Compliance Services

At the start of the new year, Romania is introducing the following VAT rate changes: 

• The VAT rate will increase to 9% from 5% for hotel accommodations, restaurant and catering services  

• The list of good subject to the 9% rate has been modified. 

Romania is a compliant territory for Tungsten Network and we support all valid VAT rates in the country. 

As with multiple countries, the start of the year typically heralds the introduction of new fiscal policies as countries seek to set the platform for the economic trajectory for the year ahead.  

Lithuania is introducing some adjustments to its VAT rates, effective January 2023, in line with the following: 

• The VAT on e-Books and electronic non-periodical publications will be reduced from 21% to 9%. This will be a permanent VAT change. 
• VAT on accommodations and admission to artistic and cultural events will be taxed at 9% until 30 June 2023.  

• VAT on catering and takeaway services will be taxed at 9% until 31 December 2023.  

Lithuania is a compliant territory for Tungsten and we support all valid VAT rates as part of our solution.  

Increasing the VAT registration threshold in a country has multiple fiscal implications- one being the simplification of the VAT process, as a reduced number of businesses will be subject to being caught within the scope of the VAT registration threshold. Small businesses especially stand to benefit.  Of course, countries also need to consider the impact these will have on their economic position.  

From 1 January 2023, the Czech Republic will increase its VAT registration from CZK 1 million to CZK 2 million- the latter equating to c. 80,000 Euros. The doubling of the VAT registration threshold represents a significant reduction in the number of businesses falling under the scope of the VAT threshold.  

Last month we communicated details of the Test EFA Operation in Slovakia in respect of e-invoicing in the country, which was due to start in December 2022. 

The Slovak tax authorities have announced a slight delay- this is now due to commence this month, in January 2023.  

As with several countries at the start of 2023, Norway is introducing some new VAT rate changes, effective 1 January 2023.  

On a high-level, these include the following: 

• VAT exemptions in place for the sales of electric cars registered from 2023 will be limited to cars up to NOK 500,000. For cars that exceed this amount, the excess amount will be charged at 25%. 
• The VAT for electronic news services will be repealed.  
• There will now be VAT on remote services supplied to non-businesses in Norway.  

Norway is a compliant territory for Tungsten Network and our solution accommodates all valid VAT rates in the country.  

2022 saw Italy catering for taxpayers by providing several VAT concessions. These continue in 2023.  

The 5% reduced VAT rate will now be extended to the supply of district heating services between January – March 2023.  

Italy is a compliant territory for Tungsten Network and we support all valid VAT rates in the country.  

Italy – postponement of the Plastic Packaging Tax (PPT) (other taxes) 

The draft Budget Law 2023 in Italy has indicated that the Plastic Packaging Tax (PPT) will be postponed from 1 January 2023 to 1 January 2024. 

Tungsten is accommodating the Plastic Packaging Tax in Spain, which commenced on 1 January 2023. We will keep you updated with any developments with the PPT in Italy, if implemented. 

Poland permits the use of VAT groups in the country. Our previous post commented on how VAT groups typically operate and the relative advantages of using these. As the link shows, using VAT groups can provide taxpayers with several benefits.   

On 29 December 2022, The Polish Ministry of Finance launched a public consultation on the new logical structure of internal records maintained by members of a VAT group.  

The structure is key to VAT groups, who can use it to submit records of VAT-related activities undertaken by the group for monthly periods to the tax office from 1 July 2023.  

Feedback will be reviewed once compiled and a logical structure released accordingly.  

2022 saw multiple countries deploy fiscal policies to reverse the adverse effects of inflation. While countries across Europe and globally continue to grapple with inflation, some countries are beginning to reverse their fiscal policies in this respect with a view to enhancing their economic position in 2023. 

Tungsten has been following Poland’s anti-inflation measures closely for some months. Many of the fiscal changes enacted here ceased at the end of 2022. 

This means that we can expect to see VAT rates return to their former rates, as seen prior to 1 February 2022, in line with the following: 

• Natural gas: from 0% to 23% 
• Electricity: from 5% to 23% 
• System heat- from 5% to 23% 
• Motor fuels- from 8% to 23% 

However, as mentioned, some limited measures will remain. For example, we communicated last month that the zero percentage on basic foods will remain in place in Poland.  

In transitioning to a post-covid era, multiple countries are reviewing previously enacted fiscal measures to see whether they are still pertinent today. An integral component of the post-covid recovery is the reinstating of VAT rates imposed prior to the pandemic.  

As Covid, or at least its impact, sharply declines globally, several countries are fully reversing fiscal measures ratified during the pandemic. Belgium’s reduced 6% VAT rate for masks, a direct response to the Covid pandemic, expired on 31 December 2022, and the VAT rate for masks will return to their former rate from 1 January 2023, in line with reduced demand.