Versions of the Catalogues for CFDI 3.3 and 4.0

The Mexican government (SAT) has updated its catalogues for versions 3.3 and 4.0. Taxpayers should use these new catalogues to issue their e-invoices. 

The versions can be accessed via the following links: 

Version 3.3:  

http://omawww.sat.gob.mx/tramitesyservicios/Paginas/documentos/catCFDI_V_33_27072022.xls 

Version 4.0  

http://omawww.sat.gob.mx/tramitesyservicios/Paginas/documentos/catCFDI_V_4_27072022.xls 

Of particular significance is the increase of information in relation to the c_NumPedimentoAduana catalogue, which should be noted by taxpayers.  

Proposed tax reform changes

A new government took place in Colombia from August 2022 and perhaps inevitably, taxation will feature heavily in the proposed new agenda. 

The new government has already touted several new fiscal-related proposals.  

In 2021, Colombians were able to enjoy a ‘three-day holiday’ from VAT, where certain products were exempt from VAT. However, a repeat appears to be under threat from the new government as it looks to abolish the three-day reprieve. 

Amongst others, more social fiscal measures are proposed, including establishing a new tax for sugary drinks and certain processed foods; an increase in carbon tax emissions and the establishment of new environmental taxes, serving a distinctly new societal agenda. 

Tungsten Network is monitoring developments in Latin America and is committed to cascading meaningful e-invoicing developments in the country. 

Easing of compliance rules

In July, we communicated on Bolivia’s swift acceleration of its e-invoicing mandate.  

The Bolivian Tax Authorities have now published what will certainly be welcome news for taxpayers- the easing of some its compliance regulations, further to Law No. 1448, dated 25 July 2022 in the Official Gazette 

Significant changes include:  

  • An extension of the time limit to pay outstanding tax amounts without a penalty from 10 days to 20 days 
  • The penalty for unpaid tax obligations will be reduced to from 100% of the unpaid tax to 60% of the unpaid tax. 

Information about Bolivia’s e-invoicing mandate can be found here. 

New technical specifications

The Revenue Agency in Italy has announced a new version of the Technical Specifications (1.7.1) for electronic e-invoicing in Italy. 

These are applicable from 1st October 2022.  

The Technical Specifications are regularly updated with a view to improving the e-invoicing process, as well as highlighting changes to the invoice layout, amongst other modifications. 

 

Changes to the Technical Specifications include the introduction of a new document type (TD28), relevant for purchases from San Marino, as well as the completion of a new field for certain transactions exempt from stamp duty. 

 

Tungsten Network is analysing the changes to ensure we are compliant with version 1.7.1 of the new technical specifications from 1st October 2022. 

Anti-inflationary shield 2.0

Poland introduced the anti-inflation package to reduce the VAT burden on taxpayers. We communicated last month these measures had been extended until 31st October 2022. 

The Council of Minister has now extended the measures to the end of the year. 

Increase in the VAT registration threshold

Countries are continually reviewing their fiscal structures for multiple reasons. This can be in response to the specific current economic climates, such as rising inflation, or for other commercial or cost-effective reasons.  

Various countries are increasing the VAT threshold, reducing the scope of taxpayers obligated to register for VAT. We saw this in Bulgaria last month.  

Sweden has become the latest country to increase the VAT registration, in line with the following from 1st July 2022: 

 

  • 30,000 SEK to 80,000 SEK 

 

Increasing the VAT registration threshold will remove the need to charge VAT and submit regular tax returns for several taxpayers.  

Further expansion of the Fully Digitized e-fapiao

As announced by the Chinese State Tax Administration (STA), the scope of recipients for fully digitized e-fapiao will be extended to 15 more provinces from 28 August 2022. In other words, all taxpayers in China are now able to receive fully digitized e-fapiao issued by pilot taxpayers from Guangdong, Shanghai, and Inner Mongolia.  

Additionally, a new feature has been added to the national e-portal, which enables pilot taxpayers to issue the fully digitized e-fapiao in batches by uploading the invoice data in a standardized Excel file. 

Fully digitized e-fapiao has the same legal effect as paper fapiao and standard e-fapiao, with the originals required to be stored in China for 30 years. 

Impose Sales Tax on imports of low value goods

The Malaysian parliament has passed the Sales Tax (Amendment) Bill 2022, which introduces the taxation of low value goods sold online and imported to into Malaysia.  

Currently, taxes are not imposed on imports of low-value goods (RM500). It results in an unfair treatment of local traders since local produced goods are subject to sales taxes. 

As of 1 Jan 2023, 10% of SST (Sales and Service Tax) will apply to low valued goods (LVG) sold online and imported into Malaysia by vendors based in or outside of Malaysia. The Minister of Finance will determine low-value goods based on the class and price of goods, and the channel used to import the goods into Malaysia.  

GST on imports of low valued goods 

As of 1 Jan 2023, Singapore will implement GST on imports of low-value goods and non-digital services. The purpose of taxing low-value goods is to level the playing field between overseas and domestic vendors, also ensuring a fair and resilient GST system. 

Overseas suppliers who sell low-value goods (S$400 or less) to customers in Singapore must register GST with Singapore’s Overseas Vendor Registration (OVR) if the business:  

  • has an annual global turnover exceeding S$1 million; and 
  • makes B2C supplies of low-value goods to Singapore exceeding S$100,000.  

For more information, please refer to the e-Tax Guide.  

Release of new e-invoice schema

The Uruguay Tax Authorities (DGI) have released an updated version of the e-invoice XSD schema – version 1.4.2.1. This replaces version 1.4.2.0.

The new schema is available for download via the following link:

https://www.efactura.dgi.gub.uy/files/xsds_fe_1_42_1-zip?es

The testing phase of the XSD Schema supporting the country’s electronic invoice mandate will start from 1 October 2022. Changes will enter into production on 1 November 2022.

More information is available on the following website:

https://www.efactura.dgi.gub.uy/principal/ampliacion_de_contenido/documentos-de-interes?es

Deadline for transmission of electronic invoices and receipts extended

Following Emergency Decree No. 113-2021, the Peruvian government issued a new Emergency Decree No. 016-2022, which again postpones the deadline of four days again.

The deadline for transmission of e-invoices and fee vouchers has now been extended until December 31, 2022. Taxpayers should issue their e-invoice within 4 days from the day of issuance to the purchaser and transmit it to the National Superintendency of Customs and Tax Administration (SUNAT).

As from 1 January 2023 taxpayers should issue and transmit their e-invoices in one day (counted from the next day of issuance, and 2 days if the same day of issuance is taken into consideration).

VAT in the Digital Age – public consultation published

We previously communicated that the European Commission was busily engaged with a public consultation on the ‘VAT in the Digital Age’ initiative. The underlying aim of the initiative, as the name suggests, deals with how the EU’s fiscal, and specifically VAT rules, can be adapted alongside a more digitised working mechanism, and how technology can circumvent tax fraud, which in turn will reduce VAT gaps. It is hoped that a digitised platform can counter these problems and output a streamlined, automated and efficient working mechanism, coupled with cost benefits.

The public consultation covered multiple facets of the vision to fully digitise VAT.

On a high level, the following observations were collated during the public consultation:

  • Most stakeholders negatively regard the current Digital Reporting Requirements (DRRs), implying that reform is a necessity
  • Progress in the digitisation era is regarded slow, and EU intervention is paramount to accelerate progress in this area.

In terms of requisite action:

  • Most stakeholders supported the introduction of EU level DRRs for intra-community transactions, with or without the inclusion of domestic transactions.

Clear consensus was not reached on the following issues:

  • Recording data on VAT transactions in a standard digital format
  • Adopting non-binding commission recommendations to introduce uniformity regarding reporting obligations across the EU
  • Removing the requirement for Member States to request an explicit derogation for the introduction of B2B e-invoicing mandates.

The following specific issues were highlighted by respondents during the public consultation:

  • Member States applying different VAT treatments, ranging from different rates, different treatment of electronically supplied and intermediary services, to different thresholds for the application of VAT to SMEs
  • Problems with either double-taxation or non-taxation
  • Problems concerning the definition of supplies, the status of the supplier and customer, and the place of supply
  • Problems attributable to platform providers, for example, due to a lack of appropriate invoicing from their side, or the application of an erroneous VAT rate.
  • Problems when dealing with non-EU counterparts, such as uncertainty over whether VAT should be applied, and if so, what rate this would be.

While the virtues of the One Stop Shop (OSS) and Import One Stop Shop (IOSS) were not extolled, it was acknowledged that these implementations have enjoyed moderate successes. OSS specifically allows online businesses to report certain B2C EU supplies in a single Member State. Similarly, the IOSS allows a taxable person to register in a single Member State and pay VAT on imported goods. Both schemes endeavour to reduce the compliance burden on taxpayers.

The schemes were commended for the following:

  • minimising the need for businesses to hold multiple VAT registrations
  • simplifying and facilitating VAT compliance
  • reducing fraud and increasing VAT revenue
  • modernising the VAT rules.

In terms of policy options:

  • The strongest agreement among stakeholders was for the option to extend the OSS to cover all B2C supplies of goods and services by non-established suppliers. Only slightly less respondents agreed with extending the OSS to intra-Community supplies and acquisitions of goods, and to B2B supplies of goods and services, together with the introduction of a deduction mechanism into the OSS.
  • More than half of responses were in favour of making the reverse charge available for all B2B supplies conducted by non-established suppliers, and with removing the 150 Euros threshold for the IOSS.
  • However, the option of making the IOSS mandatory, either for all distance sales of goods above a certain threshold or for marketplaces only, did not have majority agreement.

The Commission’s summary report on the consultation can be accessed via the following link:

https://circabc.europa.eu/ui/group/cb1eaff7-eedd-413d-ab88-94f761f9773b/library/caee6205-b1d0-4705-8f64-213f4050e06a

A list of more detailed reports can be found below:

  • Final report. Volume 1, Digital reporting requirements
  • Final report. Volume 2, The VAT treatment of the platform economy
  • Final report. Volume 3, Single place of VAT registration and import one stop shop
  • Final report. Volume 4, Consultation activities.

All reports can be downloaded from the following website:

https://op.europa.eu/en/publication-detail/-/publication/a07ffdc4-0966-11ed-b11c-01aa75ed71a1/language-en

Reporting rules for digital platforms

We recently communicated that the UK government was undergoing a public consultation relating to reporting rules for digital platforms. This was expected to provide a complex and detailed insight into the envisaged legislation relating to digital platforms.

The public consultation has now concluded. As previously indicated, the response is detailed and can be found here.

VAT registration threshold increase

There are multiple reasons why a country may want to increase its VAT registration threshold. In June, we communicated that the Bulgarian government raised the VAT registration threshold to combat rising inflation.

The Czech government is proposing a bill to double the VAT registration threshold by a sizeable margin- from CZK 1 million to CZK 2 million (c. 85,000 Euros) per annum. The European Council has provided permission for the Czech government to raise its VAT registration threshold.

If successfully implemented, this would take effect from 1st January 2023 until 31 December 2024.

The threshold does not apply to non-resident businesses, who must register immediately if providing certain supplies.

Increase in stamp duty deferment threshold for e-invoices

The Italian tax authorities have introduced some changes relating to the stamp duty deferment threshold for e-invoices.

Semplificazioni Law Decree no. 73/2022 states that for e-invoices issued with effect from 1 January 2023, the threshold for deferment of payment of stamp duty for the first two quarters of the year will be raised from 250 Euros to 5,000 Euros. This will affect the timeframes within which stamp duty can be paid.

Provided the amount related to stamp duty on electronic invoices issued in the first quarter does not exceed 5,000 Euros, it can be paid within the deadline for the payment of the second quarter liability (i.e. 30 September).

If the amount relating to stamp duty on electronic invoices issued in the first and second quarters does not exceed 5,000 Euros, it may be paid by the deadline for payment of the third quarter liability (i.e. 30 November).

Extension of reverse charge on specific supplies

In addition to e-invoicing mandates, countries deploy a range of complementary measures which serve to reduce tax evasion and by extension reduce the VAT gap. VAT gaps are defined as the projected amount of revenue a government is expected to receive against the actual amount of VAT-related revenue collected by the government. This has been, and continues to be, a perennial problem across Europe which the introduction of e-invoicing mandates seeks to address.

The reverse charge is one such complementary mechanism designed to circumvent the difficulties posed by VAT gaps. The reverse charge shifts the onus of paying the VAT to the customer rather than the supplier. This in turn means that suppliers cannot charge VAT on an invoice and knowingly avoid paying VAT after having received payment from a customer.

Romania has extended the reverse charge mechanism on the following products:

  • A variety of foodstuffs
  • The exchange of certificates for greenhouse gas emissions
  • The issuance of green certificates
  • The delivery of integrated circuit devices

Romania has one of the highest VAT gaps in Europe, with an astonishing 34.9% of VAT unaccounted for in 2019. It is no surprise that governments continue to advance supplementary measures in addition to e-invoicing mandates to thwart substantial VAT gaps.