VAT Newsletter – second quarter 2022

AUSTRIA

AMENDMENTS TO THE VAT ACT/FISCAL CODE

• Interest for VAT (Sec 205c Federal Fiscal Code)
  • Based on ECJ decision C-844/19 TechnoRent International and the Supreme Administrative Court Ro 2017/15/0035, interest for VAT will be implemented in the Federal Fiscal Code (BAO).
  • The new rule for interest charged in the amount of 2 % over the base interest rate shall apply to both, VAT credits and VAT liabilities after an interest-free period of 90 days (Abgabenänderungsgesetz 2022 – AbgÄG 2022).

• No reverse charge for leasing of domestic real estate by foreign suppliers (Sec 19 para 1 and Sec 27 para 4 Austrian VAT Act)
  • In response to the ECJ decision C-931/19 Titanium, the provisions on the reverse charge mechanism shall be adapted.
  • As a result, reverse charge will not apply in case that domestic real estate is rented out by foreign suppliers. Thus, foreign suppliers remain liable for VAT and must declare VAT in the assessment procedure as there is no obligation for the recipient to withhold VAT according to Sec 27(4) of the Austrian VAT Act (Abgabenänderungsgesetz 2022-AbgÄG 2022).

BULGARIA

AMENDMENTS TO THE VAT ACT/FISCAL CODE

• As of 1 January 2023
  • The threshold for mandatory VAT registration will be increased from BGN 50,000 (approx EUR 25,000) to BGN 100,000 (approx EUR 50,000).
  • There is a possibility for VAT deregistration if the turnover does not exceed the new threshold (Bill No. 47-254-01-42).

CZECH REPUBLIC

TAX AUTHORITIES’ PRACTICE

• As of 1 April 2022
  • Based on ECJ decision C-201/18 Mydibel, the tax administration will treat sale and leaseback contracts concluded after 1 April 2022 as one single (tax-exempt) transaction (https://www.financnisprava.cz/cs/dane/prispevky-kv-kdp/zapisy-z-jednani/2022).

CASE LAW

• Proof of fraud
  • In its decision 4 Afs 95/2021-102, the Supreme Administrative Court concluded that it is up to the tax authorities to prove that the recipient of the supply (claiming input VAT) knew or should have known about fraud (https://bit.ly/3oRWfP6).

GERMANY

TAX AUTHORITIES’ PRACTICE

• No input VAT deduction and tax exemption for VAT fraud
  • If the tax authorities prove that the taxable person knew or should have known about the VAT fraud, there is no right to deduct input VAT. Additionally, the simplifications for triangular transactions do not apply (Circular of German Federal Ministry of Finance 15.7.2022, III C 5 – S 7429-b/21/10003 :001).

• Tax exemptions for iC supplies
  • The VAT exemption for iC supplies may not be denied solely based on a failure to timely submit a complete and correct EC Sales List (ECSL).
  • The requirements for the VAT exemption of intra-EU supplies are fulfilled retroactively, if an ECSL that was not submitted on time is submitted completely and correctly after the expiry of the deadline for the respective period. This also applies to the correction of an ECSL within the assessment period (Circular of German Federal Ministry of Finance 20.5.2022, III C 3 – S 7140/19/10002 :011).

HUNGARY

AMENDMENTS TO THE VAT ACT/FISCAL CODE

• As of 1 June 2022
  • The scope of tax exemption has been extended to imports of goods purchased by the European Commission or an agency established under EU law concerning the COVID-19 pandemic, provided that the goods are not resold for consideration (Section 93 of the VAT Act).

• As of 1 July 2022
  • The scope of tax exemption has been extended to imports of goods purchased by the armed forces of a Member State other than Hungary, if it is used for the armed forces or the civilian staff accompanying them, or supplying their restaurants and canteens, and this armed force carries out protection tasks for the purpose of implementing EU activities within the framework of the common security and defense policy (Section 93 of the VAT Act).
  • IC acquisition also include supplies within the framework of joint EU self-defense activities (Section 23 of the VAT Act).

POLAND

AMENDMENTS TO THE VAT ACT/FISCAL CODE

• As of 1 January 2023
  • The entry into force of VAT groups has been postponed for another six months until 1 January 2023 (https://www.sejm.gov.pl/sejm9.nsf/druk.xsp?nr=2138).

CASE LAW

• Management activities out of VAT scope
  • If a member of the management board is only liable to the company and not to third parties according to the provisions of the management contract, the activities are out of scope of the VAT rules (Judgement of the Supreme Administrative Court of 26 April 2022, ref. I FSK 2066/18 https://orzeczenia.nsa.gov.pl/doc/E3C0A28814).

TAX AUTHORITIES’ PRACTICE

• Loss of right to correct invoices
  • The right to correct invoices is eligible to taxpayer only. Thus, the loss of the status as taxpayer is accompanied by the loss of the right to correct invoices (https://eureka.mf.gov.pl/informacje/podglad/487231).
  • The supply of distribution services is not an ancillary service to the supply of gas (https://eureka.mf.gov.pl/informacje/podglad/488276;keyWords=0114).

ROMANIA

TAX AUTHORITIES’ PRACTICE

• As of 1 July 2022
  • Electronic invoicing is mandatory for B2G transactions (Law no. 139/2022).
  • Electronic invoicing is mandatory for B2B transactions of high tax risky products, i.e., vegetables or fruits, alcoholic beverages, new constructions, mineral products, apparel and shoes (EGO 130/2021).
  • The e-transport system, which aims to monitor the road transport of high tax risky products (e.g. vegetables, fruits, alcoholic beverages, mineral products) on the national territory, becomes mandatory (EGO 41/2022 and Order 802/2022).

SERBIA

TAX AUTHORITIES’ PRACTICE

• As of 20 May 2022
  • For supply of goods and services subject to VAT, for which a fiscal receipt has been issued, an additional electronic invoice must be issued when requested by a public sector entity (Official Gazette of RS 59/2022).

• As of 1 January 2023
  • The requirement to issue and keep e-invoices to private sector entities (B2B) enters into force (Official Gazette of RS 44/2021, 129/2021)

SLOVENIA

TAX AUTHORITIES’ PRACTICE

• VAT treatment of transport costs connected to the supply of goods
  • In case of online supply of goods to final customers (B2C) and in case the supplier organizes or facilitates the transport, the transport costs constitute an ancillary service and share the same tax treatment as the supply of goods, regardless of whether the costs are shown separately on the invoice.
  • In B2B transactions, transport costs are only considered as an ancillary service, when the transport is carried out on behalf of the supplier.
  • If the buyer already disposes of the goods at the time of the transport and only additionally engages the supplier to carry out the transport, the transport costs must be treated as a separate transaction (https://bit.ly/3SkRB9L).

SLOVAKIA

AMENDMENTS TO THE VAT ACT/FISCAL CODE

• As of 2023/2024
  • The financial authorities presented testing and implementation phases concerning the real time e-invoicing.
  • The real time e-invoicing will be obligatory only for B2B, G2G and G2B transactions with the Ministry of Finance as of January 2023. Further public administration bodies will follow in separate phases. For B2B, B2C and G2C, it shall become obligatory as of January 2024.
  • The e-invoicing can be done either by using an accounting software or a web application (https://web-einvoice-demo.mypaas.vnet.sk/).