Temporary Reduction of VAT Rate for Electricity

The Belgian Government has temporarily reduced the VAT rate on the supply of electricity for residential contracts to 6%, from 1 March 2022 until 30 June 2022. (This measure is applicable only for customers with residential contracts.)

Donors to Ukraine Not Obliged to Refund Previously Deducted Input VAT

The Belgian Federal Service for Finance has recently clarified that taxable persons who donate goods that are normally intended for sale, such as foodstuffs, clothes, hygiene products, to Ukrainian citizens do not have to refund previously deducted input VAT. This measure is applicable until 30 June 2022.

Application of Reverse Charge for Local Supplies of Cereals and Industrial Crops Extended

The Bulgarian Government has approved an amendment to the VAT Act to extend the deadline for the application of the reverse charge mechanism for local supplies of cereals and industrial crops from 30 June 2022 until 31 December 2025.

Extension on Reduced VAT Rates for Electricity and Reduced Fuel Tax

The Cyprus Parliament has approved a reduction of excise duty on fuel and extended the application of the reduced VAT rate on electricity. Based on the new law, the tax on petrol and oil will be reduced by 7 cents per litre, dropping to 8.3 cents per litre (VAT included), and the tax on heating oil will be reduced by 6.4 cents per litre (VAT included). Additionally, the period of application of reduced VAT rates on electricity consumption, from 19% to 5% for vulnerable consumers, and from 19% to 9% for all other households, will be extended until 30 June 2022 and 30 April 2022, respectively.

COVID-19: Temporary Zero VAT Rate for Coronavirus Testing and Prevention Tools Extended

The Finnish President has approved a law that extends the temporary zero VAT rate for goods used for testing, treating, or preventing COVID-19, provided such goods are supplied to public healthcare facilities, public social welfare organisations, and other organisations approved by the customs authorities. The zero rate applies retroactively from 1 January 2022 until 30 June 2022.

Tax Measures Supporting Victims of Russian Invasion of Ukraine

As from 24 February 2022 until 31 December 2022, putting personnel, premises, material resources, or other services at the disposal of war victims, exempt entities, or institutions helping war victims by tax-privileged corporations is VAT exempt. This exemption also applies to services for the care and support of refugees. No adjustment of deducted input VAT will be necessary. In addition, if premises or living quarters are put at the disposal of Ukrainian refugees, there ought to be no input VAT adjustment either.

Clarification of VAT “Quick Fixes” Provisions

The Greek government has issued clarifications on the application of the VAT “quick fixes” in relation to intra-community transactions:

• For Quick Fix 1 (call-off stock arrangements), there is a possibility for suppliers to apply the simplification if they have been registered for VAT purposes in the EU member state to which the stock is transferred.
• For Quick Fix 2 (regarding chain transactions), the concept of the “intermediary operator,” which is a person other than the first supplier and the final consumer in the chain, has been clarified, as well as the documents that must be held by the intermediary operator to evidence their status, and the fact that the provisions for chain transactions do not affect the implementation of the simplification for triangular transactions.
• Regarding Quick Fix 3 (substantive requirements for the exemption of intra-EU supplies), it was clarified how those requirements can be fulfilled.
• For Quick Fix 4 (proof of transport in relation to intra-community supplies), the special provisions in relation to the evidence that should be held as a presumption for the physical transportation of the goods from one EU member state to another was also clarified.

Issue of Urgent Measures to Contain Energy Costs

The Italian Government has provided urgent measures to contain the costs of electricity and natural gas and promote the production of renewable energy. Some of the measures include the extension of the temporary reduction of the VAT rate applicable to qualifying supplies of natural gas to 5% and tax credit benefits for the expenses incurred for energy, natural gas, and other forms of energy purchased and consumed in the second quarter of 2022 by qualifying enterprises.

Government Lowers VAT on Electricity to 9%

The Dutch Government has announced a reduction of the VAT rate on electricity from 21% to 9%, starting 1 July 2022, and a reduction of the excise duties on petrol and diesel oil by 21% starting 1 April 2022. These measures are intended to help taxpayers cope with the rising cost of energy.

Adjustments to Thresholds for Small Taxpayers

As from 1 January 2022, the threshold to be qualified as a small taxpayer for VAT purposes in Poland is PLN 5.513 million (EUR 1.2 million). For agents and commissionaires, the threshold is PLN 207,000 (EUR 45,000).

Introduction of VAT Grouping Regime

As from July 2022, Poland will allow the creation of VAT groups subject to certain conditions. A VAT group must maintain its composition during its existence, be established contractually for at least three years, and be registered for VAT purposes.

Reduced Fuel Taxes to Counter Higher Energy Costs

The Portuguese Government has announced that it will reduce the fuel tax charged on the acquisition of petrol by 1.7 cents per litre and diesel by 2.4 cents per litre to tackle the rising cost of energy. The Portuguese Government intends to periodically adjust the fuel tax reduction in response to changing energy prices.

Donations of Goods and Services Free of VAT for Humanitarian Aid to Ukraine

The Romanian Government has ruled that certain goods and services supplied free of charge do not fall under the deemed supply rules from a VAT perspective. The Emergency Ordinance provides that goods and services supplied free of charge as humanitarian aid are considered, from a VAT perspective, to be supplied within sponsorships or patronage actions and they are not considered supplies of goods and services under the deemed supply rules. This measure is applicable from 8 March 2022 to 31 December 2022.

Continuation to Apply VAT Exemption Threshold to Small Businesses

Slovenia was authorised by the European Council to apply a VAT exemption to persons whose annual turnover is no higher than EUR 25,000 or the equivalent in national currency. Slovenia may now increase that VAT registration threshold to EUR 50,000 for more small businesses to benefit from the exemption. This measure is applicable from 1 January 2022 until 31 December 2024.