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European VAT

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As the governments’ announcements on VAT measures related to the COVID-19 epidemic outbreak continue to unfold at such great speed, here is our second summary of the recent developments. This is current as of the 30th of March.

For many countries there is uncertainty as to whether the below measures apply only to locally established businesses or have they been extended to non-resident companies. Essentia is investigating this on a country by country basis and we will publish the relevant updates shortly.

  • ITALY – Italy has not implemented any further VAT measures apart from those outlined in our previous newsletter of the 17th of March. Moreover, it is uncertain whether or not those measures that have already been announced can apply to non-resident companies.
  • SPAIN – no further announcements have been made by Spain since our previous newsletter of the 17th of March.
  • GERMANY – the German tax authorities have extended the VAT deferment period until the end of 2020.
  • AUSTRIA – in addition to a payment plan provisions outlined in our newsletter of the 17th of March, the deadline to submit the annual VAT return for 2019 period has been extended from the 30th of June 2020 to 31st of August 2020.
  • FRANCE – as it stands at the moment there are no specific VAT measures approved in France;
  • UK – according to the latest (of the 26th of March) HMRC’s guidance, both resident and non-resident businesses that are registered for UK VAT will have an option to defer their VAT payment due for the period 20 March – 30 June 2020 until the 31st of March 2021 (at the latest). Businesses paying by direct debit should cancel their direct debit orders with their banks. Note that these measures do not cover VAT MOSS payments. Please follow the link for full HMRC’s guidance: https://www.gov.uk/guidance/deferral-of-vat-payments-due-to-coronavirus-covid-19
  • IRELAND – in addition to the VAT measures outlined in our newsletter of the 17th of March, Ireland suspends all VAT debt enforcement activities until further notice.
  • POLAND – in addition to the VAT measures outlined in our newsletter of the 17th of March, Poland announced that the interest normally charged on the tax arrears will be temporarily abolished. Other VAT positions within the approved ‘anti-crisis shield’ include postponing the go-live date for the combined SAF-T file with the VAT returns for large companies from the planned 1st of April onto the 1st of July 2020 and the application of the new VAT rates matrix from the planned 1st of April onto the 1st of July 2020 as well as extension of the deadline for submitting a notification of payment to a bank account of the supplier not included in the Whitelist from 3 days to 14 days.
  • SWEDEN – the measures reported in our newsletter of the 17th of March can be backdated to January 2020 period.
  • DENMARK – as part of the Danish id package, businesses that settle VAT monthly received a 30-day extension of the deadline to pay the VAT whereas business settling VAT on a quarterly basis the payment for the first two quarters of 2020 can be combined and made by the 1st September 2020. Any businesses on a bi-annual frequency can pay the VAT for both half-yearly periods in a combined payment to be made only by the 1st of March 2021. For further details, please follow the link (in English): https://skat.dk/skat.aspx?oid=16900&lang=us
  • NETHERLANDS – the Dutch tax authorities may grant a 3-month VAT payment holiday upon receiving an application from a business struggling with its cashflow due to the COVID-19 crisis. Such applications can even be made by the companies over a telephone as far as the 3-month payment extension is concerned. If a business requires some a payment extension beyond 3 months, a written motivated application is required. In addition, the authorities are reducing the interest rate for such payments from 8% to 0,01%. Moreover, some extra VAT relief on customer bad debts related to the COVID-19 crisis are going to be granted and businesses in a regular VAT refund situation may switch from the quarterly VAT return filing frequency into the monthly returns to improve their cash flow.
  • SWITZERLAND – The Swiss tax authorities are going to allow the affected businesses to defer their VAT payments with no interest charge until the end of 2020.
  • NORWAY – the deadline for payment of VAT for January-February 2020 period has been postponed from the 10th of April to the 10th of June 2020. Moreover, the tax administration will not impose enforcement fines for late submission of the VAT returns. In addition to that, VAT rate for passenger transport, accommodation, public broadcasting as well as access to cinema, sporting events, amusement parks and adventure centres will be reduced from 12% to 8% from 1 April to 31 October 2020. Link to the Norwegian tax authorities’ announcement can be found here (in English): https://www.skatteetaten.no/en/package-of-measures-in-connection-with-the-coronavirus-situation/#value-added-tax-vat
  • CYPRUS – the measures reported in our newsletter of the 17th of March may now be reconsidered by the Cypriot government.
  • JAPAN – Japan may be reconsidering the implementation of the consumption tax measures, which were outlined in our newsletter of the 17th of March.

If you have any queries on the above, please get in touch with either your regular Essentia or Quipsound contact, or alternatively Marta Gałązka (+44 203 713 3535; marta.galazka@essentiaglobalservices.com)