Compliance Services

Multiple countries use the reverse charge to reduce tax evasion and consequently reduce VAT gaps. The reverse charge mechanism operates by shifting the burden of paying VAT to the buyer rather than the supplier. This prevents the supplier from charging the VAT element but not paying VAT directly to the tax authorities. As a result, the reverse charge today is viewed as an effective measure by multiple EU Member States to regulate the flow of VAT to tax authorities.  

Belgium has now extended the reverse charge mechanism to also cover the construction and public works sector and in doing so has widened the scope of services subject to fiscal policies that seek to control tax evasion.  

Bulgaria continues its busy fiscal trajectory alongside lowering its VAT registration threshold this month, through the adopting of the Bill to amend the VAT law. This has introduced multiple VAT rate changes in the country for key services. 

Bulgaria initially implemented several VAT changes in the summer of 2020 as a direct response to the Covid pandemic, where the standard tax rate of 20% was replaced by the reduced rate of 9% for various goods and services. The 9% reduced rate will now also apply to the following: 

• Catering and restaurant services 
• Tourism services 

• Books and textbooks 
• Certain foodstuffs and supplies 
• Sports facilities and supplies 

These tax measures are expected to last until December 2023. 

Bulgaria is a compliant territory for Tungsten Network and we support all valid VAT rates in the country as part of our e-invoicing solution.  

We wanted to remind you that the VAT registration threshold in Bulgaria is increasing from BGN 50,000 to BGN 100,000 as of 1 January 2023. 

Please refer to our recent post on the VAT threshold increase here.  

The turn of 2023 is a busy one for Portugal in fiscal-related matters, as it also has made significant revisions to its tax code.  

As a summary, these changes include:  

• An increase in the VAT exemption limit, from 12,500 Euros to 13,500 Euros in 2023 
• An extension in the deadline for submitting tax returns, which includes an extension to 20 September for the filing of the second quarter VAT returns 
• A reduction in the VAT rate for vegetable-based drinks and butter, to 6% 

• A reduction on the VAT rate on biomass equipment, with specific equipment now taxed at 6%.  

Tungsten supports all valid VAT rates as part of our e-invoicing solution in Portugal and these are available on our portal for selection.  

As of 1 January 2023, it is mandatory to include an ATCUD code on a Portuguese invoice.  

Tungsten has previously commented on the delay of the mandatory implementation of the ATCUD code. As a reminder, the ATCUD is an 8-digit code unique identifier included on Portuguese fiscal documents, and comprises of the following:  

• A service validation code assigned by the Portuguese tax authorities, and 
• A series of numbers usually derived from the taxpayers’ software. 

Tungsten does not create the legal invoice on behalf of suppliers in Portugal. However, we assist Portuguese suppliers and buyers through efficient and rich invoice data delivery to buyers. Portuguese suppliers are advised to include the ATCUD code from 1 January 2023 in their fiscal documents as applicable.  

Increasingly, we are seeing countries advance environmental and health agendas via the deployment of fiscal measures. Such tax measures, ubiquitous in 2022, are expected to be equally commonplace in 2023, as awareness of ecological and related matters increases.  

Via its 2023 State Budget, Portugal is introducing a reduction in VAT on the purchase of bicycles. In doing so, Portugal becomes the first EU country to enact such a measure. From 1 January 2023, this will be set at the lowest VAT rate possible in Portugal, at 6%.  

Tungsten supports all valid VAT rates in Portugal as part of its solution, including the 6% rate. We are also conscious of the countries intrinsically linking further societal agendas which extend beyond the economy in their tax agendas, and we are investigating how we can integrate these as part of our solution.  

Order 8/2022-XXIII of the Secretary of State for Tax Affairs, dated 13 December 2022, introduced some amendments to the Portuguese 2023 tax calendar.  

These revisions have been summarised below:  

• The possibility to utilise PDFs as e-invoices for tax purposes has once again been extended, now to 31 December 2023, from which point a digital signature will be required on a PDF invoice.* 
• For any fiscal documents, such as invoices, credit notes, etc issued in 2023, businesses will have until the 8th of the following month to submit the Standard Audit File for Tax (SAF-T).  The SAF-T is an internally recognised standard which is used for the exchange of tax information.  

Further important points raised in the Order include the following: 

• The Portuguese Tax Authority (PTA) will promote compliance with the technical specifications necessary for the real-time communication of invoice data, either through webservice in real time, or through a monthly web service. 
• The PTA will also plan to implement a process to issue supporting compliance alerts to taxpayers who do not communicate the data included in their invoices by the 5th day of the following month, or when applicable.  
• Annual inventories can be submitted until the second month following the end the fiscal year. Consequently, the annual inventories for 2022 should be submitted before 28 February 2023. 

*Tungsten is closely following the requirement for PDF’s to be digitally signed in Portugal, especially considering the VAT in the Digital Age (ViDA) proposal which re-defines the definition of an e-invoice, as well as modifying the relevance of digital signatures on a PDF. 

The Inland Revenue Authority of Singapore (IRAS) has published an updated FAQ and other guidance following the increase in GST rates from 7% to 8% on 1 January 2023.  

Please click here to access these documents. 

In our previous release, we mentioned that e-invoicing would become mandatory for taxpayers with annual turnover exceeding Rs.5 crore in India, starting from 1st January 2023. 

 This was, however, clarified by the Central Board of Indirect Taxes and Customs (CBIC) on 26th  December 2022, that “There is no proposal before the Government, at present, to reduce this threshold limit to Rs 5 crore with effect from 01.01.2023, as no such recommendation has been made by GST Council as yet”.  

Tungsten Network has been offering compliant e-invoicing services in India since e-invoicing was introduced in 2019, and we will continue to monitor e-invoicing development in India.  

In December 2022, ZATCA released an updated version of the Detailed Guidelines On E-invoicing, which provides details on how to integrate with the Fatoora portal, failure scenarios, and frequently asked questions regarding the use of e-invoicing. 

This guideline is available in English on the ZATCA website.