A new Revenue Memorandum Circular 72-2023 has been issued by the Bureau of Internal Revenue, which exempts several medicines from VAT.
As of RMC 72-2023, 59 more medicines are now eligible for VAT exemption under the TRAIN Law and CREATE Act. These medicines include those for cancer, hypertension, high cholesterol, diabetes, mental illness, tuberculosis, and kidney disease. The complete list of exempted medicines covered by this RMC can be found here.
There have been discussions in Bahrain about mandating e-invoicing since 2022. In May 2023, the Bahrain Tender Board released an RFP (Request for Proposals) seeking a technology vendor that can assist in designing, implementing, operating, and maintaining Bahrain’s e-invoicing system. Bahrain is likely to implement a CTC model for the e-invoicing mandate, where B2B invoices must be cleared and approved by the tax authorities before being sent to customers.
Applicants must have experience in leading large IT projects for tax authorities, as well as the ability to deliver all functional and technical requirements as outlined in the tender documents. Applicants who wish to bid should follow the instructions on the tender page.
The European Data Protection Supervisor (EDPS) holds a prominent role within the wider European Commission’s infrastructure. As the name suggests, it monitors and helps to regulate the protection of personal data in the EU. It is unsurprising that the European Commission has sought the expertise of the EDPS in relation to the VAT in the Digital Age (ViDA) proposal. The ViDA proposal, in imposing additional e-reporting obligations on Member States, will immediately raise questions about the security and safekeeping of personal data. This becomes even more critical as the spotlight on data quality is set to intensify with yet further mandatory requirements for invoice data content in line with the proposal. Further to the EDPS’ review of the ViDA proposal, the European Commission has now published the summary of the previously published EDPS opinions concerning ViDA.
The EDPS recommendations focus predominantly on the issue of data security and safekeeping to ensure the European data protection rules of individuals. These recommendations include, but are not limited, to the following:
The summary of the EDPS opinion can be found here:
The full opinion can be found here:
The VAT in the Digital Age (ViDA) proposal has – understandably – spawned much debate about the effectiveness, feasibility and practicality of its application. Our previous post commented on the much-anticipated Economic and Financial Affairs Council (ECOFIN) conference which laid a platform to debate the ViDA proposals.
Overall, ViDA has been applauded by EU Member States to nurture a less fragmented and harmonised e-invoicing topography. However, the convention did raise some concerns in respect of the proposal.
While the overall sentiment of working towards a harmonised e-invoicing / e-reporting framework is encouraged, certain Member States felt that greater flexibility regarding domestic e-reporting should be considered.
Pre-clearance remains a contentious issue, and the Commission will need to address whether basic, sparse checks- which can be viewed as synonymous with e-invoicing – are permitted.
Finally, doubts were expressed around the 1 January 2028 date by certain Member States- which was deemed too soon to implement, given cost and development considerations.
The convention, while wholly supporting the ViDA proposal, also unearthed some significant questions that the European Commission will need to address.
The ECOFIN is expected to meet on 17 October 2023, with the aim of putting some finality with respect to some of the questions raised.
Aside from the critical upcoming e-invoicing mandate that Kofax is supporting, the Polish government is also in the process of consolidating several other fiscal initiatives under a single package.
The package, referred to as Slim 3, has now been signed into law. You can read more about Slim 3 and the measured contained within it on our dedicated country-specific page here.
Switzerland’s plans to introduce new VAT rates in 2024 are accelerating, but these are not the only changes forecast for what is projected to be a congested January 2024 with respect to its fiscal calendar.
Alongside new tax rates, the Swiss Federal Council is acceleration the automation of its fiscal procedures, by mandating that VAT registrations and VAT returns must be submitted electronically from 1 January 2024.
This obligation builds on an already strong electronic culture in the country, where most VAT returns are submitted electronically, therefore signalling Switzerland’s firm intention to cement this within its legislative framework.
As 1 January 2024 nears in Switzerland, which heralds the introduction of new VAT rates, the country is also accelerating its material to aid taxpayers in a smooth transition to the new VAT rates.
The Federal Council in Switzerland has produced some material which aids taxpayers in the usage of the new rates, specifically relating to the declaration of the VAT rates.
Further information can be found via the Federal Tax Administration (FTA).
You can also read about Kofax’s plans to accommodate the upcoming VAT rates on our dedicated country-specific page here.
Malaysia’s Inland Revenue Board (IRBM) has announced a Special Voluntary Disclosure Program 2.0 (SVDP 2.0) effective from June 6th, 2023, to May 31, 2024. SVDP 2.0 eliminates penalties/fines for certain voluntary disclosures, such as disclosing undeclared income and paying any tax due within the specified timeframe. The detailed FAQs published by IRBM can help taxpayers understand the categories of accepted disclosures and the assessment years covered by this program.
As a result of this initiative, the government encourages taxpayers to come forward voluntarily to declare their income without imposing any penalties or fines. Through this program, taxpayers will be able to increase their level of tax compliance through the AES (Awareness, Education, Services) concept practiced at the Inland Revenue Board of Malaysia (IRBM).
The GSTN (Goods and Services Tax Network) has published an FAQ on the recently introduced Invoice Registration Portals (IRPs).
The FAQ contains information on reporting e-Invoices, validating IRNs, as well as how to access the portals offline. You can access the full FAQ here for more details.
The Goods and Service Tax Network (“GSTN”) issued guidance regarding the E-Invoice Verifier App on 8 June 2023. With this App, e-invoice details can be verified and checked.
The E-Invoice Verifier App offers the following features and benefits:
The following link (see below) provides more details about the application: https://www.gst.gov.in/newsandupdates/read/588.
From July 1, 2023, additional details will be required on tax invoices issued for taxable supplies based on the profit margin scheme for selling used vehicles as per ZATCA Governor’s decision (Administrative Resolution No. (63630) dated 25/10/1444 AH).
According to a recent report by IMF (International Monetary Fund, Kuwait), the government should collect more non-oil tax revenues and implement a 5% VAT scheme as the country’s economy has begun to recover from the global pandemic. Additionally, the report recommends levying excise taxes on tobacco and sugary drinks.
The report recommends investing the collected revenues in renewable energy and transportation.
The Mexican Tax Authorities have published a revised list of foreign providers of digital services on 12 May 2023. This includes foreign providers who are registered for tax purposes in Mexico as of 30 April 2023. 3 new entities were added to the existing list.
The VAT in the Digital Age (ViDA) proposal is still stimulating discussion across the continent with its significant e-invoicing and e-reporting plans, which will dictate the trajectory of the same over the next few years.
The Economic and Financial Affairs Council (ECOFIN) will convene to discuss the ViDA proposal on 16 June 2023. Consensus appears to support aligning the e-invoicing and e-reporting procedures, although concerns around timelines have been raised from a practical perspective.
The following document outlined by the Council of the European Union provides an outline to steer the main points to be addressed in the meeting:
https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CONSIL:ST_9749_2023_INIT
Kofax will follow any meaningful conclusions derived from the meeting.
On 25 May 2023, the European Parliament’s Economic and Monetary Affairs Committee (ECON) met to discuss the proposals of the VAT in the Digital Age package (ViDA).
The discussion unearthed some conflicting views with respect to the deadlines proposed by the Commission for e-invoicing. Specific Members of the European Parliament (MEPs) raised the following propositions:
The deadline for political groups to table amendments was 14 June 2023, with an ECON vote scheduled for October 2023.
The Hungarian administration has confirmed that the online invoice system in the country will have a new identification system for secondary user logins as from 1 June 2023. Users will need to sign in via a two-step authentication to login to the Online Invoice System.
As is typically the case, the authentication procedure will require a username and password, but will also require the following considerations:
For secondary user first time log ins, the “enable two-step authentication” will appear on online invoice system interface after registration of the username and password.
The user manual, accessible via the link below, can provide further information: around the topic: