Editor's Letter

Let me start this editor’s letter to the BDO Indirect Tax News by saying that I hope that all is well with you and your loved ones. These are still challenging times and no one knows exactly what lies ahead of us. We still see governments taking measures to deal with the consequences of the COVID-19 crisis, such as VAT rate cuts in Ireland, Germany, and Belgium, while some countries are slowly cutting back on measures taken previously.

The COVID-19 crisis has also resulted in many changes in behavior and these have led to shifts in focus for tax authorities. For example, an increase in online sales has made the Guatemalan tax authorities more focused on these types of transactions. In the meantime, the EU has agreed to postpone the coming-into-force of the new VAT e-commerce rules until 1 July 2021 to give Member States that had to deal with the consequences of the COVID-19 crisis more time to implement this legislation and accompanying IT-systems. In the US the tax treatment of e-commerce remains an important topic too, as is shown by the article from our US colleagues that you will find it this edition.

In this issue we also report on some other significant developments, including the release of an important French Supreme Court decision that confirms that lessors can opt for VAT on the rental of professional premises per lot, rather than globally. And, last but not least, there's the news that the Czech Republic has decided not to implement a general reverse charge rule because it felt it wasn’t worth it, as it would be in force only a very limited time (1 July 2020 to 30 June 2022). The Czech Republic previously pressed on with the option of implementing a general reverse charge rule and other EU Member States where interested in the results of the Czech Republic’s experience. To my knowledge, this means that a general reverse charge rule will not be implemented in any EU Member States, as some that had considered it have decided against it and other Member States simply do not meet the criteria. Whether implementation of a general reverse charge rule will work in combatting VAT fraud will, therefore, remain to be seen.

In this issue:

BAHRAIN: Bahrain National Bureau for Revenue (NBR) has published two new VAT Guides on its website
CANADA: Proposed British Columbia “Netflix Tax” deferred
CZECH REPUBLIC: The general reverse-charge is being postponed
THE EUROPEAN UNION:
- Cancellation or dissolution fee: VAT or no VAT?
- European Commission postpones the VAT e-commerce rules until 1 July 2021
- How to deal with adjustments of deductions in case of retrospective rebates or transfer pricing adjustments
- HUNGARY - In which country do you pay VAT for international online sales?
- POLAND - Subsidiary fixed establishment for VAT purposes?
- ROMANIA - CHEP Equipment Pooling case: Transfer of goods is not an intra-Community supply and refusal of a VAT refund due to lack of VAT registration is unjustified
FRANCE:
- First application in France of the ECJ’s Mercedes Benz Financial Services UK case law
- VAT on rents: French High Court confirms one option per lot
GERMANY: New circular of the German tax authorities regarding retroactive invoice corrections
GUATEMALA: Recent VAT changes in 2020
HUNGARY: Radical changes in the online data reporting regulations
INDIA: Introduction of World Trade Organisation-compliant export benefit schemes in India
INDONESIA: Value Added Tax on sales of digital products to Indonesian customers
IRELAND: Temporary reduction in the standard VAT rate
ITALY: New VAT provisions for medical devices supplied during the COVID-19 emergency
JAPAN: A new system in Consumption Tax–filing extension rule
MALAYSIA: Extension of group relief for Service Tax
THE NETHERLANDS:
- Exempt hiring or a different taxable supply: An important distinction
- Possibilities for VAT deduction for costs of unoccupied buildings
- Greater clarity on the VAT position of members of Supervisory Boards
OMAN: Developments on implementation of VAT
SINGAPORE: Changes affecting certain GST zero-rating conditions
SLOVAK REPUBLIC: The Slovak branches and VAT deductions arising from purchased services
SOUTH AFRICA: Recently proposed amendments and other changes in Value Added Tax for 2020
SPAIN:
- Spanish criterion regarding verification of VAT credits related to statute barred years
- Financial transactions - pro rata calculation
SRI LANKA: Indirect Tax Regime geared to meet macroeconomic changes
UNITED ARAB EMIRATES: UAE amends VAT Executive Regulations
UNITED STATES: Sales and Use Tax and Value Added Tax pitfalls for e-commerce businesses