International - Indirect tax bytes

Algeria: The finance bill for 2024 includes a VAT exemption for the following: (i) fees for fixed internet access services; (ii) charges for hosting web servers in data centres in Algeria; (iii) website design and development costs; and (iv) maintenance and support costs relating to website access and hosting activities in Algeria. The exemption will apply through 31 December 2025.
Angola: The government has introduced a 10% special levy on “invisible” foreign exchange transactions. The levy applies to companies and individuals headquartered or domiciled in Angola that request a financial institution to transfer funds for payments related to contracts for the provision of foreign technical assistance services or management services, subject to certain exceptions. The financial institution functions as the withholding agent.
Bahamas: The Customs & Excise Department posted an announcement on “X” (formerly Twitter) to the effect that changes have been made to the passenger tax. The new rates apply as from 1 January 2024.
Belgium: The government published a draft law on 5 January 2024 that would introduce mandatory structured e-invoicing for B2B transactions in the country starting from 2026.
BES Islands: The annual turnover threshold for small businesses is increased from USD 20,000 to USD 30,000 as from 1 January 2024.
Bosnia-Hercegovina: The VAT registration threshold increased from BAM 50,000 to BAM 100,000 on 2 December 2023.
Brazil: On 20 December 2023, the congress approved a tax reform (as a constitutional amendment) that overhauls Brazil’s indirect tax system (for prior coverage, see the article in the October 2023 issue of Indirect Tax News). The reform restructures and simplifies the system, consolidates several taxes into a “dual VAT” system, introduces new levies and modifies some levies. Implementing legislation will have to be issued within 180 days.
China: New import and export tariffs apply for 2024.
Croatia: As from 1 January 2024, the VAT registration threshold increased from EUR 39,816.84 to EU 40,000. In addition, suppliers can elect to directly reduce the VAT base if a customer fails to pay, the supply is cancelled or the supplier grants a discount following the supply.
Denmark: New rules for applying the VAT reverse charge apply as from 1 January 2024 in transactions between Danish VAT-registered entities relating to the B2B supply of telecommunications services (e.g., telephone services provided over the internet, voicemail, internet access, etc.). The reverse charge applies when the primary purpose of the purchase of telecommunications services is resale and the purchaser's own consumption of the services is negligible. In this case, the purchaser is required to settle the VAT with the Danish tax authorities.
Egypt: The tax authorities issued guidance in November 2023 on the implementation of the VAT reverse charge on imported services. Companies carrying out import services transactions must register for VAT even if their activities are VAT-exempt and/or they do not meet the normal VAT registration threshold. Penalties apply for noncompliance.
European Union:
- Belgium, which assumed the Presidency of the Council of the EU on 1 January 2024, has released its Programme for the period 1 January - 30 June 2024. Indirect tax areas of focus include measures to reduce the VAT gap proposal, revising the Union Customs Code and furthering the revision of the EU Energy Taxation Directive.
- The EU payment service provider (PSP) directive applies as from 1 January 2024 with new reporting obligations on PSPs and the first report to be filed by 1 April. Under the rules, EU-established PSPs (e.g., banks, credit card providers) are required to keep records of the payments they process and their beneficiaries for three calendar years and share the data with the local tax authorities who will then share the data with the tax authorities in other EU member states. The data will be stored in a central database, the CESOP. The Directorate General for Taxation and Customs Union on 23 November 2023 updated the guidelines for reporting payment data from PSPs and transmission to the CESOP, as well as the FAQs.
- The Court of Justice of the European Union (CJEU) issued a decision in September 2023 in which it concluded that the mere fact that costs must be added to the customs value does not automatically mean that zero-rated VAT treatment may be applied to these services. The trader must be able to demonstrate that the services are related to the goods to be imported and that their value has been added to the customs value on which import VAT is due. Documents that can be used (specifically in the case of transport services) as proof include a CMR waybill, an invoice or a transport contract. The tax authorities may not require the submission of specific documents provided the documents supplied by the taxpayer can be deemed to be authentic and reliable. Thus, the entrepreneur can use any such documents supporting their claim to apply the zero rate.
France: The Finance Law for 2024 implements the Amending Directive to the VAT Directive (2020/285) into domestic law. Starting on 1 January 2025, taxable persons established in an EU member state can benefit from the VAT exemption regime in their state of establishment and in other member states provided the EUR 100,000 turnover ceiling is not exceeded. In addition, the introduction of mandatory e-invoicing and e-reporting obligations that was intended to apply as from 1 July 2024 is postponed; there will now be a phased in implementation depending on the size of the taxpayer, with new rules to be introduced between 1 September 2026 and 1 December 2026. The rules are expected to apply as from 1 September 2027 (or by the end of that year) for small and medium-sized enterprises.
Germany: A single use plastic tax that entered into effect on 1 January 2024 will be levied on the first-time provision of certain plastic items on the German market. Although the levy will not have to be paid until 2025, “manufacturers” within the meaning of the new law (including fillers, sellers and importers) and beneficiaries will have to register for purposes of the tax in 2024 and start collecting data/quantities of the relevant single-use plastic products for the first report. Penalties will be imposed for noncompliance. In addition, another plastic tax (i.e., the “EU Plastic Tax” (EU/Euratom Council decision of 14 December 2020)) has come back into focus since the current German government’s plans to finance the budget for 2024 became known. Until now, Germany has paid this tax (without apportionment) to the EU; as from 2025, the tax is to be passed on to polluters.
International: The OECD has announced that six more jurisdictions (Bermuda, Colombia, Faroe Islands, Indonesia, Mauritius and Monaco) have indicated they intend to implement the Crypto-Asset Reporting Framework (CARF) for the reporting and exchange of information with respect to crypto assets (for prior coverage, see the item in the Bytes column in the November 2023 issue of Corporate Tax News).
Ireland: The tax authorities released a new tax and duty manual on 29 December 2023 that contains guidance on record-keeping and reporting obligations of EU PSPs that facilitate cross-border payments. Starting in 2024, new record-keeping and reporting requirements apply to cross-border payments facilitated by PSPs that provide services in the EU. PSPs must report the information to the relevant tax authorities, which then transmit the data to the Central Electronic System of Payment information database.
Italy: The 2024 budget law, which applies as from 1 January 2024, defers the effective date of the plastic tax and the sugar tax to 1 July 2024 and increases to 0.4% the tax on financial assets held outside Italy in a privileged tax regime jurisdiction.
Latvia: The VAT registration threshold increased from EUR 40,000 to EUR 50,000 on 1 January 2024.
Luxembourg: The VAT authorities published a circular on 27 December 2023, which confirms the expiration of temporarily reduced VAT rates. With the exception of the super-reduced rate, the VAT rates had been reduced in 2022 to apply to calendar year 2023. As a result, the rates are as follows as from 1 January 2024:

New Zealand: The tax authorities announced in November 2023 that they are sending letters to GST-registered persons that regularly claim GST refunds. The following taxpayers will receive letters: (i) persons registered for GST for 12 to 24 months that filed regular GST refund returns from the time of registration; and (ii) registered persons who filed regular GST refund returns in the last 36 months. Recipients of the letters will be required to respond with a description of their taxable activities and an explanation for the regular GST refunds. If required, a voluntary disclosure should be filed to correct errors in the GST return.
Norway: VAT changes in the 2024 budget include the abolition of the zero rate VAT exemption for the sale and lease of hydrogen-based electric vehicles.
Philippines: A law published in the official gazette on 7 January and that takes effect 15 days later provides that a 12% VAT will apply to the sale or exchange of services.
Romania: As from 1 January 2024, electronic invoices much be issued through the Ro e-Factura system for all B2B supplies that have a place of supply in Romania (for prior coverage, see the item in the Bytes column of the October 2023 issue of Indirect Tax News). Penalties will be imposed for failure to comply.
Slovakia: The VAT registration will increase from EUR 49,790 to EUR 75,000 on 1 July 2024.
Spain: The government is phasing out a variety of reduced VAT rates that have been in force for specific supplies, such as supplies, imports and intra-community acquisitions of natural gas, basic foods and electricity.
Sri Lanka: Budget 2024 includes a proposal to increase the standard VAT rate from 15% to 18% and to remove many exemptions.
Zambia: Mandatory electronic invoicing will be introduced for VAT and income tax purposes as part of the 2024 budget.