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Here is our round-up of all the hottest tax snippets from September 2024 – featuring news of rate changes, regulatory updates and reclassifications.
Poland
Poland’s Ministry of Finance has proposed several amendments to the VAT Act. Some changes include reducing VAT rates on menstrual cups from 23% to 5% and introducing the standard VAT rate for hemp products used by inhalation/smoking.
Argentina
Argentina has reduced the Impuesto País tax rate on digital services from 35% to 8%. This tax applies to purchases made in foreign currency and is intended to help the local economy by encouraging consumers to buy domestically. The lower tax rate is anticipated to benefit both consumers and businesses.
Netherlands
In the Netherlands, the Supreme Court ruled that a company cannot deduct VAT on the purchase of a building if it intends to use the building for VAT-exempt activities.
Italy
Introduced in Italy’s fiscal delegation law, it intends to facilitate VAT on the import and sale of antiques, art, and collectables.
USA – Alabama
Starting from October 1st 2024, hearing aids will be exempt from Alabama’s state sales and use tax. This expires in 2029 and won’t apply to local taxes.
Finland
Finland increased the VAT rate for OSSOSS (One-Stop Shop): An EU VAT system allowing businesses to report and pay VAT for cross-border sales in a single EU member state. and IOSS procedures from September 1st, 2024, from 24% to 25.5%.
Portugal – Madeira
Madeira will cut its reduced VAT rate from 5% to 4% starting October 2024. This applies to essential food, books, pharmaceuticals, hotel stays, agriculture, and passenger transport.
Slovenia
Slovenia’s Parliament is reviewing a proposal to increase the VAT registration threshold starting from January 1, 2025. This will increase the threshold from €50,000 to €60,000.
Israel
Israel’s government is considering changing the planned 1% VAT increase to 1.5%. The new VAT rate of 18% was set to come into effect on January 1, 2025. Israel’s VAT was last raised by 1% to 17% in 2012.
Nigeria
Following the Nigeria Fiscal Committee and Tax Reform report, a VAT rise to 10% is required to cover a large budget deficit. A further increase of 15% by 2030 is also advised.
Denmark
Demark plans to introduce zero-rated VAT for domestic air travel services in the country.
United Kingdom
Following a recent tribunal in the European Court of Justice, the court ruled that the Tour Operator Margin Scheme (TOMSThe Tour Operators’ Margin Scheme (TOMS) is a VAT scheme in the UK designed for businesses that buy-in and resell travel services, such as accommodation and transport. Instead of accounting for VAT on the total selling price, businesses under TOMS only pay VAT on the margin (the difference between the sale price and the cost of services bought in).) applies to businesses reselling airline tickets without adding extra services. This means they cannot reclaim VAT and must use TOMS.
Taiwan
Taiwan will lower the VAT on specific goods and services, such as food, drinks, and transportation. This is intended to boost domestic spending and support economic growth. The government also plans to introduce a tax refund program for tourists to encourage more spending in the country.
Philippines
As of July 2024, the Philippines imposed a 12% VAT on foreign B2C services through Senate Bill 2528, aiming to boost competition for local digital service providers. Similar to other regional countries, the tax is expected to generate PHP 83.8 billion, with 5% allocated to support the local creative industries.
Kazakhstan
On July 8th, 2024, Kazakhstan published a law introducing VAT exemption on selling qualifying vehicles and agricultural machinery. This applies to sales only from authorised manufacturer representatives from whom the vehicles and machinery were purchased without VAT under the Tax code.
