Compliance Category: Informations sur le taux de TVA/G(S)ST

Proposal to consolidate reduced rates

The volatile economic situation of the past few years has compelled multiple countries to review their fiscal policies. Countries have responded with significant fiscal measures, including modifying standard and reduced VAT rates. Switzerland, for example, is implementing some modifications to its VAT rates in January 2024.

Similarly, the Czech Prime Minister is proposing to make some changes to the VAT rates in the country, through consolidating the two current reduced VAT rates in the country (15% and 10%). The single new reduced rate proposed would be either 13% or 14%. The standard VAT rate of 21% would remain unchanged.

The current proposed timeframe put forward for the implementation of the new VAT rate, like Switzerland, is 1 January 2024.

The Czech Republic is a compliant territory for Tungsten Network. Our e-invoicing solution accommodates all valid VAT rates in the country, and we are closely monitoring any confirmation of the new VAT rate in the country. If confirmed, we will arrange for integration of the new VAT rate as part of our solution.

Tour operator VAT delayed

Germany has delayed the implementation of a VAT obligation on non-residents that sell German travel packages to tourists.  

This was due to take effect on 1 January 2023 but has been delayed to at least 2024. 

Changes to VAT rates in 2023

At the start of the new year, Romania is introducing the following VAT rate changes: 

  • The VAT rate will increase to 9% from 5% for hotel accommodations, restaurant and catering services  
  • The list of good subject to the 9% rate has been modified. 

Romania is a compliant territory for Tungsten Network and we support all valid VAT rates in the country. 

Upcoming VAT tax rate changes

As with multiple countries, the start of the year typically heralds the introduction of new fiscal policies as countries seek to set the platform for the economic trajectory for the year ahead.  

Lithuania is introducing some adjustments to its VAT rates, effective January 2023, in line with the following: 

  • The VAT on e-Books and electronic non-periodical publications will be reduced from 21% to 9%. This will be a permanent VAT change. 
  • VAT on accommodations and admission to artistic and cultural events will be taxed at 9% until 30 June 2023.  
  • VAT on catering and takeaway services will be taxed at 9% until 31 December 2023.  

Lithuania is a compliant territory for Tungsten and we support all valid VAT rates as part of our solution.  

New VAT rate changes

As with several countries at the start of 2023, Norway is introducing some new VAT rate changes, effective 1 January 2023.  

On a high-level, these include the following: 

  • VAT exemptions in place for the sales of electric cars registered from 2023 will be limited to cars up to NOK 500,000. For cars that exceed this amount, the excess amount will be charged at 25%. 
  • The VAT for electronic news services will be repealed.  
  • There will now be VAT on remote services supplied to non-businesses in Norway.  

Norway is a compliant territory for Tungsten Network and our solution accommodates all valid VAT rates in the country.  

End of anti-inflation measures

2022 saw multiple countries deploy fiscal policies to reverse the adverse effects of inflation. While countries across Europe and globally continue to grapple with inflation, some countries are beginning to reverse their fiscal policies in this respect with a view to enhancing their economic position in 2023. 

Tungsten has been following Poland’s anti-inflation measures closely for some months. Many of the fiscal changes enacted here ceased at the end of 2022. 

This means that we can expect to see VAT rates return to their former rates, as seen prior to 1 February 2022, in line with the following: 

  • Natural gas: from 0% to 23% 
  • Electricity: from 5% to 23% 
  • System heat- from 5% to 23% 
  • Motor fuels- from 8% to 23% 

However, as mentioned, some limited measures will remain. For example, we communicated last month that the zero percentage on basic foods will remain in place in Poland.  

Abolishment of certain Covid VAT measures

In transitioning to a post-covid era, multiple countries are reviewing previously enacted fiscal measures to see whether they are still pertinent today. An integral component of the post-covid recovery is the reinstating of VAT rates imposed prior to the pandemic.  

As Covid, or at least its impact, sharply declines globally, several countries are fully reversing fiscal measures ratified during the pandemic. Belgium’s reduced 6% VAT rate for masks, a direct response to the Covid pandemic, expired on 31 December 2022, and the VAT rate for masks will return to their former rate from 1 January 2023, in line with reduced demand.  

Revised tax VAT rates

Bulgaria continues its busy fiscal trajectory alongside lowering its VAT registration threshold this month, through the adopting of the Bill to amend the VAT law. This has introduced multiple VAT rate changes in the country for key services. 

Bulgaria initially implemented several VAT changes in the summer of 2020 as a direct response to the Covid pandemic, where the standard tax rate of 20% was replaced by the reduced rate of 9% for various goods and services. The 9% reduced rate will now also apply to the following: 

  • Catering and restaurant services 
  • Tourism services 
  • Books and textbooks 
  • Certain foodstuffs and supplies 
  • Sports facilities and supplies 

These tax measures are expected to last until December 2023. 

Bulgaria is a compliant territory for Tungsten Network and we support all valid VAT rates in the country as part of our e-invoicing solution.  

Reduction of VAT on purchase of bicycles

Increasingly, we are seeing countries advance environmental and health agendas via the deployment of fiscal measures. Such tax measures, ubiquitous in 2022, are expected to be equally commonplace in 2023, as awareness of ecological and related matters increases.  

Via its 2023 State Budget, Portugal is introducing a reduction in VAT on the purchase of bicycles. In doing so, Portugal becomes the first EU country to enact such a measure. From 1 January 2023, this will be set at the lowest VAT rate possible in Portugal, at 6%.  

Tungsten supports all valid VAT rates in Portugal as part of its solution, including the 6% rate. We are also conscious of the countries intrinsically linking further societal agendas which extend beyond the economy in their tax agendas, and we are investigating how we can integrate these as part of our solution.  

Guidance on temporary reduced notes

We recently communicated that Luxembourg is introducing some new temporary VAT rates, effective 1 January 2023. Tungsten is on track to integrate the temporary rates within our system by this date. 

The Luxembourg Directorate of Registration, Domains and VAT has published Circular No. 812, dated 6 December 2022. This provides guidance around the temporary VAT rates. 

Confirmation of new tax rates

Tungsten has previously communicated on the upcoming proposed Swiss VAT rate increases expected in 2024.  

Switzerland has now confirmed new VAT rates in the country in line with the following: 

Normal rate 7.7% to 8.1% 

Reduced rate: 2.5% to 2.6% 

Special rate for accommodation services: 3.7% to 3.8% 

These will be effective from 1 January 2024.  

Switzerland is a compliant territory for Tungsten, and we will support the new rates in the country once effective.  

Reduced VAT rates for restaurant and catering services

The Slovak government has approved the temporary reduction of VAT for specific restaurant and catering services, effective 1 January 2023 to 31 March 2023. 

The reduced rate applied will fall from 20% to 10%.  

Slovakia is a compliant territory for Tungsten Network and we currently support both rates as part of our solution.