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Government Approved the Rate on Installment Plan on VAT Payment for the Import of Production Equipment

Published: 23/02/2018 | news

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On February 21, 2018, the Resolution of the Cabinet of Ministers of 7.02.2018 No. 85 came into force, approving the procedure for granting an installment plan for VAT payment when importing the equipment for own production into Ukraine (hereinafter - Procedure) in accordance with clause 65, subsection 2, section XX of the TCU, No.2245-VIII of 07.12.2017. The Procedure provides that in order to receive an installment plan for the payment of value-added tax, when importing equipment into the customs territory of Ukraine, the payer is obliged to submit an application to the customs office, which form must be also approved by the above-mentioned resolution. The application must specify the term of the installment plan, name, quantity, cost and code of the the UCG FEA of the imported equipment, its location, the purpose of importation, the CFEA of the payer, etc. The payer must attach the following to the application: business project, business plan or other document with a detailed description of the technological process (with economic calculations) and expected performance; available conclusions of state bodies, expert institutions, organizations, state standards and...

MFU Has Developed a Draft Resolution for the Operation of VAT Risk System

Published: 13/02/2018 | news

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#Taxation #Taxes #VAT

The Ministry of Finance of Ukraine has developed a draft Resolution on the further operation of the VAT risk system. This mechanism is a necessary measure aimed at the prevention of VAT embezzlement schemes and uninterrupted process of automatic VAT refund. We remind that in December last year, the work of the VAT risk system was suspended in order to develop a coordinated effective solution which would not entail new risks. So, the MFU together with the SFS have developed and agreed upon a decision that was made public on the official website of the Ministry on February 9, for public discussion. Now the draft Resolution is under consideration of people’s deputies of the Tax and Customs Policy Committee. It includes the following changes: In order to reduce the cases of suspension of the registration of tax invoices, a “cutoff criterion” of 3% and a threshold of the volume of supply for the month of 500 thousand UAH are established. Earlier, the coordination of evaluation criteria continued for some time, that allowed some payers to use a fictitious loan. It is proposed the SFS to establish criteria for risk assessment for a prompt response. In order to ensure the...

EU Mitigates the Rules of Taxation for Small Business

Published: 24/01/2018 | news

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#EU #Taxation #VAT

The European Union announced its intention to expand the powers of Member States with respect to changing the rates of VAT and mitigating the rules of taxation for small businesses. These changes are only part of a large-scale plan on revision of the European VAT system aimed at creating a single VAT zone. We remind that the general rules of VAT in the European Union were agreed in 1992. According to the European Commission, they became obsolete and, in addition, too limited. The EU Commissioner for Taxation, Pierre Moscovici, noted: “Today we are taking another step towards the creation of a single VAT zone in the European Union with simplified rules for our Member States and, in particular, companies. These proposals will give EU countries greater freedom with regard to application of preferential VAT rates to specific products or services. At the same time, they will enable to reduce the number of bureaucratic mechanisms for small enterprises engaged in cross-border activities, thereby contributing to their growth and job creation”. The Commission proposed to give EU Member States the opportunity to introduce certain benefits, along with a standard VAT rate of at least...

Cyprus Imposes 19% VAT on Building Land

Published: 19/01/2018 | news

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#Cyprus #Taxes #VAT

From January 2, 2018 in Cyprus, the new VAT Law has entered into force, providing for changes in the main VAT Law No.95(I)/2000. The document introduces VAT at a standard rate for the sale of building land, as well as leasing/rental of business premises on the conditions specified in the law. It also introduces the reverse charge mechanism for VAT-subject supplies of land and property under a loan restructuring/force-sale arrangement, which will mostly influence financial institutions. Imposition of VAT at the standard rate of 19% on building land The standard VAT rate of 19% will be applied in the following cases: transfer of ownership; transfer of indivisible land portion; transfer of ownership via contract or sale agreement or agreement which specifies that the ownership will be transferred in the future or leasing agreement with buyout option. The above shall apply to non-developed building land which is meant for the construction of one or more structures in the course of carrying out a business activity. More clarifications are still needed for the application of the law, such as the circumstances whereby a transfer is not considered to be a part of a person’s...

Ministry of Finance Reforms Institution of Financial Liability for Tax Violations

Published: 30/11/2017 | news

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#Cyprus #VAT

Recently the Ministry of Finances of Ukraine, together with the experts from the interactive tax platform TaxLink, has developed a bill “On Amendments to the Tax Code of Ukraine regarding the improvement of the prosecution system for violation of tax laws”. The essence of the document is to reform the liability for tax violations provided by the current legislation. First of all, the bill introduces more effective mechanisms for the settlement of tax disputes in cases when the violation of tax law happened not due to the fault of the payer. In addition, it is proposed to introduce the principle of fault liability of taxpayers which is inherent in all branches of Ukrainian legislation, in contrast to the current liability of the payer without fault. Therefore, the last one will be considered guilty if found guilty that he was able to comply with the relevant rules and regulations, but did not take the necessary measures for this. In this regard, when considering the verification materials by the supervisory authority, the documents of the taxpayer may be subject to the examination that show his due diligence. Another significant innovation is the introduction of the system of...

Spain increases the burden of the corporate tax

Published: 06/12/2016 | news

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#Spain #Taxation #VAT

The government of Spain declared growth of a budget income on December 2, that will increase tax revenues from corporations. In spite of the fact that recently created government decided to leave the 25 percent corporate tax rate untouched, Spain will limit the corporate tax deductions. They will contribute the most part of 7 billion euros in the new income at which the government is aimed. The Budget imposes new limits on loss carry backs and restrictions for use of the pecuniary losses connected with shareholdings in the companies located in "tax harbors or in the territories with not appropriate level of a tax" in number with other changes. New measures of the corporate tax, as expected, raise the additional amount of 4.65 billion euros in revenue for the government. Besides, real estate value will be updated for property tax to increase revenues. Also, the government intends to lift a number of "guilty" taxes, including on alcohol, tobacco, and sweet drinks. Other changes are directed on modernization VAT and the fight against fraud VAT. It includes a new reporting system of the VAT in real time which announced in 2014. Taxpayers will be obliged to report about...

HMRC publishes guidance on a tax-free trade

Published: 09/08/2016 | news

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#United Kingdom #VAT

The tax authority and the Tax and Customs Service of the United Kingdom released a practical guide by the UK's special scheme which allows to non-EU countries taxpayers to reimburse VAT on goods purchased in some UK stores. VAT Notice №704 / 1, issued August 7 discusses how those who live outside the European Union may return the value added tax (VAT) paid for goods purchased in stores of Great Britain, which in turn provide retail products without VAT. Tax free retail trade allows individuals traveling to the European Union (EU) to obtain a VAT refund on goods bought in the UK and take home. However, it can not be used for any service. In most instances store or refund from the company will charge a payment for use of the taxpayer in its stores and tax-free goods can take the fee out of the money paid to the VAT refund. The manual discusses the right to use this circuit, which products satisfy the set requirements, the time required for export, as well as the requirements for receiving the refund. Author: Sergey Panovmanaging partner Finance Business...

EU, a new VAT plan

Published: 12/04/2016 | news

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#EU #Taxation #VAT

The European Commission has issued a VAT Action Plan which sets out plans for the next two years for the modernization of VAT in the European Union. The Commission should propose legislation and to introduce common EU-wide measures to simplify the rules to help small and start-up businesses in e-commerce and streamline audits for companies engaged in this sector by the end of 2016. In addition, the Commission will seek to improve cooperation between tax administrations including countries outside the EU, customs and law enforcement agencies, in order to strengthen the capacity of tax administrations to combat fraud. The Commission will also provide an opportunity to have a lot of freedom for setting rates of value added tax for the states of the European Union. Existing rules on tax rates that have been developed over two decades ago, in order to ensure neutrality, simplicity and adaptability to the VAT system. The Commission has proposed the freedom to establish rates subject to appropriate safeguards to prevent excessive complexity and distortions of competition and that there was no impact on the functioning of the single market. The Commission has put...

Scotland, tax issues

Published: 28/03/2016 | news

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#Scotland #Taxation #VAT

Institute of Chartered Accountants of Scotland published an article that explains the problems facing the country before the devolution of tax powers. The document, prepared by the Tax Committee, calls for the publication of five-year RoadMap which explains the purpose of the Scottish fiscal policy. Currently, the Scottish Parliament is responsible for the Scottish income tax rate applicable to the April 6, 2016. The UK government will deduct £ 0.10 from three British income tax rates. The Scottish Parliament will be able to charge a Scottish rate that will apply equally across these bands. The rate will be set at 10 percent which means that there will be no change in the level of tax for individuals pay. But in April 2017, the Scottish Parliament will be able to set the rate over income tax bands. According to the Tax Committee, "if the income tax rate will deviate from the British then it needed for clear explanations and instructions to reassure taxpayers." Furthermore, from 2019-20 Scottish Government will assigned a decrease in the standard rate from 0.10 pounds to 0.25 pounds. Tax Committee said that "the purpose of assignment of VAT is to harmonize...

Additional VAT withholding agents designated

Published: 10/03/2016 | news

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#Panama #Tax planning #Taxation #VAT

The Government has enacted regulations, based on paragraph 4 of the Tax Code, extending VAT withholding mechanisms to enterprises explicitly appointed by the Revenue Office as withholding agents that meet the criteria of making annual purchases of USD 10,000,000 or greater. This mechanism also applies to entities that administer processing and payments through credit and debit card platforms. Under the VAT withholding mechanisms, VAT withholding agents must withhold a portion of the VAT charged to them in respect of supplies of goods and services, and remit it to the Revenue Office instead of paying the total VAT applicable to the supplier of service provider. The amount to be withheld will be equivalent to 50% of the tax rate applicable to the transaction. Administrators or issuers of credit and debit cards that manage the processing of payments are also required to act as withholding agents of the VAT triggered by the sale of taxable goods and services paid by way of a credit or debit card. During a transitional period, which will run from 1 February to 31 December 2016, the amount to be withheld will correspond to 2% of the total sales transaction. Starting 1...

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