GERMANY – VAT Rate Reduction : 1 July 2020 – 31 December 2020

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Temporary VAT rate reduction in Germany

 

On June 3, 2020, Germany announced a temporary decrease in VAT Rates for the period July 1, 2020 to December 31, 2020, as part of a significant stimulus package as the country begins emerging from the COVID-19 crisis.

The rate reductions are as follows:

  • The Standard Rate will be reduced from 19% to 16%
  • The Reduced Rate will be reduced from 7% to 5%

 

This will of course, effect organizations’ billing, purchasing and reporting processes at a bare minimum. There is a very short lead time to update systems with the adjusted rates.

Temporary VAT Rate reductions were implemented in many EU countries following the 2008 financial crisis. There is a strong probability that more European countries will be following in Germany’s footsteps by temporarily reducing their VAT Rates.

It is not uncommon that initial decreases in VAT rates are followed by increase in VAT rates.

Companies should be aware and remember to adjust the temporary rates back to the VAT rates once the VAT Rates prior to the temporary reduction once the reduction period has completed.

EU Directive 13 VAT Claims – Deadline JUNE 30

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FRANCE Deadline for EU 13th Directive VAT claims extended to September 30, 2020 All other EU deadlines claim submission deadlines remain the same JUNE 30, 2020 Businesses established outside of the European Union (EU) and not registered for VAT in any European Union member state are eligible to claim and be refunded VAT incurred on […]

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COVID 19 – Canadian Government Updates

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Emergency Wage  Subsidy – CEWS        APPLICATIONS FROM APRIL 27

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VAT numbers and ECSL returns will become a material requirement to qualify intra-Community supplies as zero-rated

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VAT numbers and ECSL returns will become a material requirement to qualify intra-Community supplies as zero-rated. The EU will harmonize VAT rules on four key areas of international trade. Most businesses involved in intra-Community trade should review and take action from these changes. This article is part of a series of Marosa articles about the […]

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Quebec Taxing Digital and Virtual Marketplace Sellers – Updates for QST Registration

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Quebec has changed the registration requirements for certain non-resident suppliers located outside of Quebec, effective January 1, 2019. The same changes were implemented for Canadian businesses located outside of Quebec from September 1, 2019.

Suppliers located outside of Quebec who sell more than $30,000 per annum of any of the following directly to consumers (i.e., individuals making the purchase for personal use) residing in Quebec:

  • services,
  • intangible properties (e.g., electronic subscription to software or access to digital content),
  • goods (but only if registered for GST/HST purposes).

are required to be registered for, and to collect and remit QST.

This requirement does NOT apply if the sales made to consumers in Quebec on an annual basis are $30,000 or less.

  • The $30,000 test is determined on a rolling 12-month period over time.
  • The $30,000 does not include sales of services and intangible properties made in Quebec through a third-party digital platform. In that instance he digital platform may now be required to register for QST purposes, and charge the tax on the sales it makes on behalf of the non-resident business.

 

 

Australia: GST on Imported Goods and Digital Products

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Since the introduction of the Australian goods and services tax (“GST”) from 1 July 2000, Australian consumers have traditionally enjoyed the benefit of not having to pay GST on their purchases of digital products, services or goods from overseas suppliers except for imported goods with a value of greater than AU$1,000. Given the increased popularity of online transactions in the past decade and the Australian Federal government’s objective of increasing the competitiveness of Australian businesses, this traditional landscape will change as follows:

(i) GST on imported services and digital products

From 1 July 2017, the sales of digital products and/or services to Australian end customers (and/or Australian businesses who are not registered for GST) by a foreign resident will be subject to Australian GST if the foreign resident meets the registration turnover threshold (that is, the sales to these Australian consumers in a 12 month period exceed AU$75,000 or more).

If this is the case, the foreign resident will be liable to report and pay GST (at 10%) to the Australian Taxation Office (“ATO”). The GST will be 1/11th of the amount which the foreign resident charges the Australian consumer for the digital products and/or services.

(ii) GST on low value imported goods

From 1 July 2018, Australian GST will be extended to low value imports of physical goods (with a customs value of AU$1,000 or less) purchased by Australian end consumers (and/or Australian businesses not registered for GST) from a foreign resident. Similarly, the non-resident supplier of the goods will be liable to report and pay GST (at 10%) to the ATO provided they meet the registration turnover threshold of AU$75,000.

The existing law regarding Australian GST on imported goods with a customs value greater than AU$1,000 has not changed. That is, GST is collected by the Australian Customs and is paid by the importer of the goods (being the Australian customer).