Servicios de cumplimiento

Our previous posts have frequently commented on the progress of B2G e-invoicing in Luxembourg.

To date, this has been running smoothly without any major delays- and in line with this trajectory, we can expect small businesses to also be subject to B2G e-invoicing obligations from 18 March 2023.

Countries are treading a delicate line as they endeavour to balance the costs incurred during covid and a post-covid recovery.

Despite the sharp decline of Covid and its impact, it is still seen to play an influential role in the fiscal measures countries execute.

The Canary Islands is still factoring Covid as part of its tax framework as it announced it will extend the reduced rate on face masks and gloves until 30 June 2023.

The reverse charge mechanism is deployed by multiple countries as a means of regulating the VAT flow to tax authorities, by shifting the onus of paying VAT on to the buyer rather than the supplier. Doing so ensures the payment of VAT and it is therefore viewed as an effective fiscal measure to reduce tax evasion and, by extension, the VAT gap in a country. It is therefore unsurprising that several countries extend the scope of goods and services subject to the reverse charge application.

Spain is no exception, who have now extended the application of the reverse charge to include scrap, plastics and material waste.

From 1 January 2023 to 30 April 2023, Finland will reduce VAT on domestic transport services from 10% to 0%.

Service providers may deduct VAT from their purchases.

Serbia has published a law which amends some aspects of the law on e-invoicing. The main changes involve the following:

• Scope: Certain entities will be excluded from e-invoicing draft law provisions- including taxpayers who are not liable for income tax from self-employment in the sense of the law governing personal income tax
• Obligation to issue an e-invoice: The obligation to issue an e-invoice will also exist for:
  • all requests for payment from public sector entity by a private sector entity
  • all requests for payment between public sector entities.
• Obligation to electronically record VAT calculation: The electronic recording of the VAT calculation is performed in summary, for all obligations, by showing data on the basis and calculated VAT, specifically per VAT rates, unless otherwise stated in the e-invoicing law. Specifically, electronic recording of VAT calculation is done individually, for each obligation, by showing data on the basis, VAT rate and calculated VAT in specific instances.

The Serbian Law on e-invoicing entered into force on 1 January 2023.

Serbia has mandated B2B e-invoicing as of 1 January 2023.

The mandate in Serbia covers the creation, issuance and receipt of invoices, and will be facilitated via the Serbian e-invoicing platform, the Sistema E-Faktura.

Tungsten has also been following recent B2B and B2B e-invoicing developments in Serbia. You can find our most recent post regarding the same here.

We expect 2023 to be a critical year for countries signalling their intent to re-structure their VAT rates, as we enter a post-covid era and countries look to solidify their economic position after multiple volatile years in the financial sector, which was compounded by inflation in 2022.

The tax expert committee in Norway is exploring an overhaul of the VAT system in the country as we know it today.

Key points being discussed include:

• The abolishment of reduced VAT rates and VAT exemptions – which intend to be replaced with a flat rate of 25%
• The inclusion of the public sector in the VAT system
• Digital services becoming subject to VAT.

These proposals are significant and will have profound implications for the fiscal VAT structure in Norway. Feedback via public consultation has been requested, which is expected to conclude in April 2023.

Norway is a compliant territory at Tungsten and we will follow developments, including the tax expert committee’s response to the public consultation. Our e-invoicing solution will support any new VAT rates confirmed by the Norwegian government.

Tungsten successfully accommodated Croatia’s local currency change from Croatian Kuna to the Euro, effective 1 January 2023.

Bulgaria is similarly preparing to transition its local currency, the Bulgarian Lev, to the Euro currency. It has targeted an implementation date of 1 January 2024.

As with our Croatia local currency change implementation, this transition will involve modifications to our all invoice types in Bulgaria, including debit and credit notes. Tungsten is closely monitoring the proposed local currency change in Bulgaria and will accommodate the local currency change, if confirmed. We will keep our Bulgarian market informed with any developments regarding the change.

The volatile economic situation of the past few years has compelled multiple countries to review their fiscal policies. Countries have responded with significant fiscal measures, including modifying standard and reduced VAT rates. Switzerland, for example, is implementing some modifications to its VAT rates in January 2024.

Similarly, the Czech Prime Minister is proposing to make some changes to the VAT rates in the country, through consolidating the two current reduced VAT rates in the country (15% and 10%). The single new reduced rate proposed would be either 13% or 14%. The standard VAT rate of 21% would remain unchanged.

The current proposed timeframe put forward for the implementation of the new VAT rate, like Switzerland, is 1 January 2024.

The Czech Republic is a compliant territory for Tungsten Network. Our e-invoicing solution accommodates all valid VAT rates in the country, and we are closely monitoring any confirmation of the new VAT rate in the country. If confirmed, we will arrange for integration of the new VAT rate as part of our solution.

Currently, VAT registered taxpayers in the UAE are required to report taxable supplies in the emirate where the fixed establishment is located for resident taxpayers, or in the emirate where the supply is received for non-resident taxpayers. The UAE is made up of seven emirates: Abu Dhabi, Ajman, Dubai, Fujairah, Ras Al Khaimah, Sharjah, and Umm Al Quwain.

As of 1^st July 2023, the reporting rule will change for resident taxpayers that engage in e-commerce supplies.

Change of reporting rule for resident taxpayers from 1^st July 2023:

• Resident taxpayers must report taxable supplies made through e-commerce in the emirate in which the supply is received, when the total value of supplies made through e-commerce exceeds 100 million UAE dirham ($27 million) per calendar year.

By adopting this new reporting requirement, the VAT revenue distribution between each emirate should be more equitable, and this requirement is in line with the global trend of taxing e-commerce supplies at the place of consumption.