any supplies other than zero-rated supplies. (article 15)
  • Additional zero-rated goods and services have been added, e.g healthcare related goods and services, importation of gas, etc. (article 45)
  • Tax Credit Notes must be issued within 14 days from the date of issuing tax invoices. (article 62)

Aside from these amendments, business in the UAE will be subject to a 9% Corporate Tax from 1 June 2023, this will align UAE with other Gulf Cooperation Council states.

New extensions of fully digitized e-fapiao

We have seen many developments since China launched its fully digitized e-fapiao in November 2021. Recently, Sichuan (province) and Xiamen(city) have joined the programme as issuers of fully digitized e-fapiao. This means selected pilot taxpayers in these two regions are now capable of issuing fully digitized e-fapiao to all taxpayers in China.

In light of these changes, we wanted to provide an overview of how the fully digitized process operates to date:

Issuer of sales invoices:  In Guangdong (exc Shenzhen), Shanghai, Sichuan, Xiamen, Inner Mongolia, pilot taxpayers in these regions should issue fully digitized e-fapiao via the government portal, which provides taxpayers with access to 24-hour online services to issue, deliver, and verify their fully  digitalized e-fapiao free of charge.

Receiver of purchase invoices: all taxpayers in China can accept the fully digitized e-fapiao issued from pilot taxpayers.

Fully digitized e-fapiao is one of the key projects being undertaken to reform China’s Golden Tax System. For a more in-depth understanding of how this project operates, you may refer to our previous blog on fully digitized e-fapiao.

Proposal of introducing VAT on e-services for non-resident companies

The Philippines House of Representatives is proposing to introduce VAT on non-resident companies’ supplies of electronic services in an effort to reduce unfair competition between non-resident and resident companies.

Currently, foreign businesses that provide digital services to consumers in the Philippines are not subject to VAT. The House of Representatives propose to apply VAT at 12% to a wide range of electronic services, including streaming games, music, apps, films, e-books, and e-journals.