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5 major new tax changes from around the world

With 2021 almost three weeks old, tax authorities around the world have already introduced swathes of new rules, rates and regulations that could affect the way your Finance Team works.

Here are five of the most important new regulations announced in recent days:

1) 3 free zones set for Oman under new VAT regime

Three free zones will be created in Oman to provide special tax treatments once the country’s new VAT system is implemented in April. These have been named as the Sohar, Salalah and Al Mazunah districts. The free zones are expected to provide VAT exemptions for supplies of specific goods and services.

2) Germany changes definition of supply of goods with installation

Germany has revealed it is changing the definition of the supply of goods with installation for VAT purposes. It means overseas businesses may soon have to register for VAT in the country. Previously, the tax authorities deemed that a supply of goods with installation occurred even when a supplier used or assembled goods that were owned by that supplier. Under the new rules, this would no longer be classed as supply of goods with installation. Instead, this definition will apply to goods that are not owned by their manufacturer.

3) Italy announces deferral of Digital Services Tax payments

Businesses in Italy have been granted extra time to make Digital Services Tax (DST) payments and submit returns. The deadline for the payment of DST for the 2020 financial year has been extended from 16th February 2021 to 16th March 2021, while the deadline for filing DST returns for the same year has been changed from 31st March 2021 to 30th April 2021.

4) France changes VAT treatment on yacht charters

French tax authorities have announced a significant change to the way VAT is applied to yacht charters. Previously, the country permitted a lump sum reduction policy of 50% on the taxable base providing a boat spent at least part of the charter in non-EU waters. However, this reduction has now been abolished and businesses that charter yachts will instead be required to charge standard French VAT of 20% while the vessel is located in EU waters. Once it moves out of the EU, no VAT will be applied.

5) New Digital Services Tax introduced in Kenya

Kenya’s new Digital Services Tax has come into effect this month. The tax was passed in September 2020 as part of the Kenya Finance Bill. It means a rate of 1.5% is applied to the gross transaction value on digital services derived or accrued in Kenya.

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