February VAT updates: 12 snippets from the world of indirect tax

Following a spate of new rates and rules introduced at the start of the new year, global tax updates have inevitably been a little slower in the opening weeks of 2023.

Nonetheless, we’ve studied the industry to find 12 of the most important snippets of information that every tax professional needs to know right now.

1) Switzerland

VAT rates will rise on 1^st January 2024 to cover an anticipated deficit in the country’s pension budget. The standard rate will increase from 7.7% to 8.1%, the reduced rate from 2.5% to 2.6% and the special accommodation rate will rise from 3.7% to 3.8%.

2) Spain

A temporary zero-rating of face masks and gloves in the Canary Islands has been extended until 30^th June 2023.

3) Romania

Solar panels for use in residential properties will be subject to VAT at 5% (down from 19%) following  vote by the Romanian parliament.

4) Zimbabwe

The VAT rate in Zimbabwe has been increased from 14.5% to 15%, with the change taking effect from 1^st January 2023.

5) Ireland

A new extension to the zero rate for Covid-19 tests has been announced by the Department of Finance.

6) India

Hospitals that administer the Covid-19 vaccine in India have been advised they are making a composite supply and GSTGoods and Services Tax is therefore applicable at a rate of 5%.

7) Botswana

The temporary reduction of Botswana’s standard VAT rate to 12% (down from 14%) has been extended until 31^st March 2023.

8) Kenya

A new Budget statement by the Kenya Kwanza has set out a priority scheme to reduce the nation’s VAT gapThe difference between the amount of VAT revenue due to a tax authority and the amount actually collected from 38.9% to 19.8%.

9) Germany

German tax authorities could soon be making changes to VAT rates on groceries, with the government reportedly considering VAT reductions as a way to help households combat higher food prices.

10) Italy

The VAT cut on electricity to 5% will remain in place until at least 31^st March 2023 following a fourth consecutive extension.

11) Estonia

The thresholds for Intrastat reporting have increased from 1^st January. The threshold for arrivals now stands at €270,000 per annum, up from €230,000. Meanwhile, it is now due on dispatches once they hit €400,000 rather than the previous level of €130,000.

12) Czech Republic

The Czech Ministry of Finance has suggested the country’s two reduced rates of 15% and 10% are merged into a single rate of either 13% or 14%.