BDO Indirect Tax News - Issue 3/2024

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BDO Global Office

The ministers of the 27 EU member states failed to reach political consensus on the VAT in the Digital Age (ViDA) proposals due to Estonia’s objections to the proposed measures on the platform economy. It will now be up to the Hungarian presidency of ECOFIN to try to close the gap and come up with a compromise agreement that all member states can get behind. One of the main tenets of ViDA is standardised e-invoicing and reporting and there have been other e-invoicing-related developments around the world in this area:

  • Germany has finalised its plans to introduce mandatory e-invoicing for B2B transactions starting in 2025, with transitional rules applying through 2027.
  • A consultation is being held in Latvia on a proposal to require businesses to issue e-invoices in B2B transactions starting in 2026.
  • The e-invoicing rules in Malaysia are reviewed.
  • Nepal has proposed the introduction of mandatory e-invoicing.
  • The application of a mandatory centralised e-invoicing system in Poland has been postponed to 1 February 2026 (from 1 July 2024).
  • Mandatory e-invoicing for B2C transactions will become effective in Romania on 1 January 2025.
  • Singapore has announced a phased adoption for certain businesses of InvoiceNow, an initiative that facilitates the direct transmission of e-invoices in a structured digital format from one finance system to another.
  • As from 1 July 2024, VAT-registered taxpayers in Zambia must issue e-invoices using the "smart invoice" system.

Several interesting decisions have come out of the CJEU in the areas of voucher classification, whether a subsidiary can constitute a fixed establishment for VAT purposes and the VAT treatment of the supply of electricity between for EVs.
 
Spain’s Supreme Court has agreed to hear a case involving the VAT deductibility rules as they apply to a holding company when it sells shares of a subsidiary to another group company, an issue that has been contentious and led to different tax treatments.

In this edition: 

  • European Union: Still no agreement on VAT in the Digital Age proposals
  • Germany: Mandatory e-invoicing: What you need to know!
  • Belgium: Latitude granted for notification requirement applying to mixed and partial VAT taxpayers
  • Brazil: Indirect tax reform: Now is the time to prepare!
  • Canada: GST/HST recovery opportunity for builders of residential rental properties
  • China: New customs law adopted
  • Denmark: Supreme Court rules on abuse of VAT rules through intragroup transactions
  • European Union:
    • CJEU rules again on when a subsidiary can be considered a fixed establishment
  • France:
    • CJEU rules on VAT treatment of single-purpose and multi-purpose vouchers
    • Advocate General opines that card/app provider makes supply of goods for VAT purposes
  • International: Indirect tax bytes
  • Italy: Reciprocity agreement with the UK will facilitate VAT refunds for businesses
  • Malaysia: Guide to e-Invoicing in Malaysia: Everything You Need To Know
  • Norway: Rules governing repayment of deducted VAT on purchase of passenger vehicles revised
  • Romania: E-invoicing for B2C transactions
  • Singapore: New InvoiceNow Requirements for GST-Registered Businesses
  • Slovak Republic: Tax on sweetened beverages planned for 2025
  • Spain:
    • Supreme Court to rule on VAT treatment of mixed holding companies and the transfer of shares
    • Tax authorities rule on VAT treatment of services provided by partners and administrators
  • United States:
    • Sales tax implications of cross-border intercompany fees
    • DHS Announces 26 New Additions to the UFLPA Entity List

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