Compliance Services

Invoice regulation change is frequent and overwhelming for many businesses
The latest mandate news and updates can be found lower down this page. Bookmark this page to stay right up to date. Our mandate solutions enable businesses to cost effectively comply and stay compliant throughout the lifecycle of a mandate. Read about our e-invoicing mandate solution in more detail as well as our country specific solutions.

The latest updates from around the world

Plans for CO2 tax

The Danish government has outlined an ambitious aim of reducing greenhouse gas emissions by 70% by 2030.

To this effect, on 20 April 2022, the Danish government announced some green tax reform measures, including the introduction of a new CO2 tax. This will include a fixed minimum amount per tonne of C02.

The Danish government will implement this across companies in a phased approach, between 2025 and 2030.

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Switzerland

Anticipated increase in VAT rates

A few months ago, we oversaw Poland applying greater autonomy to determine their own VAT rates.

More recently in Switzerland, we can see how the economic measures a country enacts can have a significant effect on the VAT rates a country deploys.

In December 2021, the Swiss Parliament approved the AHV (Old Age and Survivors Insurance) 2021 reform. The measure aims to maintain AHV benefits- but this will come at a cost. Specifically, to meet additional costs for this measure, an increase in the VAT rates has been proposed.

The VAT rate increases are expected in line with the following:

  • Standard rate: from 7.7% to 8.1%
  • Reduced rate: from 2.5% to 2.6%
  • Rate for accommodation: from 3.7% to 3.8%

A referendum is expected in autumn 2022 to approve these rates. If approved, these are expected to take place in 2023.

Tungsten Network will monitor any new tax rates, if approved, in Switzerland and ensure these are implemented as part of our portal solution.

VAT reduction on specific supplies

Croatia is following the overwhelming trend both in Europe and beyond to reduce VAT rates on specific supplies. These aim to lower the tax burden on Croat citizens – which is unsurprising given the current inflation, culminating in rising living costs.

The Act on amendment of the Act on the Value Added Tax was published in the official Gazette, No. 39/2022 on 30 March 2022.

The amendments provide a detailed oversight of the main changes outlined by the Croatian government; these can be summarised as follows:

  • Reduced rate of 5% applicable to cinema tickets, certain foodstuffs, fertilisers and pesticides
  • Extension of the 13% VAT rate for natural gas from CN 2711 11 00 and CN 2711 21 00 and heating from heat stations, including fees related to these deliveries, regardless of who the delivery is made to.

Tungsten Network supports all valid VAT tax rates in Croatia.

Co-operation with the EU to reduce VAT fraud

Last month we communicated how countries in Europe, specifically the Benelux countries, were embarking on joint ventures with the aim of reducing VAT fraud.

The European Commission aims to establish a similar incentive with Norway, with the same underlying objective- to reduce the VAT gap.

This is a unique development- it is the first ‘alliance’ of its kind with a non-EU country.

As part of the agreement, tax authorities in both the EU and in Norway can share tax information and partake in activities to help fight VAT fraud similar to those outlined in the EU.

A recommendation from the European Commission plans to extend this joint initiative yet further, proposing new methods to further reinforce barriers against VAT fraud.

Reduction of the VAT gap is the primary objective of e-invoicing mandates, which are expected to be implemented with increasing frequency in the coming years in Europe. By extension, we can envisage the European Commission, and countries of their own initiative, to instigate measures to further reduce the VAT gap in a streamlined and efficient manner.

VAT reduction on gas and energy bills

The recurring trend for the reduction in VAT rates for energy and gas continues unabated across Europe, considering rising inflation and the post-Covid economic recovery.

Ireland is no exception- and the Irish Ministry of Finance has announced a VAT reduction from 13.5% to 9% to take effect from 1 May 2022. This is expected to run until 31 October 2022.

VAT reductions often prove to be costly – and in Ireland, the reduction in VAT rates for energy and gas will come at a cost of 46 million Euros to the government.

In addition to rising inflation, it is likely the measure was introduced to counteract the carbon tax, which is also commencing on 1st May 2022. Such measures serve to demonstrate that VAT must be viewed as part of a greater intricate framework of taxes within the fiscal structure rather than a tax in isolation and underlines the challenging role of the government to balance and manage the effects of taxation.

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Philippines

200 more medicines exempted from VAT

Further 200 medicines will be exempt from VAT following the approval of Revenue Memorandum Circular 68-2022 by BIR. These medicines are utilized for the treatment of hypertension, cancer, mental illness, tuberculosis, kidney disease, diabetes and high cholesterol, in addition to other COVID-related medicines and medical devices.

The BIR has published the full list of exempted medicines on its official website.

Launch the tax portal for cross-border businesses

Vietnam’s General Department of Taxation (GDT) has launched a web portal for foreign suppliers involved in cross-border business activities in Vietnam. The web portal allows cross-border businesses to register, declare, and pay tax without submitting any physical paperwork to the Vietnamese tax authorities.

Through this new portal, foreign cross-border businesses will be able to pay their taxes directly instead of relying upon a third party. The Vietnamese government also seeks to address the shortfall in tax collection, particularly from foreign businesses on Vietnam-sourced income.

First step on e-invoicing implementation

While the Bahrani Cabinet is reviewing the proposed suspension of VAT, the National Bureau of Revenue has launched a survey to estimate the volume and nature of VAT invoicing, which included a mandatory questionnaire on invoicing patterns and the use of e-invoicing. It is likely that this information will be used in the preparation for electronic invoicing.

Bahrain is likely to follow Saudi Arabia’s lead in implementing e-invoicing in a pre-clearance model, which will require VAT-registered businesses to submit their sales invoices to the NBR for approval before sharing them with customers.

Urgent proposal to temporarily suspend VAT

Inflation is soaring worldwide due to Covid and the Russian-Ukrainian conflict; the situation in Bahrain is no different.

10 Bahraini MPs, led by Mahmood Al Bahrani, have put forth an urgent proposal to tackle the burden of inflation on the nation. The proposal suggests suspending the 10% VAT temporarily as well as doubling the anti-inflation allowances for Bahrainis. “Inflation has hit the world hard, and today’s prices are threatening global economies”, Mahmood AI Bahrani added.

The proposal will be forwarded to the Cabinet for further reviews.

Plan to introduce e-invoicing systems

Oman introduced VAT in April 2021 as part of the GCC Common VAT Agreement, with a standard VAT rate of 5%.
Recently, Oman Tax Authority expressed its interest in introducing e-invoicing in a gradual phase, opening it up to VAT taxpayers on a voluntary basis initially, and subsequently on a compulsory basis. It is unclear when the e-invoicing system will be implemented, but we can expect it to be implemented during 2023.



Country specific mandates