August 2021: 11 quick VAT updates

In our latest round-up of the weird and wonderful VAT changes to be made by tax authorities around the world, we’re covering everything from online piano lessons to parking at festivals.

We recommend sharing these snippets with your team to ensure you’re not leaving anything behind when it comes to accurately determining your tax liabilities.

Indonesia

President Joko Widodo delivered the 2022 Budget speech this week and reaffirmed the need for the country’s tax system to be reformed. Although no further details were announced, measures revealed by the Finance Minister in June included increasing the standard rate of VAT from 10% to 12%, introducing varied rates of 5% to 25% and removing most exemptions.

Czech Republic

State entities, charities and rescue services will remain exempt from customs duties and VAT on imports of goods required to deal with Covid-19 until 31^st December 2021 after a new extension was announced.

Pakistan

A new notification published this week has confirmed an exemption from sales tax on all medical and testing equipment related to the ongoing Covid-19 pandemic. It will apply retrospectively from 9^th July 2021 and remain until 31^st December 2021.

Germany

Following the recent devastating floods in western Germany, several federal states have extended the deadline for submitting annual VAT returns to 31^st October 2021.

Spain

The proposed new plastic tax in Spain will face a further delay as a new draft bill is sent through parliament for approval. Industry insiders believe the tax may not come into effect until early 2022.

Poland

Poland has introduced a zero VAT rate on books – a move the European Commission does not currently agree with. However, the commission is working on VAT reform and it is thought that under new rules books would be among a small list of items that member states will be allowed to zero-rate.

Austria

Austrian tax authorities have confirmed the temporary VAT rate of 0% on protective masks has been extended until 31^st December 2021.

Belarus

A list of specific food items has been released that will now attract a lower rate of VAT of just 10%, down from 20%.

Germany

A recent case within the 5^th Senate of the Munster Finance Court has ruled that online piano courses are not subject to Germany’s reduced rate of VAT.

Canada

Canada’s new 3% tax on digital services will not be applicable to TV streaming service Netflix.

Netherlands

Parking at a festival has been deemed by an Amsterdam court to be an ‘independent achievement’ and is therefore not subject to reduced VAT. Instead, the standard VAT rate will apply.