VAT roundup: world regions targeting VAT law changes in 2019
In this global economy, various regions will be rolling out amendments to the Law on VAT. This round up brings you all the latest VAT changes from the UK, Ireland, European Union and Middle East and presents key dates and rate changes to be introduced in 2019.
HMRC Making Tax Digital for VAT
The UK is set to see changes to digital record-keeping and VAT return requirements come into effect as of 1st April 2019.
This impacts on limited companies with a turnover above the VAT threshold (£85,000) and companies must preserve digital records for up to 6 years.
All bank transactions and other financial information will start to flow automatically into their digital tax account linked through bridging software to HM Revenue and Customs (HMRC).
There is widespread concern that companies aren’t ready and HMRC have announced a deferral to the start date of 6 months for approximately 40,000 of UK businesses.
Budget 2019 saw VAT rates increase from 9% to 13.5% on the 1 January 2019. The Minister for Finance estimates this increase to generate €466 million in VAT receipts in 2019.
It is believed hotels and restaurants will mostly be affected by this change however, news and sporting facilities will remain with a VAT rate of 9%.
Moreover, Ireland will see the VAT rate of 23% for e-publications decrease to 9%. With the uncertainty that Brexit brings, there is concern that the increase in VAT could result in fewer UK tourists visiting Ireland.
EU-MOSS scheme changes
As of 1 January 2019, changes have been implemented that simplify tax compliance for B2C companies supplying digital services. Rather than register for VAT in each member state where sales are made, companies can now register for the mini one-stop shop (MOSS) scheme.
A new threshold of €10,000 was introduced, meaning that only companies whose EU sales of digital goods exceed this threshold will be subject to registering for MOSS. Whereas, for businesses with cross-border sales below this level will only be subject to charging the VAT in their home country, simplifying the VAT compliance as they only use one tax rate on their digital goods.
As of 1st January 2019, non-resident online retailers with an annual turnover of at least CHF 100,000 from small imports into Switzerland, are subject to Swiss VAT. Sellers also must charge and remit the Swiss VAT due on these goods.
Once a company generates CHF 100,000 for small consignments into Switzerland, all its’ other imports into Switzerland with an import VAT value above CHF 5, will be considered as domestic supplies and thus, subject to Swiss VAT.
In line with the EU regulations, transfer and redemption of vouchers shall be subject to VAT from 1 January 2019.
A 50% deduction rate of input VAT on the purchase of car leasing services came into place on 1 January 2019. This means that 50% of the rent may be deducted if the vehicle is used for commercial purposes.
The UAE and Saudi Arabia implemented VAT of 5% for standard-rated supplies on 1 January 2018 which is one of the lowest rates in the world. With Bahrain going live on VAT on 1st January 2019, Qatar and Oman are expected to follow suit in early 2019.
If you are interested in relocating to any of United Kingdom nations or the Republic of Ireland or anywhere else in the world and would like to speak to Kingpin International about international tax opportunities, please contact a member of the team. Alternatively, please browse our current international tax vacancies.