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The Slovak National Council adopted an amendment to the VAT Act, which will come into force on 1 January 2025. This reform provides for a number of adjustments: The standard VAT rate will increase from 20% to 23%. The current reduced rate of 10% will be replaced by a new rate of 19%. The second reduced rate of 5% will remain unchanged. Regarding the supply of goods, it is the day that the purchaser acquires the right of disposal as the owner of the goods that determines the applicable VAT rate. If the ownership of the goods is transferred by the 31st of December 2024, the rate of 2024 will apply even if the invoice is issued after the 1st of January 2025. The tax liability regarding the supply of services, is the day the service is supplied. A service rendered before the 31st of December will be charged with 2024 VAT rate even if the invoice is issued after the 1st of January 2025. The VAT liability on advance payments is the day the payment is received. Here are a few examples of products affected by these new measures: Basic’ food products (butter, cheese, milk, bread, fruit, vegetables, certain meats and fish) will see their VAT rate fall from 10% to 5%; Other food products will fall from 20% to 19%; Medicines and medical devices will now be taxed at 5%, instead of 10%; Electricity will also be taxed at the reduced rate of 19%, compared with 20% previously; Books will be subject to the new general rate of 23% (instead of 10%); Catering services offering alcoholic beverages will also move to 23%; Catering services including non-alcoholic beverages will be taxed at 19% instead of 10% (with, in addition, the introduction of a tax on sweetened non-alcoholic beverages on the same date); Other restaurant services will benefit from a reduction from 10% to 5%. Source: https: //https://lnkd.in/epQMSA6k (Slovak National Council website) For any further information, please do not hesitate to contact our tax experts! #vatrate #update #slovakia

The Slovak Government is planning changes in the VAT rates in the next year: The standard VAT rate will increase from 20% to 23%. The reduced VAT rate will increase from 10% to 19%. The 5% VAT rate will remain the same. Basic foodstuffs with a VAT rate of 10% will reduce to 5%. Some rate restructuring is being considered for the below: * Energy; * Medicines; * Textbooks; and * Accommodation and services in the tourism industry.

Looking for clarity on VAT rates for food and drink services in #Portugal? 🇵🇹📝 Circular No. 25019 sheds light on the recent changes outlined in Portugal's 2024 State Budget Law. Here's what you need to know: 1️⃣ Intermediate VAT rate: Food and beverage services, excluding alcoholic beverages and soft drinks, are subject to the intermediate VAT rate (13% in mainland Portugal, 12% in Madeira and 9% in the Azores). 2️⃣ Mixed orders: If a commercial invoice contains both food/beverages and alcoholic beverages or soft drinks, the former are subject to the intermediate VAT rate and the latter to the standard rate (23% in mainland Portugal, 22% in Madeira and 16% in the Azores). 3️⃣ Clarity of invoices: For proper taxation, invoices must list items subject to different tax rates. This means detailing: ➡ Quantity and description of goods/services ➡ Net price, applicable tax rates, and tax amount ➡ Total price, including tax at applicable rates Businesses should ensure that their invoices comply with these guidelines to avoid VAT confusion. Stay informed, and stay compliant! For more info, visit our #FiscalPortal! #VAT #VATrates #PortugalVAT #TaxationUpdate

The Finnish Government has just announced to raise the standard VAT rate from 24% to 25.5%. Under this plan, candies would no longer enjoy the reduced VAT rate of 14% for food items, instead falling under the standard VAT rate. This could reignite debates on the definition of 'candy', personally not yet forgotten from the sweets tax era of 2011 to 2016. The Government's aim is to implement this change within the current year, although no final decision has yet been made. Last year, it was announced that the reduced VAT rate of 10% would be discontinued, except for newspapers and periodicals, with the rate for other goods and services currently at 10% going up to 14%. The timeline for these adjustments remains uncertain.

Finland On May 30, 2024, the Finnish government introduced a bill to parliament proposing an increase in the standard VAT rate from 24% to 25.5%. This adjustment is set to take effect on September 1, 2024. Lithuania Lithuania is also undergoing changes to its VAT regulations. On April 19, 2024, a bill (Reg. Nr. XIVP-3658) was submitted to the Seimas, proposing amendments to the VAT Law, specifically Article 19, Paragraph 3, Clause 6. The proposed changes focus on reducing the VAT rate for catering services and takeaway meals provided by restaurants, cafes, and similar establishments to 9%. If approved, this reduced rate will come into force on July 1, 2024, and will remain effective until the end of 2027. Slovakia In Slovakia, a draft act was submitted on April 17, 2024, to the National Council, proposing a temporary reduction of the VAT rate on fuels. The bill seeks to introduce an 8% VAT on gasoline and diesel, a notable decrease from the standard rate. This temporary measure is planned to be in effect from July 1, 2024, to December 31, 2025. Vietnam Vietnam is considering an extension of its current 8% VAT rate until the end of 2024. The government is actively summarizing and evaluating the impact of this reduction and plans to report the findings to the National Assembly. This step is crucial for the timely consideration and potential implementation in the latter half of 2024.

The term for applying a zero VAT rate to supplies of certain food products - bread and flour - has been extended to 31.12.2024. However, the preferential tax treatment is not to be maintained for other supplies which have so far benefited from a reduced VAT rate - e.g. services for the use of sports facilities, general tourist services and excursions with occasional coach transport, to which the general VAT rate of 20% will again become applicable. https://lnkd.in/dc4b52Q5

🚨 New working paper 🚨 “A Temporary VAT Cut in Three Acts: Announcement, Implementation, and Reversal”! Many governments have used VAT cuts to alleviate the rising costs of living. In this paper, we look at the pass-through of VAT cuts to consumer prices using the recent zero VAT policy in Portugal in a set of food items in 2023. Using daily online retail prices, we compare prices of zero VAT food items with the other food items and find that: ➡ Prices rose by ~1% upon announcement ➡ Pass-through was almost complete when the policy was implemented ➡ Pass-through was ~70% at the reversal The paper is joint work with my amazing co-authors Tiago Bernardino, Ricardo Duque Gabriel and Márcia Silva Pereira. Paper here: https://lnkd.in/deyxURSt Slides here: https://lnkd.in/drcg58Qi

This report on VAT as a policy instrument to increase consumption of fruits and vegetables contains lots of food for thought 🥕 The report –prepared by the Danish Ministry of Taxation– explains the background to the policy debate on differentiated VAT; the VAT system in Denmark and other EU countries; and administrative consequences. The report then goes on to look at the potential impact of a reduction in the VAT rate on fruits and vegetables – starting with the critical assumption that the reduction will fully benefit consumers. The report acknowledges some of the trade-offs (e.g. complexity, costs and burdens, compliance) involved when using the tax system as a policy vehicle and will no doubt contribute to a more informed debate on differentiated VAT in Denmark. An apparent weakness of the report, however, is that it does not include reference to research demonstrating that reduced VAT rates often end up not fully benefiting consumers, which may hide the true costs of the policy instrument or undermine its viability altogether. I am interested in learning more about international experience with differentiated VAT: 👉 To what extent (and in what circumstances) does it end up benefiting consumers and achieving its stated policy purposes? 👉 What research is available that might shed further light on these issues? 👉 What are other issues to look out for? The report unfortunately is available only in Danish, but running it through a translation engine should make its main findings accessible for those with a deep interest in the subject. #dkpol #taxpolicy #taxdesign #fiscalsystems Skatteministeriet Rita de la Feria

It seems that there is some ambiguity in the gst law regarding the availability of input tax credit in case where the supplier charges 5% gst rate on catering services i.e input tax credit of the goods or services used in supplying the said service will not be available where the supplier charges 5% gst rate on catering services However, on the other hand, the proviso to section 17(5) states that ITC in respect of outdoor catering services or food or beverages will be available where the inward supply of such service is used for making taxable supply of same category of goods or services or as. element of composite or mixed supply. It seems strange that the proviso stipulates that the input tax credit of outdoor catering services in respect of same line of business will be available to the supplier while the notification puts a bar on it clearly citing that credit is not available at all irrespective of the fact whether the person supplying such service is engaged in same line of business or not. In such kind of scenarios, can we take the input tax credit relying on the proviso itself or not take the input taxcredit as the notification itself bars the input tax credit ?. Views are highly welcomed.

#VATratechanges 10 VAT rate changes due on 1st January 2025 New Year’s Day is typically one of the busiest days of the year for rate changes and 2025 is shaping up to be no different. Here’s quick round-up of 10 VAT rate changes already pencilled in for 1st January: #Indonesia Indonesia’s VAT rate is set to increase to 12% on 1st January. Chief Economic Minister Airlangga Hartaro confirmed the move as part of the draft 2025 state Budget. #Finland A number of goods and services will be reclassified from 1st January and different VAT rates will apply. Items such as hotel services, pharmaceuticals, public transport and books will rise from 10% to 14%. #Spain The temporary zero-rating of a range of basic foods is set to end. Items including bread, flour, eggs, milk, fruits and cereals have been subject to a 0% rate since Spanish authorities introduced it to tackle rising inflation. On 1st January, VAT on these foods will rise to 4%. #Vietnam The Vietnamese government’s 2% rate cut on some essential goods, first introduced in February 2022, is due to expire at the end of 2024. It means the rate should return to 10% (rather than the current 8%) from New Year’s Day. #Germany Sales of artwork will be subject to VAT a new, lower rate of 7% from 1st January. This is down from the current rate of 19% and reverses an earlier rate hike made in 2014. #UK The VAT exemption on private education is set to end, with VAT at 20% applicable from 1st January. The new legislation will apply to all pupils of compulsory school age. This will make the UK one of relatively few countries to make private education subject to an indirect tax. #Israel Israel’s standard VAT rate will rise from 17% to 18% on 1st January. The increase was approved by parliament in March. #Portugal The VAT cut on basic foods from 7% to 0% is due to expire at the end of 2024. From New Year’s Day, 46 foods including milk, rice, meat and bread will return to the 7% rate. #Slovakia The government has proposed a 3% increase in the standard rate, taking it from 20% to 23%. If approved, it could come into effect on 1st January. #Tajikistan The country’s standard rate of VAT has already been lowered from 15% to 14% and it will reduce again on 1st January to a new rate of 13%.