Latest from the world of tax: 10 updates not to be missed

News from the VAT industry has been dominated by energy in recent weeks. As the price of gas and electricity rises, governments and tax authorities around the world are taking urgent action to support businesses and consumers.

Here are 10 of the rate changes and other updates announced so far this month:

1) Belgium

A reduced VAT rate of 6% will remain in place on gas and electricity and a reform of the excise duties on these goods will take place.

2) Germany

The reduced VAT rate for the hospitality sector, first introduced in response to the Covid pandemic, has been extended until 31^st December 2023. It means VAT will stay at 7% instead of its usual rate of 19%.

3) Poland

Lower VAT rates on certain items – including basic food products, natural gas, electricity and some engine fuels – will remain until the end of 2022.

4) Croatia

VAT on heating and food has been cut until 31^st March 2023. Heating will now be liable for VAT at 5% (down from 25%), while VAT on gas will also be set at 5% until it returns to its standard rate of 13%.

5) Italy

Italy has extended its reduced rate of VAT for gas used for transport until 31^st October 2022. It will remain at 5% until this date.

6) Norway

The VAT zero-rating on electric vehicles will be removed. A new government proposal would see the zero rate removed from next year.

7) Azerbaijan

Reports suggest Azerbaijan will move to extend the VAT exemption on the import of hybrid vehicles. The exemption was introduced on 1^st January 2022 for a period of three years and applies to vehicles under three years old and with an engine of less than 2.5 litres.

8) Albania

The government will soon make machinery used to produce green energy exempt from VAT.

9) Spain

VAT rates on energy have been temporarily reduced with effect from 1^st October 2022 and will remain until 31^st December 2022.

10) Switzerland

Swiss lawmakers have voted to raise VAT rates across the country in 2024. The standard VAT rate will increase from 7.7% to 8.1%, while the reduced rate will rise from 2.5% to 2.6%.