HMRC has announced some new VAT fuel scale charges applying from 1 May 2022. These can be found via the following links:
VAT road fuel scale charges from 1 May 2022 to 30 April 2023 – GOV.UK (www.gov.uk)
https://www.vatupdate.com/2022/04/23/new-vat-fuel-scale-charges-from-1-may-2022/
A few months ago, we oversaw Poland applying greater autonomy to determine their own VAT rates.
More recently in Switzerland, we can see how the economic measures a country enacts can have a significant effect on the VAT rates a country deploys.
In December 2021, the Swiss Parliament approved the AHV (Old Age and Survivors Insurance) 2021 reform. The measure aims to maintain AHV benefits- but this will come at a cost. Specifically, to meet additional costs for this measure, an increase in the VAT rates has been proposed.
The VAT rate increases are expected in line with the following:
A referendum is expected in autumn 2022 to approve these rates. If approved, these are expected to take place in 2023.
Tungsten Network will monitor any new tax rates, if approved, in Switzerland and ensure these are implemented as part of our portal solution.
Croatia is following the overwhelming trend both in Europe and beyond to reduce VAT rates on specific supplies. These aim to lower the tax burden on Croat citizens – which is unsurprising given the current inflation, culminating in rising living costs.
The Act on amendment of the Act on the Value Added Tax was published in the official Gazette, No. 39/2022 on 30 March 2022.
The amendments provide a detailed oversight of the main changes outlined by the Croatian government; these can be summarised as follows:
Tungsten Network supports all valid VAT tax rates in Croatia.
The recurring trend for the reduction in VAT rates for energy and gas continues unabated across Europe, considering rising inflation and the post-Covid economic recovery.
Ireland is no exception- and the Irish Ministry of Finance has announced a VAT reduction from 13.5% to 9% to take effect from 1 May 2022. This is expected to run until 31 October 2022.
VAT reductions often prove to be costly – and in Ireland, the reduction in VAT rates for energy and gas will come at a cost of 46 million Euros to the government.
In addition to rising inflation, it is likely the measure was introduced to counteract the carbon tax, which is also commencing on 1st May 2022. Such measures serve to demonstrate that VAT must be viewed as part of a greater intricate framework of taxes within the fiscal structure rather than a tax in isolation and underlines the challenging role of the government to balance and manage the effects of taxation.
Further 200 medicines will be exempt from VAT following the approval of Revenue Memorandum Circular 68-2022 by BIR. These medicines are utilized for the treatment of hypertension, cancer, mental illness, tuberculosis, kidney disease, diabetes and high cholesterol, in addition to other COVID-related medicines and medical devices.
The BIR has published the full list of exempted medicines on its official website.
Inflation is soaring worldwide due to Covid and the Russian-Ukrainian conflict; the situation in Bahrain is no different.
10 Bahraini MPs, led by Mahmood Al Bahrani, have put forth an urgent proposal to tackle the burden of inflation on the nation. The proposal suggests suspending the 10% VAT temporarily as well as doubling the anti-inflation allowances for Bahrainis. “Inflation has hit the world hard, and today’s prices are threatening global economies”, Mahmood AI Bahrani added.
The proposal will be forwarded to the Cabinet for further reviews.
Inflation continues to bite in many European countries. Latvia is no exception – and has been forced to address its fiscal operations considering this.
To this effect, the Latvian Parliament is considering a VAT reduction on basic foodstuff to 5%.
If passed in Parliament, this VAT reduction is expected to come into force on 1st July 2022 and last for some duration- until 30 June 2024.
Rising inflation across Europe has forced many countries to assess the deployment of VAT rates, particularly in relation to energy.
Netherlands is no exception, and a combination of socio-economic factors has meant that the government has addressed ways it can compensate low- and middle-class families affected by rising costs.
To this effect, the VAT on energy will be reduced from 21% to 9%.
As globally we turn to what many regard a new stage in the pandemic, a post-Covid economic recovery period of sorts, several countries are still enacting VAT-related measures to strengthen their economies after a tumultuous 2 years.
The Finnish Parliament has passed Bill No. 8/2022, which effectively extends the temporary VAT exemption for domestic sales of goods and intra-EU purchases of goods which are used to treat or prevent coronavirus, including testing.
This extension is expected to last until June 2022.
The extension of the reduced VAT rate for catering, transport, gyms, cinemas and theatres is due to expire in June 2022. However, the Greek government has proposed that this be extended. A precise date has not yet been confirmed.
However, the costs of such an extension have been laid bare- to accommodate the extension, the Greek government will need look at other areas of the budget to make up the shortfall, amounting to around 250 – 300 million Euros.
Such figures offer an insight into the often-drastic financial costs governments are incurring in their fiscal-related measures, and the ramifications on budget planning.
The Norwegian Ministry of Finance has extended the VAT exemption applied to electronic news services until 2028, via press release No.14/22. This exemption was first introduced in 2016 and provided parity between news relayed on paper and electronically.
It is hoped that the extension will serve to increase consumer appetite for news and current affairs.
Recent events in Ukraine has led to a surge in energy and electricity prices.
To this effect, the Irish government will cut VAT on electricity and energy from 13.5% to 9%.
This will take place from 1 May 2022 to 31 October 2022 and is estimated to come at a cost of 46 million Euros.
We communicated in 2020 that the UK has reduced its VAT rate for the hospitality sector from 20% to 5%.
From 1st April 2022, the VAT rate will revert to 20%, fuelling the indication that the United Kingdom is entering a post-recovery era of the pandemic.
Rising electricity costs has been linked to the re-opening of the economy after Covid- 19. Recent events in Russia / Ukraine has also meant that supplies of natural gas from Russia have been interrupted.
The Spanish tax authorities have responded to rising costs. The reduction in the VAT rate for electricity to 10% will be extended to 30 June 2022. At this point, the rate will revert to 21%.
Several countries have adopted EU legislations into their own respective domestic tax codes and regulations. Such integrations serve a dual purpose: not only are domestic tax regulations aligned with EU regulations, but these allow the opportunity to provide greater harmonisation with the wider EU community.
The French Senate has adopted a draft bill 559 to this effect.
Amongst the provisions in this bill include the proposal for additional consumption taxes on electricity and energy.
Crucially, France also intends to implement the requirements relating to the EU’s shared VAT system into its own domestic tax legislation.
Romania had previously exempted all imports of goods required to combat Covid-19 from the obligation to charge VAT. This was due to expire last year.
However, Romania has sought permission from the European Commission to extend this facility, which has now been granted.
As such, the draft order prepared by the Ministry of Finance extends the VAT exemption of imports for goods required to combat Covid-19 until 30 June 2022.