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With food inflation in the eurozone running at 10.8% in August and inflation continuing to cause economic waves across the world, it’s no surprise that many governments are using VAT as a tool to combat rising prices.
Here’s our round-up of some of the changes made to rates and rules so far in September:
Bulgaria
The 2020 Budget means all VAT-registered businesses must now report on cash holdings and specific receivables. The first report is due on 14th November.
Czech Republic
The Czech government has approved amendments to a bill that will see the country’s 10% and 15% rates merged into a single VAT rate of 12%. The new rate is currently scheduled to come into effect on 1st January 2024.
Cyprus
A six-month extension to the temporary reduced rate has been confirmed, with the 5% and 19% rates on certain essential goods set to remain in place. These rates had been due to end on 31st October 2023.
France
Any business that wishes to create a VAT group from 2024 will be required to notify the tax department no later than 31st October 2023. This is because new VAT groups founded in a particular year must be formulated with the authorities by the end of October in the preceding year.
Ireland
VAT on goods and services in the tourism and hospitality sectors increased from 9% to 13.5% on 1st September. The new rate will apply to items including food and beverages in restaurants, admission to some attractions and hotel accommodation.
Kazakhstan
The government is reportedly considering implementing a rate rise from 12% to 16% in an effort to generate higher VAT revenues.
Kenya
Kenya’s Kwanza ruling coalition has put forward plans for a 2% rise in the standard VAT rate. This would mean the rate increasing from 16% to 18% for the period 2024-25 and 2026-27.
Lebanon
Reports suggest the Lebanese government is considering an increase in the country’s standard VAT rate from 11% to 15% as part of a package of measured agreed with the IMF.
Portugal
The temporary reduction of VAT on basic foods to 7% has been extended by the Portuguese government for a further three months, taking it until 31st December 2023.
Romania
A new law has set out rules surrounding the use of VAT rates in the wood and energy industries. The reduced rate of 5% will now apply to the delivery and installation of photovoltaic panels and heat pumps, as well as sawdust and agglomerated wood scraps.
Singapore
New guidance has been issued on the rise in GSTGoods and Services Tax from 8% to 9% on 1st January 2024. It refers to transactions that will straddle the period of 31st December and 1st January and confirms that instances in which the invoice is issued or payment received before 1st January, the 8% rate will apply.
South Africa
A new public consultation has been launched as the South African Revenue Service seeks views on a possible modernisation of its VAT regime, which could include the arrival of e-invoicingElectronic invoicing - widely referred to as e-invoicing - is the exchange of a digital document between a supplier and a buyer. E-invoices are issued, transmitted and received in a structured data format that enabled automatic and electronic processing. They contain data in a machine-readable format so that an AP system can read an invoice without manual data entry, leading to faster and more efficient invoicing. and digital reporting.
Thailand
The government has confirmed the reduced rate will remain in place for another year. It means VAT will be chargeable at 6.3% plus the local tax taking the total to 7%.
