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January 2023: New year tax updates

Despite being just nine days into the new year, there has already been a raft of VAT changes and announcements made across the world in 2023.

Here is our quickfire round-up of 15 of the latest updates every tax professional needs to know.

1) Montenegro

New laws to reduce VAT and simplify procedures for the installation of solar power plants have been approved by the country’s parliament.

2) Bulgaria

The temporary reduced rate of 9% on restaurant and catering services – first introduced in response to the Covid pandemic – has been extended until 31st December 2023.

3) Italy

A reduced rate of 5% will be extended to include district heating services for the first quarter of 2023.

4) Ukraine

IT software is no longer exempt from VAT. As of 1st January 2023, the tax will have to be charged on the supply of all software products.

5) UK

A new penalty regime for late VAT returns came into effect on 1st January. It uses a points-based approach rather than the previous default surcharge system.

6) Lithuania

The VAT rate for electronic books has been cut from 21% to 9%. Meanwhile, the reduced rate of 9% on hospitality, sporting and cultural services has been extended until 31st December 2023.

7) Turkey

A new accommodation tax – set at 2% – has been introduced in Turkey. It applies to all overnight services provided in accommodation settings.

8) Poland

Several reduced rates on fuels will not be extended and therefore came to an end on 31st December 2022. It means the rate for electricity, gas, motor petrol and diesel has now reverted to the standard rate of 23%.

9) Finland

VAT has been cut on train tickets, as well as journeys by bus, boat and taxi. It will be set at a lower level until April.

10) Malaysia

The Federation of Malaysian Manufacturers has suggested GST should be reintroduced in the country in 2024 in place of the current sales and service tax.

11) Uruguay

A new zero rate of VAT will apply to hotel-related services in Uruguay throughout the summer season.

12) USA

Some 34 additional services became subject to sales tax from 1st January 2023. They include vehicle rentals, camping sites and electric car charging.

13) France

A new law in France has seen VAT at 5.5% introduced on electric vehicle charging infrastructure.

14) India

GST at 5% is still applicable on Covid vaccine at hospitals in India after an appeal against the rule by Krishna Institute of Medical Sciences failed.

15) Malta

Plans have been revealed to introduce an 18% VAT on procedures such as botox, teeth whitening and varicose vein treatments.