Keep current with VAT and B2G Reporting news without having to sift through the news every day. Here are the most significant happenings in the world of VAT and B2G Reporting from September:
UK HMRC Opens Consultation for Further “Making Tax Digital” Legislation
Last week, Her Royal Majesty’s Revenue and Customs (HMRC) announced the opening of a consultation period regarding the current legislation for the “Making Tax Digital” initiative, which is slated to take effect from April 2019.
In its announcement, HMRC provided links to summaries regarding the current content of related legislation, and alerted consumers that they have until November 10, 2017 to submit comments to the Customs Office. The notice provides significant guidance on the current stance of the “Making Tax Digital” legislation and the potential impacts to both direct and indirect tax regimes in the United Kingdom.
Croatian Ministry of Finance Clarifies VAT Exemption Under Article 39(1)(m) of the Croatian VAT Act
The Croatian Ministry of Finance has issued clarifying guidance related to the VAT exemptions available to non-profit entities under Article 39(1)(m) of the Croatian VAT Act. Section 1(m) of Article 39 states that “services closely related to sport or physical education performed by non-profit legal persons, to persons engaged in sport or participating in physical education, are exempt from VAT”. The guidance issued by the Ministry of Finance addresses the VAT treatment of these types of services, in situations when the supply is being made by a legal business entity rather than a non-profit organization. The Ministry concludes that in order to be exempt from VAT under Article 39(1)(m), the services must be supplied by an actual non-profit entity.
Italian Ministry of Economy and Finance Provides Update on Split Payment System
On September 14, 2017 the Italian Ministry of Economy and Finance published the updated lists of companies that qualify for the revised split payment system. The updated lists cover changes to two categories of companies that are subject to the split payment system in Italy:
- Companies lawfully controlled by the Presidency of the Council of Ministers and the Ministries and Subsidiaries of the latter
- Regulated companies lawfully governed by the regions, provinces, metropolitan cities, municipalities, joint ventures and subsidiaries
Dutch Government Unveils 2018 Tax Plan
The Dutch government has released its Tax Plan for 2018, which includes three provisions relating to the VAT law. First is the abolition of the special scheme for agriculture. The government’s explanatory memo states that this plan is being abolished because the modernization of farming has led agricultural businesses to more closely resemble other businesses, thus obviating the need for the regime.
Second, the Tax Plan would amend the definition of medicines under the VAT Act. This change is a reaction to a Supreme Court ruling which had interpreted the current definition to include items such as sunblock, which the government states were never intended to benefit from the reduced rate applicable to medicines.
Finally, the tax plan would amend the provisions relating to the zero-rating of the supply of ships used on the so-called high seas for passenger transport to better conform with the EU VAT directive; the current provision is considered overly broad.