Servicios de cumplimiento

This month, we are seeing many countries implementing fiscal obligations for digital service providers. In South Africa, alongside these new obligations, we can see a direct impact on the content required in invoices, too, alongside these new obligations.

The South African Revenue Service (SARS) has clarified the new requirements for tax invoices issued by digital service providers in a new Regulation issued on 10 December 2021. As a summary:

• The invoice must now contain the customer’s business, postal or residential address; an email address is no longer sufficient;
• A ‘full and proper’ description of the services supplied must be included;
• The value of the supply must now be shown on an invoice- not just the VAT amount, as previously was the case.

Such changes also serve a more practical purpose. South Africa taxes B2B supplies of digital services by foreign businesses. Implementing more stringent measures in respect of the invoice data content will make it significantly easier for buyers to reclaim VAT.

In the federal budget in Canada, there is a proposal for a temporary reduction in corporate income tax for any entities that qualify as zero-emission technology manufacturers.

This is currently being discussed, and draft legislation to this effect has already been included in a package of draft legislative proposals on 4 February 2022 by the Department of Finance.

Canada’s department of Finance has released a draft of the Digital Services Tax Act (DSTA). This Act covers a wide array of entities- both residents and non-residents who engage with online users in Canada. The tax is proposed to be set at 3%, and it is expected that this will become payable in 2024, in respect of revenues earned from January 2022.

As this is a draft only, dates are provisional, and we can expect more concrete information in the coming months.

The new CFDI version 4.0, which is intended to replace CFDI version 3.3, was due to become mandatory on 1 May 2022.

The tax administration in Mexico, Servicio de Administracion Tributaria (SAT) subsequently announced that the mandatory usage of CFDI 4.0 was delayed again by a further 2 months, to become mandatory as of 30 June 2022. However, more recently on 9 March 2022, the Mexican Tax Administration issued a press release indicating that the transitional period has been further extended up until 30 September 2022. This extension also applies to version 2.0 of the withholding and payment information in respect of the CFDI. The usage of these documents continues to be optional up until 30 September 2022.
This delay affords many companies with much needed time to adjust to the new changes. This extension also applies to version 2.0 of the withholding and payment information in respect of the CFDI.

Tungsten Network is reviewing its own implementation plans to accommodate the new CFDI version 4.0 considering the revised timeframes.

On 16 February 2022, the European Parliament published a resolution on the implementation of the Sixth VAT Directive (2020/2263(INI), concerning how the VAT gap can be reduced.

The main incentives behind the report were to make improvements to the current Directive and establish a more streamlined, simple, fraud-proof and effective VAT system. It is envisaged that digitalisation will be a means to achieve these aims.

The website of the European Parliament provides further details around this.

Greece has extended the reduced rate of 13% until 30 June 2022 for the following products:

• Passenger transport;
• Coffee and non-alcoholic beverages;
• Cinema;
• Tourist packages;
• Gyms.

Similarly, the 6% reduced VAT rate has also been extended for products required for the protection of Covid-19, until 30 June 2022.

In line with spiralling living costs across Europe, Bulgaria is introducing further tax measures intended to reduce the burden on taxpayers. To this effect, it has put forward a draft Bill Amending and Supplementing the Value Added Tax Act. It has proposed a VAT reduction on the following items:

• Basic foodstuffs;
• Non-alcoholic drinks;
• Medical products;
• Heating, electricity and gas.

This measure will now be debated in Parliament. It is expected that this measure could come into place as soon as 1st April 2022 if approved.

Many countries are working towards achieving a more efficient and streamlined VAT process and reducing tax fraud. Ireland is no exception- the European Commission has recently put Ireland’s tax gap at 1.7 billion Euros.

To this effect, Ireland is currently reviewing plans to implement e-invoicing and e-reporting in the country.

The Irish Revenue has indicated that it will draw inspiration from e-invoicing models in other countries.

Plans to implement e-invoicing are in their infancy at the moment, but Tungsten will monitor any developments in Ireland and keep you informed to this effect.

In line with rising heating costs across much of Europe, the Lithuanian government has temporarily applied to reduce VAT to district heating.
It is proposed that this will temporarily be set to zero VAT.

Spain has firmly communicated its intentions to overhaul its e-invoicing system significantly via the publication of a draft resolution published on 21 February 2022. This comes alongside the backdrop of an incentive to modernise the computer programs that support the accounting, billing and management of businesses across the country.

Amongst the new requirements being proposed by the Spanish Ministry of Finance is the obligation to include QR codes and ID codes in Spanish invoices.

The draft resolution does not specifically refer to B2B e-invoicing. A draft resolution to this effect was published in the summer of 2021 which extends the obligation for e-invoicing to all companies and freelancers in Spain.

Both resolutions serve to illustrate the extent of the e-invoicing developments we can expect to see in Spain in the coming months, as Spain proposes to expand the scope of entities subject to mandatory e-invoicing, as well as introducing radical changes to the content of the invoice as well. It is no coincidence that these resolutions have been published relatively close together, underlining Spain’s motivation to harmonise its VAT-related operations and adopt a robust e-invoicing process.