Anguilla: Anguilla is introducing a goods and services tax (GST) that will be charged at a rate of 13% on the value of imports and on the value added (mark-up) on goods and services supplied by one business to another or to final consumers. GST registration (which is possible as from 4 April 2022) will be required where the total value of supplies at the end of any period of 12 months or less equals or exceeds XCD 300,000. The GST will replace several indirect taxes, such as the Accommodation Tax, Communication Levy, Environmental Levy, Public Entertainment Tax and Interim Goods Tax.
Aruba: The government held a series of “stakeholder” meetings during February and March 2022 to discuss Fiscal Reform 2023 with various organisations. The reforms include the introduction of a VAT regime, as well as changes to certain direct taxes (e.g., profit tax, income tax, wage tax).
Brazil: A resolution published by the Ministry of Economy on 23 March 2022 temporarily reduces the import duty on ethanol and certain consumer goods that are not produced in Brazil, from 18% and up to 28%, respectively, to 0%. The rate reductions, which aim to address inflationary pressures, apply as from the date of publication until 31 December 2022.
Cambodia: Effective 1 April 2022, nonresident suppliers of digital goods and services are subject to a 10% VAT in Cambodia and must file VAT returns. Such suppliers are required to register for VAT purposes if they have annual turnover of at least KHR 250 million in transactions with Cambodian customers or anticipated turnover of at least KHR 60 million for three consecutive months in the current year in transactions with Cambodian customers, regardless of whether the transactions involve B2B or B2C supplies. In addition, reverse charge VAT applies to B2B transactions between non-resident suppliers and VAT taxpayers.
European Union: The European Commission is holding a public consultation during the period 20 January - 5 May 2022 on whether the current VAT rules are adapted to the digital age and how digital technology can be used to help EU member states combat VAT fraud and benefit businesses. The “VAT in the digital age” initiative aims to respond to the challenges presented by the digitalisation of the economy and its impact on VAT regimes. The consultation seeks views in the following areas: VAT reporting obligations and e-invoicing; the VAT treatment of the platform economy; and the use of a single EU VAT registration.
Finland: A law ratified on 11 March 2022 extends the application of the zero-rate VAT on goods used for testing, treating or preventing COVID-19 and supplied to specific organizations, with the zero rate applying retroactively as from 1 January 2022 through 30 June 2022.
Ghana: As from 1 April 2022, a portal is available for nonresident persons that make supplies of electronic services to consumers in Ghana to register for VAT purposes and file their VAT returns.
Greece: The authorities issued a press release on 28 March 2022, which provides that, due to the requirement for companies to use the electronic invoicing platform, “myDATA” (my Digital Accounting and Tax Application), companies are no longer required to submit sales lists. For 2021, businesses must upload to myDATA relevant information on invoicing income, self-invoicing expenses and securities by 27 May 2022; amendments to submissions can be made during the period 10 June and 31 October 2022.
Indonesia: The government intends to begin charging VAT at a rate of 0.1% on crypto asset purchases as from 1 May 2022 because crypto assets are considered commodities, rather than a currency, in the country. Implementing regulations for the new rules are under development.
Mexico: The State Administration of Taxation published an ordinance on 9 March 2022 that updates the list of nonresidents that have registered with the Federal Taxpayers’ Registry for VAT purposes as suppliers of digital services in the country. Nonresident suppliers of digital services have been subject to VAT in Mexico since June 2020.
Norway: The Minister of Finance announced a consultation on 8 April 2022 on a proposal to amend the VAT act to introduce a general VAT obligation on the sale of all remotely deliverable services from abroad to recipients in the Norwegian VAT area. Remotely deliverable services are those where the nature of the service cannot be or is difficult to link to a specific physical location (e.g., consulting services, sales of streaming services, etc.). To level the playing field between Norwegian and foreign providers of such services (currently, a foreign provider is liable to VAT on remotely deliverable services supplied to businesses (B2B transactions) or public enterprises in Norway—where the recipient is accountable for VAT—and on electronic services provided to private consumers). The government is proposing to extend the VAT obligation on remotely deliverable services to consumers to apply to non-electronic services. Comments must be submitted by 8 July 2022.
OECD: The OECD released a toolkit entitled, “VAT Digital Toolkit for Asia-Pacific,” on 10 March 2022 to assist tax authorities in the region with the design, administration and implementation of measures to ensure the effective collection of VAT on e-commerce activities.
While not immediately related to indirect tax, on 22 March, the OECD launched a public consultation on a new global tax transparency framework for the reporting and cross-border exchange of information on crypto assets, including proposed changes to the OECD's common reporting standards on the automatic exchange of financial account information between countries.
Rwanda: The government intends to introduce VAT on the supply of digital services and products to Rwandan residents by nonresidents.
Spain: The law introducing a tax on non-reusable plastic was published on 9 April 2022 and will apply as from 1 January 2023 (for prior coverage, see the article in the January 2022 issue of Indirect Tax News).
Sweden: Bills submitted to parliament on 22 February 2022 would implement changes to the VAT rules as announced in the 2022 budget, including an increase in the VAT registration threshold from SEK 30,000 to SEK 80,000.
United Kingdom: A plastic packaging tax (PPT) applies in the UK as from 1 April 2022 to incentivise the use of recycled plastic in packaging. The PPT applies to plastic packaging produced in or imported into the UK that does not contain at least 30% recycled plastic, and a rate of GBP 200 per tonne of plastic packaging will be applied if the packaging contains less than 30% recycled plastic. Imported plastic packaging is liable to PPT, whether the packaging is unfilled or filled. The PPT affects UK producers of plastic packaging, importers of plastic packaging, business customers of producers and importers of plastic packaging, and consumers who purchase goods in plastic packaging in the UK. An exemption applies to producers and importers of small amounts of plastic packaging.
The Spring Statement 2022, delivered on 23 March 2022, includes a five-year reduction in the VAT rate on energy saving materials, such as solar panels, heating pumps and roof insulation, from 5% to 0%.
U.S. and UK: The U.S. Trade Representative announced on 22 March 2022 a new tariff agreement with the UK to allow UK steel and aluminium products to enter the U.S. market without the application of Section 232 tariffs. In return, the UK agreed to lift retaliatory tariffs on over USD 500 million worth of U.S. exports to the UK.
United States: The U.S. Court of International Trade (CIT) issued a decision on 1 April 2022 in a case involving the legality of certain import tariffs imposed on Chinese-origin goods under Section 301 of the Trade Act of 1974. Although the CIT concluded that the imposition of the tariffs did not violate the Trade Act, it ruled that USTR failed to comply with requirements under the Administrative Procedure Act when it imposed the duties. The CIT remanded USTR’s decision imposing the tariffs back to the agency for further explanation and consideration, but the court did not lift the tariffs.