With this second edition of the WTS Global VAT Newsletter in 2020, we want to share with you insights on the latest developments in terms of VAT and GST across the globe. As the economic and social impacts of the coronavirus disease (COVID-19) continue to challenge the world, WTS Global is continuously updating an overview of the measures taken by various countries to respond to the tax aspects of this crisis: WTS Global Covid-19 overview
In recent days, businesses have been rediscovering the “cash is king” approach. With VAT being a significant cash flow factor, the European section of this newsletter covers different elements of this topic.
Belgium provides a cash flow privilege for so-called “starters”, whereas in Denmark a special regime for exports can be utilised to improve cash flow by creating a virtual input VAT refund position. The Czech Republic, even if driven by another motivation, provides relief by having a largely extended scope of application for the reverse charge system. The appropriate VAT actions of customers defaulting with their payments are shown for France. Germany has decided to temporarily cut VAT rates and extend payment deadlines for import VAT on very short notice. As non-compliance always creates costs, Hungary shares insights on the VAT compliance basics for non-residents. Italy, despite a delayed go-live, further elaborates on the technical side of its e-Invoicing procedures and continues the implementation of Quick Fixes.
Furthermore, outside of Europe, VAT (or GST) is of course the focus of legislation and tax authorities: Angola has modified its rules for the cash settlement and recovery of import VAT. Changes to the VAT law in Chile, amongst others, cover the taxation of specific digital services and the introduction of an “enjoyment” exception for VAT exemptions. Costa Rica replaced its sales tax regime with VAT, which created some significant changes and also shows the first reactions of the tax authorities applying this new law. The Kingdom of Saudi Arabia is the first GCC state to raise its VAT rate.
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