BDO Indirect Tax News Issue 2 – April 2024

The April ITN kicks off with two lead articles: the complex U.S. state tax considerations for companies operating in the life science sector and the recent increase in the rate, and expansion in the scope, of Malaysia’s service tax.

Various courts have been active in the indirect tax space:

• Germany: The CJEU has been asked to rule on the compatibility of the real estate transfer tax with EU law.
• India: The constitutionality of the provisions in the GST Act that require suppliers of goods and/or services to pass on any benefit of a reduced GST rate to the consumer is before the Supreme Court.
• Netherlands: An Advocate General of the CJEU has opined that certain Dutch pension funds are not sufficiently comparable to collective investment vehicles and thus do not qualify for the VAT exemption for asset management services.
• Spain: The Supreme Court has ruled that the provision of a company car to an employee free of charge is not subject to VAT.

The French tax authorities have clarified that the VAT rules applying to NFTs (nonfungible tokens) will be based on the general VAT rules applicable to the underlying transaction as if an NFT was not involved. Italy has tightened its rules on VAT representatives and Japan has tightened the consumption tax rules, both in an effort to combat tax avoidance. The Philippines government has proposed VAT compliance obligations on nonresident digital service providers that would require such providers to assess, collect and remit VAT on transactions through their platforms. Meanwhile, South Africa intends to revise its rules on nonresident vendors to ease administrative burdens.

E-invoicing continues to gain momentum, with more countries moving forward with mandatory e-invoicing requirements or tinkering with existing rules. See the updates from Belgium, Bulgaria, France, Germany, Israel, Malaysia, Namibia, Poland, Romania and Zambia.

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