VAT: Be gone with it!
That’s a slogan of a retail company of electronic products, here in the Netherlands (BTW: Weg ermee!). And I’m annoyed every time I hear it.
First of all, it’s misleading. Consumers think that they get a discount of 21%. That’s the standard VAT rate in the Netherlands. So it’s logical that consumers think that the price goes down with that percentage. Wrong! The discount given is the VAT amount that is included in the original sales price.
For example: the normal price of a TV is EUR 1,000. The consumer thinks that he will only have to pay EUR 790 (1,000 -/- 21%). But when he comes to the shop, the discounted price is EUR 826. A nice discount, but only 17.3%. And that is of course, because the VAT amount that is included in the original sales price is not 21%, but 21/121 ≈ 17,3%.
Secondly, it’s confusing. The retail shop is still charging VAT, as it can of course not decide to not charge VAT on its sales. Every supply is subject to VAT. The shop just charges VAT on a lower net price. But by using the slogan, the shop implies that the sales are without VAT.
And thirdly, and this is probably the most important reason for my annoyance: the slogan implies that VAT is bad. How can you say that about something that gives us so much fun? Probably, we, the editors of VATupdate, are strange persons to have VAT as a hobby and passion. But together with you, our readers and friends, we have the best jobs in the world. VAT enables us to investigate, understand and streamline business processes and transaction flows. And some of the cases before the courts make us giggle.
We would never stop you from buying a new TV, a pair of glasses or a bed. And if you do, make sure you compare brands, options and prices and profit of discounts. But please ignore the big signs denying VAT. You know VAT exists. Really, it does!
If you have any comments, questions or ideas that you want to share with us, please send us an email at [email protected] or leave a comment under the posts of this newsletter on LinkedIn.
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WORLD
- Job opportunities in Belgium, Hungary and the Netherlands
- Job opportunities in Germany, United Kingdom and United States
- Vertex EOY Rules and Rates Report: Why Governments Embrace Transaction Taxes as a Consistent Source of Revenue
- Carbon border adjustments and international trade – What are the key issues?
- 22 quick tax updates to kick off 2022
- Digital VAT/GST Rule Changes to Start 2022
- The future of invoicing is digital
- E-Invoicing & Digital Reporting – What was in the news in January 2022?
- Permanent Establishment in Digital Economy: Is Human Element Relevant?
- Ecommerce – VAT and GST obligations on international sales
- Global – Types of Fiscalization
- How the internet is driving tax policy – and what it means for your business
WEBINARS / EVENTS
- Sovos webinar – Trends: Using VAT digitization to your advantage (Feb 1)
- Vertex Webinar: Turning Data into Insight: Elevating the Tax Department to Drive Business Growth in 2022 (Jan 31)
- Aurifer Webinar – GCC Outlook: compliance updates for Saudi Arabia and beyond (Feb 8)
AFRICA
- Supreme Court delaying resolution of VAT dispute, says Wike
- Nigeria Introduces e-Evaluator and e-Invoicing System for Import and Export Businesses
- Nigeria imposes import/export e-invoices Feb 2022
- Nigeria Automated Tax Administration System
- Infographic: A guide to VAT in South Africa
- Accounting for VAT on leases
- Former SARS employee sentenced for facilitating fraudulent VAT refunds
AMERICAS
- DIFAL Law Finally Published in Brazil
- Brazil Enacts Complementary Law 190/2022 Providing for State VAT on Interstate Transactions with Final Consumers
- VAT Talks – Luciana Marques Vieira da Silva Oliveira
- Constitutionality of ICMS rate differential in 2022
- Ex-Tariff on the brink of extinction
- Mexico’s digital services VAT: Who is registered so far?
- Mexico Publishes Updated List of Registered Non-Resident Digital Service Providers
- Updates list of Non-Resident Digital Service Providers registered for VAT purposes
- New Schedule of Implementation of Electronic Invoice
- Paraguay VAT and INR on foreign digital services
- Louisiana Sales and Use Tax Commission for Remote Sellers Posts Draft VDA Guidance
- Georgia DOR Reminds that Reporting for High-Tech Company Exemption Claimants is Due March 31
- Sales Tax Recovery Can Help Cash Flow
- Four things you need to know before you start collecting sales tax
- Tennessee Repeals Rule Regarding Drop Shipments
- Washington Taxpayer Denied M&E Exemption After Proving to Not be a Manufacturer
- September sales tax holiday proposed (Washington Cities)
- Florida Sales Tax Compliance Rates And Exceptions
- County Fair Associations Exempt From Sales Tax in Texas
- Illinois Considering Breast Pump Sales Tax Exemption
- What Is A “Reverse Sales Tax Audit”? And Why Do You Care?
- Alaska Remote Seller Sales Tax Commission Approves Remote Seller Sales Tax Code
- Colorado House Advances Bill Extending Sales Tax Sourcing Exception for Small Businesses
- Kentucky Sales Tax Compliance
- What You Need to Know About Colorado’s New Sales and Use Tax System
- Bipartisan Bill Would Cut Washington State’s Sales Tax for the First Time in Nearly 40 Years
- Sales tax, public artwork (Virginia)
- Sales tax on delivery charges (Michigan)
ASIA-PACIFIC
- Cambodia to implement e-commerce VAT in April
- Cambodia Postpones Implementation of VAT on Non-Resident E-Commerce Providers to April 2022
- Implementation of VAT for non-resident digital service providers extended to Mar. 31, 2022
- E-commerce VAT from April 1: GDT
- 12 Malayalam film actors under probe for GST evasion
- 34 Suggestions on Budget 2022 Proposal for GST
- A2ZTaxCorp’s Weekly GST Communique dated January 24, 2022
- Banks seek relief from GST notices, special disputes mechanism
- Bombay HC sets aside rejection of GST refunds claimed by Colgate Global
- Branch office salary costs subject to GST
- Fake Firms’ Syndicate Busted For ₹ 362 Crore GST Evasion
- GST officers bust nexus of 93 fake firms passing on Rs 491-crore ITC fraudulently
- GST on smartphones should be lowered to 12% from 18% – ICEA
- GST Updates – Jan 23, 2022
- GST Updates – Jan 24, 2022
- GST Updates – Jan 25, 2022
- GST Updates – Jan 26, 2022
- GST Updates – Jan 27, 2022
- GST Updates – Jan 30, 2022
- Importers, govt. duel in Supreme Court over GST on ocean freight
- Know New Functionality in GST to find your GST Tax Officer Online
- New functionality of Interest Calculator in GSTR-3B is now Live on GST Portal
- No GST is leviable on Cash Discounts received from Supplier: AAR
- No GST on cash discount for early payments by dealer, rules M.P. AAR
- Received a year-end bonus? What will be the impact of perquisite tax in the new year?
- Pharma Industry fears added sales tax to hit drug production
- National Sales Tax Return to be extended to territorial jurisdiction of Azad Jammu and Kashmir
- 5 FAQs on Singapore’s GST hike: KPMG’s Viewpoint
- HSBC Says Singapore to Raise GST Incrementally Over 2023-2024
- VAT for goods and services currently subject to the rate of 10% is reduced to 8%, applicable from 1 February 2022 to 31 December 2022
- Vietnam’s E-invoice Implementation: Prepare for July 2022
- Ministry of Finance releases draft decree on VAT rate reduction
- Vietnam finance ministry proposes VAT cut to aid business recovery
EUROPE
- Commentary on ECJ C-269/20 (Opinion) – Despite legal independence, associated persons can form VAT Group
- ECJ C-607/20 (GE Aircraft Engine Services) – AG Opinion – Issue of retail vouchers to employees
- ECJ C-269/20 (Finanzamt T) – AG Opinion – It is not only the controlling company of the VAT group becomes the taxable person of the VAT group
- Flashback on ECJ Cases C-371/07 (Danfoss and AstraZeneca) – VAT deduction for free meals provided in professional context
- Agenda of the ECJ VAT cases – 8 cases announced till end of Feb 2022, 3 decisions, 4 AG Opinions, 1 hearing
- Flashback on ECJ Cases – C-310/11 (Grattan) – Mail-order agent’s credit does not lead to a reduction in tax base
- ECJ C-513/20 – The thermal spa town of Termas Sulfurosas de Alcafache provides two types of services
- Flashback on ECJ Cases – C-384/95 (Landboden-Agrardienste) – A national compensation scheme not to harvest at least 20% does not constitute a supply of services
- Flashback on ECJ Cases C-215/94 (Mohr) – An indemnity for the abandonment of milk production is not subject to VAT
- Flashback on ECJ Cases – C-350/10 (Nordea Pankki Suomi) – VAT exemption does not apply to electronic messaging services for financial institutions (SWIFT)
- Flashback on ECJ Cases C-384/01 (Commission vs. France) – VAT reduced rates lower than the general rate can be admitted if it does not vulnerate the principle…
- Commentary to ECJ C-607/20 – Transfer of voucher to staff does not constitute a taxable act
- EU Commission Notice (TAXUD) on changes in customs procedures between the EU and the United Kingdom (UK), which will enter into force in 2022
- Survey: less turnover online stores outside EU due to VAT changes
- No input VAT recovery as VAT was not due or paid
- Can be a penalty for parking in breach of the regulations subject to VAT?
- The Future of VAT for financial services and insurance (FSI) – VAT revision is unlikely to arrive before 2023
- The future of EU VAT in a digitizing world – have your say (before 17 Feb)!
- EU refers China to the WTO following its trade restrictions on Lithuania
- Top 10 special territories for VAT purposes
- Rita De La Feria – EU VAT Principles as Interpretative Aids to EU VAT Rules: The Inherent Paradox (2015)
- 2022 VAT Rates in Europe
- Denied VAT deduction for sponsorship may be incorrect
- Online shoppers aren’t loving the EU’s new VAT rules
- Lower VAT for online events? Here’s why it matters.
- European Commission Extends Waiver of Customs Duties and VAT on the Import of Medical Equipment until June 2022 for 23 Member States
- E-commerce VAT compliance at scale: Why less is always more
- VAT ACT 1994 and other Tax Acts amended in response to COVID 19 in Austria
- Parliament approved bill to introduce Carbon Tax
- Circular VAT exemption for medical care
- Call to withdraw Circular 2021/C/96 on the VAT exemption for transport services directly related to an export of goods
- FAQ and reporting forms published by the tax authorities to implement and clarify the DAC 7 “light” reporting obligation(s)
- Council Implementing Decision Published Authorizing Belgium to Extend VAT Exemption Threshold
- Circular 2022/C/2 on the extension of the temporarily reduced VAT rate for mouth masks and hydroalcoholic gels
- Change Bulgarian VAT identification numbers of a large number of natural persons
- Significant number of Bulgarian VAT registration numbers have been changed
- VAT regime for the contribution for the purposes of adjustment of transfer prices between related parties (2006)
- Guidance about VAT Control Statement (ʺVAT Listings e-formʺ)
- New Intrastat. What to prepare for from January 2022?
- Fundamental Judgement of the Supreme Administrative Court for the Pharma Industry
- ECJ dealt with actual supplier and related right to deduct VAT
- VAT registration threshold (turnover) to be increased in the Czech Republic
- Reduction of the right to deduct by a pro-rata coefficient
- Indirect bonuses paid by the manufacturer to the health insurance company may be used to decrease the VAT
- Rules for applying VAT on tourist services
- Czech simplified Intrastat introduced
- France Implements Mandatory Postponed Accounting on Imports
- Press Release Ministry Public Finance on the agreement of EU for the derogation from VAT directive to generalize E-invoice from 2024
- France introduces VAT on advanced payment
- 5 Major VAT developments in France
- European Council Implementing Decision authorising France to introduce mandatory B2B E-Invoicing
- France authorised by EC to mandate e-invoicing 2024
- France VAT B2B e-invoicing and B2C e-reporting delay to 1 July 2024
- Changes as of January 1st 2022: What’s new in the trade of goods declaration (DEB)
- La Grande Illusion: One simple trick for EU e-commerce imports
- French Value-Added Tax E-Invoicing Rules Gets EU Green Light
- E-Invoicing changes in the individual federal states per Jan 1, 2022
- Progress in the implementation of e-invoicing in Germany
- Germany MOF Extends VAT Relief for Catering Services Due to Coronavirus
- Coalition partners agree to further improve import VAT system in Germany
- VAT benefits based on the supplementary agreement to the protocol on the NATO headquarters
- Outpatient help within the framework of the personal budget not VAT exempt
- Italian Tax Authority Confirms Transfer Pricing Adjustments Not Subject to VAT
- Reverse charge also for purchases of IT products not aimed at resale
- New EC listing/INTRASTAT reporting requirements in Italy starting from Jan 1, 2022
- Standard VAT rate for surgical glue
- Bankruptcy before 2021: credit notes only after the unsuccessful conclusion of the procedure
- Seamless group VAT settlement even in the event of a company split
- Changes to the exemption for some international (transport) services
- Recharge of the electronic purse for the purchase of goods not yet defined is not relevant for VAT purposes
- Quarterly VAT refund also in the OSS VAT regime
- Ruling 800/2021: Use of the VAT number attributed to the permanent establishment following the nationalization of the foreign company
- Ruling 51/2022: Surgical glue – medical device – Ordinary VAT rate
- Annual VAT return for 2021 released
- Review of VAT measures in 2022 budget law
- Moldova Tax Agency Clarifies VAT on Non-resident Electronic Services Under DTA With Ukraine in English, Russian, Romanian
- Reduced VAT rate of 6% for lodging and restaurant services extended until Mar. 15, 2022
- VAT exemption 24-hour services for intramural and extramural clients external healthcare institutions
- 24-hour remote care services exempt from VAT
- Aphrodisiacs subject to standard VAT rate
- VAT challenges in temporary housing for employees
- Advance on sales price is taxed with VAT
- VAT refund for two exclusive cars rightly refused
- Deduction of input tax for temporarily free music festival mainly subsidized with subsidies
- Still deduction for incorrectly invoiced VAT
- VAT deduction for organizer of free music festival
- Entity not a VAT entrepreneur for the purchase of exclusive Porsches: no VAT deduction
- Unduly paid VAT is deductible as input tax
- Energy suppliers warn: a VAT reduction from 1 February is unfeasible
- Netherlands Retroactively Provides Reduced VAT Rate for Online Sports Lessons
- Rickety ICT tax authorities inhibits introduction of zero VAT rate on fruit and vegetables
- Imposing a second fine for payment of VAT under an incorrect payment reference to such an extent that it is unlawful
- VAT aspects of cryptocurrencies
- 9% VAT for online sports lessons from gyms
- Essentially new construction during major renovation work on woollen fabric factory
- Exposed assertion that payments were intended for others insufficient evidence
- Unjustified automatic default fine due to error by the Tax Authorities
- Terrain with wall remaining after demolition, not built-up land but building site
- Pro-rata deduction based on fictitious and theoretical rental income for unlet spaces?
- No reduced VAT rate for a platform where individuals can resell tickets
- Errors found in the VAT-R declaration can be corrected in the form of an update, not a correction
- Changing the VAT rates for food, fertilizers and fuels will invalidate the issued WIS
- Update of free tools for JPK_VAT with the declaration
- National e-invoicing system effective 1 January 2022
- Poland will most likely implement reduced VAT rates
- Trends in inspections and proceedings for 2022
- The law on the reduction of VAT on food, energy and fuels has already been signed by the president
- Reduced VAT rates on natural gas and electricity
- SNI Webinar – Poland is ready to embrace a structured e-Invoicing mandate in 2022 (Jan 26)
- Right to deduct VAT in connection with the purchase of accommodation services by taxpayers providing tourism services
- Continuous services in VAT are settled according to specific rules
- Ministry of Finance has launched an application for storing receipts and filing denunciations
- UOKiK will check whether prices will drop after the VAT reduction
- The Senate proposed to extend the catalogue of products with reduced VAT
- Romania introduces SAF-T and edges closer to mandatory e-invoicing
- Audio Blog: SAF-T Romania is live for large taxpayers
- B2B E-invoicing Mandate for High-risk Products and E-transport System
- When purchasing electronic services from a foreign individual entrepreneur, a Russian organization must calculate and pay VAT
- For accounting purposes, VAT is not part of the rental payments
- Procedure for correcting VAT on purchased real estate used in non-taxable transactions
- VAT exemption for canteen services – not only for educational and medical institutions
- Russian catering organizations established by foreigners can also count on the VAT exemption
- Notice when submitting DDV-O, 28 January 2022
- Slovenia (implements article 194 and) Removes VAT Registration For Non-Residents
- Ruling on remote workers and permanent establishments during and after COVID-19 restrictions
- Spain – Consultation sent to EU VAT Committee: Reduced rate of VAT for supplies of electricity
- Spanish Annual VAT returns – what do you need to know about them
- Draft practice adjustments VAT Act Topic: Private shares (Deadline for comments: March 17, 2022)
- Draft practice adjustments VAT Act Topic: Hospitality services
- Draft practice adjustments VAT Act Topic: Closely related persons
- Foreign exchange rates for VAT purposes: Modifications for automatic integration into accounting software
- VAT on break payments: to pay or not to pay?
- HMRC internal manual: VAT Valuation Manual
- HMRC internal manual: Transfer pricing: operational guidance: interaction with indirect taxes: interaction with VAT
- Plastic Packaging Tax – key facts
- Rabbits are zero-rated, even if sold as pets. Sales of pets are standard rated.
- Hotel La Tour – FTT decides that VAT on professional fees in connection with a share sale is recoverable as input tax
- Ventgrove – Court of Session decides that no VAT is due on payment under a lease break clause
- HMRC cancelled VAT registration: Late appeal refused
- Residential Build to Rent – VAT
- 1 January 2022 changes for EU imports to the UK mainland
- VAT Recovery on EV Charging costs – “Range Anxiety” continues
- VAT On Holiday Accommodation
- Supply of rooms to beauticians: VAT exempt
- UK considers cut on domestic energy reduced VAT rate from 5% to 0%
- Is room hire subject to VAT? – The Errol Willy Salons case
- Boris Johnson U-turns over VAT on energy bills
MIDDLE EAST
- Updated NBR financial service guide on VAT treatment on crypto related transactions
- Bahrain’s NBR provides guidance on VAT for cryptocurrencies
- VAT rate increase to 10%; treatment of imports during one-year transitional period
