Latest news, March 2020

DOMESTIC NEWS IN BRIEF

• The financial administration published an attachment to EC sales lists for the reporting of transfers of own goods to another member state within the simplification procedure applicable to consignment stock arrangements. The duty to fill in this attachment applies to all entities that have decided to apply the direct effect of the EU VAT Directive and proceed in accordance with these simplification rules as early as from January 2020.
   
• The implementing regulation regarding the special mini-one-stop-shop (MOSS) regime was published in the EU Official Journal. According to the regulation, effective from 1 January 2021, this regime should extend to persons liable to tax and carrying out distance sales of goodsAn amendment to the Corporations Act was published in the Collection of Laws under No. 33/2020 and will enter into effect on 1 January 2021.
   
• An act to avoid double taxation in relation to Taiwan was published in the Collection of Laws under No. 45/2020 and will be effective from 2021.
   
• The General Financial Directorate published information defining the method of confirming documentation on the sale of goods when refunding VAT to third-country individuals upon the export of goods.
   
• The financial administration disclosed information on a new reporting duty from 1 July 2020 in relation to reportable cross-border arrangements (DAC6).
   
• The financial administration published an overview of goods and services to which a reduced 10% VAT rate will apply from 1 May 2020.
   
• On 18 March, the budget committee will discuss motions to amend the Act on Digital Tax. Based on information that has been made available to us, the Ministry of Finance is considering the postponement of the act’s effectiveness to 1 January 2021 and the reduction of the digital tax rate to 5%.

FOREIGN NEWS IN BRIEF

• The European Commission has launched a public consultation on data collection and exchange of tax information on the digital platform economy. The consultation is examining whether recommendations from the consultation could be included as a possible amendment to the Directive on Administrative Cooperation (2011/16) (DAC). Such an amendment is needed to provide tax administrations with information to identify taxpayers that generate revenues through the digital platform economy.
   
• Uruguay, Cyprus, Qatar, and Saudi Arabia have ratified the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS (MLI). MLI entered into force for Mauritius and Latvia and has been signed by North Macedonia. Russia had reservations when signing the MLI. The MLI was passed by the Kazakh parliament. The Czech Republic is also among the states that have already ratified the MLI (for the Czech Republic, the MLI will enter into force three months after depositing the instrument of ratification with the OECD).  In total, the MLI has been signed by 94 jurisdictions and has entered into force for 36 jurisdictions.
   
• The European Commission has sent formal notice letters to fifteen EU member states (Belgium, Cyprus, Czech Republic, Estonia, France, Greece, Italy, Luxembourg, Latvia, Poland, Portugal, Romania, Spain, Sweden and the United Kingdom) for their failure to transpose EU Directive 2018/822 on mandatory disclosure rules (DAC6) into domestic law.
   
• The EU Council has revised the EU list of non-cooperative jurisdictions for tax purposes. In addition to the 8 jurisdictions that were already listed, the EU also decided to include the following jurisdictions in its list: Cayman Islands, Palau, Panama and Seychelles. These jurisdictions did not implement the tax reforms to which they had committed by the agreed deadline.
   
• The Council has adopted two VAT rules reforms. The first reform concerns the detection of tax fraud in cross-border e-commerce transactions. The new rules will enable member states to collect records made electronically available by payment service providers such as banks in a harmonised way. In addition, a new central electronic system will be set up for the storage of payment information and for the further processing of this information by national anti-fraud officials. The second reform concerns VAT rules applicable to small businesses. The new rules will reduce the administrative burden and compliance costs for small enterprises and help create a fiscal environment which will help SMEs grow and trade across borders.