Implementation of Amendments to Tax Laws

The Tax Amendment Act 2022 was recently published in the Official Gazette of Austria.

The main aim of this act is the implementation of DAC7 into Austrian domestic law, which expands the automatic exchange of information and reporting obligations to cover certain transactions through digital platforms.

Additionally, the following VAT amendments are included in this bill:

• Introduction of a VAT exemption to the domestic part of international railway tickets
• Extension of the use of the simplification rule for triangular transactions also to chain transactions with more than three parties
• Introduction of new rules on the entitlement to interest on excess VAT and VAT refunds
• Introduction of a definition of the moment when the right to deduct input VAT arises for supplies of services carried out by entrepreneurs using the cash accounting scheme.

Please note that most of these amendments have effects as from 1 January 2023.

Temporary Extension of Reduced VAT Rate on Electricity

The application of the reduced VAT rate of 6% on electricity for residential contracts in Belgium was extended until 31 December 2022. Until 30 September 2022, the reduced VAT rate for natural gas and district heating will also be applicable to natural gas and heating through heat networks. Additionally, the reduced VAT rate for heat pumps will not apply to installations that use other energy sources besides electricity.

Temporary Extension of VAT Rate for Face Masks and Hydroalcoholic Gels

Belgium has extended until 31 December 2022, the application of the reduced VAT rate of 6% for face masks and hydroalcoholic gels.

Tax Treatment of Cryptocurrency and Non-Fungible Tokens

The Federal Public Service for Finance has recently issued a document with clarifications about the tax treatment in Belgium of transactions with cryptocurrencies and non-fungible tokens (NFTs).

Threshold for VAT Registration Increased

As of 1 January 2023, the threshold for mandatory VAT registration in Bulgaria will increase to BGN 100,000 (previously BGN 50,000).

Clarification of Application of Reduced and Zero VAT Rates for Certain Products

The National Revenue Agency published written clarifications about the application of a temporary VAT rate reduction (from 20% to 9%) for central heating and natural gas and a zero VAT rate for supplies of bread and flour. The rates apply from 9 July 2022 until 1 July 2023.

Introduction of VAT Exemption for Medical Products Used in Clinical Trials

The Bulgarian government has introduced a VAT exemption on medical products used in clinical trials. Other amendments were also introduced to the VAT Act, including, among others, an exemption from VAT for conducting clinical trials of medicinal products for human use (under certain conditions); clarifications of the rules for input VAT deduction, VAT refunds and adjustments following the entry into force of a tax audit assessment notice issued and clarification that the VAT rules for successive supplies of goods should not be applied in the case of the exportation of goods from Bulgaria.

VAT Groups: Rules About Input VAT Deduction and Invoicing Obligations

The French government issued a decree with provisions about input VAT deduction and invoicing obligations for VAT groups. In particular, the issued rules are related to the methods and modalities to be used by VAT groups to deduct the input VAT and to the requirements of the invoices issued by its members.

Further Extension of Reduced VAT Rates on Several Goods and Services

The application of the reduced VAT rate of 13% was extended in Greece for transportation, coffee and soft/non-alcoholic drinks, tourism packages, gymnasiums, cinemas, and zoo tickets until 31 December 2022.

Update of VAT Exemption Process and Rules for Digitalisation of Procedures

The VAT exemption procedure when non-EU and domestic goods enter and leave a free zone was amended in Greece with effects to 30 September 2023. Additionally, updates were included aiming to set the ground for the digitalization of certain procedures.

Extension of Mandatory Electronic Invoicing to Small Businesses

The mandatory electronic invoicing in Italy was extended to small businesses through a law decree recently published in the Official Gazette. In this context, as from 1 July 2022, the electronic invoicing has become mandatory in Italy for businesses whose annual turnover exceeded EUR 25,000 in the preceding year. For all the remaining taxable persons, it will become mandatory as from 1 January 2024.

Temporary Reduction of VAT Rate for Qualifying Supplies of Natural Gas Extended

To mitigate the effects of price increases in the electricity and natural gas sectors, the temporary application of the reduced VAT rate to qualifying supplies of natural gas was extended to the third quarter of 2022.

Tax Simplification Measures

The Italian Decree Law No. 73/2022 was recently published in the Official Gazette to introduce urgent tax simplification measures. The main VAT-related measures are as follows:

Supplies of qualifying services in more comfortable hotel accommodations provided to persons recovering in qualifying health institutions and their companions are subject to the reduced VAT rate of 10%.

• Intrastat returns must be submitted electronically by the last day of the month following the relevant period.
• Purchases of goods and services not exceeding EUR 5,000, whose place of supply is outside Italy, are excluded from the communication reporting invoice details of cross-border transactions (esterometro). In addition, penalties for omitted or incorrect transmissions apply starting from 1 July 2022.
• Extension to 31 December 2026 of the application of the reverse charge mechanism regarding supplies of mobile phones; supplies of game consoles, tablet PCs and laptops, and integrated circuit devices such as microprocessors and central processing units in a state prior to integration into end user products; supplies of gas and electricity to a taxable person/reseller, among others.

This decree is in the process of being converted into law by Parliament, so the respective provisions may be amended or supplemented.

Clarification About the Transfer of VAT Refund Entitlements to Third Parties

The Italian tax authorities clarified that the entitlement to a VAT refund claim, under the procedure set out in the VAT Act to non-resident taxable persons established outside the EU that are not VAT registered in Italy, cannot be transferred to third parties.

Urgent Measures to Support Enterprises Because of Increased Energy Costs

The Italian Parliament has enacted urgent measures to support enterprises affected by the increase of energy prices, including the extension of targeted tax credits and the temporary reduction of the VAT rate applicable to qualifying supplies of natural gas.

In particular, the supplies of natural gas used for domestic and industrial purposes, accounted for in the invoices issued in relation to the estimated or actual consumption taking place in July, August, and September 2022, are subject to the super-reduced VAT rate of 5%.

Reduced VAT Rate for Natural Gas

Until 21 August 2022, the supplies of natural gas used for transport are subject to the super-reduced VAT rate of 5%.

Late VAT Filing Penalty for June 2022 Waived

The tax administration for registering domains and VAT has waived the penalty for late filing of the monthly VAT returns that were due by 15 June 2022.

Amendment of Decree on VAT Fixed Establishments

The State Secretary for Finance amended several decrees, following the decisions of the ECJ in cases C-7/13 and C-812/19, where it was held that the services provided by a head office to a fixed establishment in another EU member state are VAT taxable if the head office is part of a VAT group.

Extension of Key VAT Deadlines

The Portuguese government announced with regard to the following declarations, which must be filed until 31 August 2022, that the respective VAT payment is due and may be performed until 6 September 2022, without any accruals of penalties:

• Monthly VAT return for June 2022
• Quarterly VAT return for the second quarter of 2022

Changes to the VAT Rates Applicable in Certain Supplies

Romania was recently gazetted legislation that introduces, as of 1 January 2023, changes to the VAT rates applicable to certain supplies. Some examples of the supplies concerned (under certain conditions) are:

• The reduced 5% VAT rate will be applicable for the supply of firewood and supply of dwellings
• The standard 19% VAT rate will be applicable to non-alcoholic beverages
• The supply of hotel accommodation and restaurant and catering services will be subject to the 9% VAT rate

Clarification About VAT Treatment of Transfer of Company or Its Assets in Slovenia

The Slovenian tax authorities have recently clarified that in the case of a transfer for consideration of a company or its assets, VAT applies since there is no legal basis for taxation with the immovable property transfer tax.