International Indirect Tax Guide 2016

International
indirect tax guide

2016
Contents
01
Ready to respond:
Managing complexity and
change in indirect taxation
05
Customs duty
08 Indirect tax overview
Africa
09
Botswana
11 Egypt
13 Kenya
17 Mauritius
21 Morocco
25 Mozambique
29
South Africa
33 Tunisia
37 Zambia
41 Zimbabwe
Americas
47
Argentina
51 Brazil
55 Canada
59 Chile
63
Costa Rica
67 Mexico
69 Panama
73 Peru
77
Puerto Rico
83
United States
87 Uruguay
Asia Pacific
91
Australia
95 Bangladesh
99 Cambodia
105 China
111 Hong Kong
113 India
119 Indonesia
123 Japan
127 Malaysia
131 New Zealand
135 Pakistan
139 Philippines
145 Singapore
149 South Korea
153 Taiwan
157 Thailand
161 Vietnam

Europe
167 Albania
171 Armenia
175 Austria
181 Belgium
189 Channel Islands Jersey
193 Cyprus
199 Czech Republic
205 Denmark
211 Estonia
217 Finland
221 France
225 Germany
231 Greece
237 Hungary
243 Iceland
247 Ireland
253 Israel
257 Italy
262 Kazakhstan
267 Republic of Kosovo
271 Latvia
273 Liechtenstein
277 Lithuania
283 Luxembourg
289 Macedonia
297 Malta
297 Netherlands
309 Poland
315 Portugal
321 Romania
329 Russia
333 Serbia
337 Slovakia
343 Spain
349 Sweden
355 Switzerland
359 Turkey
363 Ukraine
367 United Kingdom

Middle East
375 Gulf Cooperation Council
375 Bahrain
375 Kuwait
375 Oman
375 Qatar
375 Saudi Arabia
375 United Arab Emirates
377 Contacts
This information has been provided by Grant Thornton member firms within Grant Thornton International Ltd as of April 2016 and is for
informational purposes only. Grant Thornton International Ltd cannot guarantee the accuracy, timeliness or completeness of the data
contained herein. As such, you should not act on the information without first seeking professional tax advice from one of the contacts at
the rear of the publication.
Ready to respond:
Managing complexity and change
in indirect taxation
Indirect taxation is becoming ever more complicated, varied between jurisdictions and prone to
government tinkering. And, the bar for compliance is rising all the time. Getting on top of the
complexity and change is not only vital in avoiding mistakes, audits and disputes, but also enabling
your business to move into new markets and manage cash flows efficiently. So how can your
business put management of indirect tax onto a sustainable footing?
Its now five years since the landmark Hudson
Highland Group settlement in the US that was
indicative of the transformation of the ground
rules for sales and use tax (SUT), value added tax
(VAT), goods and services tax (GST) and other
indirect tax compliance.
The Securities and Exchange Commission
(SEC) had moved against Hudson Highland
because of what it deemed to be the companys
failures to maintain appropriate internal controls
and underlying lack of accounting software
capable of calculating the amounts of sales taxes
owed.1
Up until then, the authorities had primarily
focused on whether the amounts of indirect
tax being collected, paid and reclaimed were
reasonable. The SEC order took regulatory
demands to a new level by not only requiring
companies to justify the numbers if challenged, but
also demonstrate that the data, systems, processes
and controls for carrying out the calculations are
fit for purpose.

Many other governments, regulators and tax

authorities quickly followed the US lead, for
example Senior Accounting Officer (SAO) rules
in the UK. And ten years on, the impact of these
new demands still reverberates around indirect tax
teams across the globe. When we recently asked
members of our VAT Club whats keeping you
awake at night, they said that their number one
worry is a lack of appropriate systems or controls
for VAT/GST (see Figure 1).
SEC Accounting and auditing enforcement Release No. 3226 10 January

2011
1
International indirect tax guide 1
Ready to respond
Figure 1 What indirect tax issues keep you awake at night? (%)
Lack of appropriate systems or controls for VAT/GST
42
Lack of visibility of global indirect tax compliance
40
Audits from tax authorities
38
Changes in VAT/GST rules
28
Implementation of new VAT/GST regimes
24
New VAT/GST reporting requirements
22
Historic liabilities and penalties
18
Changes in VAT/GST rates
12
Source: 50 companies taking part in the Grant Thornton VAT Club Survey 2015
State of flux
The complications of indirect tax compliance have

been further heightened by the frequent shifts in
rates, rules and how theyre applied.
Many governments have been lowering
corporate tax in a bid to attract inward investment,
while raising indirect tax rates to compensate
for the loss of revenue. The rapid growth in the
digital economy and ever more extended global
supply chains have in turn increased the number of
countries in which even relatively small companies
have a taxable presence. With this presence or
nexus comes the need not only to register for
indirect tax, but understand the vagaries of the
local rules and ensure appropriate systems and
controls are in place to calculate and report the
right amounts at the right times.
Towards self-assessment
Now were at a fresh watershed as the focus of

taxation as a whole shifts from where goods and
services are sourced to where theyre consumed.
This is reflected in recently endorsed new OECD
International VAT/GST Guidelines. Within
indirect taxation, this trend is already reflected
OECD/G20 Base Erosion and Profit Shifting Project Addressing

the Tax Challenges of the Digital Economy Action 1: 2015 Final Report
2
2 International indirect tax guide
in the growing adoption of reverse charge

mechanisms (sometimes referred to as tax shift
or self-assessment), both for domestic and
international business-to-business transactions.
Under this approach, the receiving business
calculates and pays the indirect tax on behalf of
the supplier. While reverse charge mechanisms can
often simplify compliance and negate the need for
a business to register in foreign jurisdictions,
Reverse charge mechanisms can ease the
compliance burden on companies that supply
a number of different markets by reducing the
amount of jurisdictions in which they have
to register and report. But there is often an
accompanying compliance burden to evidence that
the reverse charge can indeed apply, eg obtaining,
validating and retaining customer VAT numbers.
In addition, the companies they sell to face more
complex and extended calculation, monitoring
and self-assessment.
And now that the OECDs Base Erosion and
Profit Shifting (BEPS) Action Plan has recommended
that more jurisdictions introduce a reverse charge
mechanism for cross-border business-to-business
transactions2, the direction of travel is clear.
Ready to respond
Feeling the strain
The result is an indirect tax landscape in which

change is the only constant. Our VAT Club survey
not only highlights the pressure on systems and
controls, but also participants concerns over the
lack of visibility of global indirect tax compliance
and the risk of audit by tax authorities.
Indirect tax has generally been managed by
country or regional teams. But they may lack the
scalable skillsets and capabilities needed to deal
with new market entry and changing legislation
or the birds eye view of the organisationwide requirements to proactively manage the
compliance and reputational risks. In turn,
enterprise resource planning (ERP) systems can
often struggle with the frequency of registrations
and modifications, especially as the hundreds
of code changes needed every year have to be
identified and generally inputted manually by IT
resources.
1. Central team to anticipate changes and

develop proactive response
A central teams of indirect tax specialists can

liaise with business units to prepare for new
market entry and identify upcoming changes in
the tax rules.
Some organisations are moving indirect
tax into shared service centres to reduce costs
and speed up reporting. Others are setting up
dedicated centres of excellence. Either way,
central co-ordination is vital.
Teams on the ground will still be necessary
in some larger markets, but the general
compliance and strategic tax policy work can be
streamlined and centralised. The advantages of
a centralised approach include more systematic
compliance, focused use of resources and closer
alignment with business strategy. Centralised
team can also identify, share and apply best
practices from around the organisation.
Firm foundations
So how can your business create the capabilities

needed to manage this myriad of fast-changing
demands? Drawing on our survey findings, our
work with clients and analysis of the trends in
indirect tax regulation, we believe there are five
key steps to getting compliance on track:
2. Augment ERP with dedicated tools
Bolting dedicated indirect tax management

tools onto ERP systems can make it easier to
manage changes and new registrations across
multiple jurisdictions, while reducing the need
for manual entry.
Ready to respond
3. Workflow management tools to plan and

track payments
With so many moving parts, its important to

have visibility over whats required, when, and
whether the demands are being met on time.
The advantages not only include more assured
compliance, but also improved cash flows
through closer alignment between payments
and refunds.
4. Close co-operation with sales teams
Sales teams often hold some of the most

important indirect tax sensitive data such as
VAT/GST registration numbers, exemption
certificates, contractual term, and address
information. Its therefore vital that your
indirect tax teams work with their colleagues
in sales to collate, validate, store and share the
master data. In turn, input from indirect tax
specialists will be increasingly important in the
assessment and development of pricing and
market entry strategies.
5. Blueprint of documentation to demonstrate

compliance
Among the biggest risks are patchy or ad

hoc documentation. Its therefore important
to develop a systematic approach to systems
mapping and evidence gathering, which
includes a blueprint for how compliance is
maintained, the procedures for changes and
how these are overseen.
Up to speed
The yardstick for indirect tax compliance is

no longer just the sums, but the validity of the
calculations and the tax function behind them.
And while the goals posts keep moving, the onus
is very much on your business to prove that you
have the systems, processes and controls to keep
up to speed.
Greater centralisation, supported by strategic
technology tools and closer co-operation with
business teams, are at the heart of the more
systematic and proactive indirect tax management
approach needed to comply. Managing indirect
tax will still be demanding, but simply relying on
existing approaches and capabilities will make it
far more risky and taxing than it needs to be.
Customs duty
It is important to note the interaction between customs duty and other indirect taxes. Customs
duty is levied on the value of goods imported (and sometimes exported) into a country. There
are four key areas of customs compliance:
Classification Each product attracts
a commodity code, which is partially
harmonised globally. This commodity
code indicates the rate of duty to be paid at
import or export, as well as any restrictions
associated with the product.
Valuation - Although the rules for determining
the customs value of goods are harmonised
amongst World Trade Organisation (WTO)
members, countries are free to include or
exclude certain items such as freight and
insurance from the customs value. It is
therefore vital that traders understand the
valuation rules in the territories in which
they carry out import or export formalities.
Origin The origin of a product is determined
by a framework of rules set out by the WTO
and implemented at a national level. The rules
determine the origin of goods, which is used
in the allocation of quotas and other types
of restrictions.
Preference Rules of origin for
preferential duty rates (either by way of
unilateral preference schemes or a Free Trade
Agreement) are usually an enhanced version of
the standard rule of origin. The aim is to ensure
that in return for a duty reduction, goods are
genuinely made or processed in the country
from which they are exported.
Unlike some other indirect taxes, customs duty is

generally not recoverable and represents a bottom
line cost business. It is therefore important to
ensure that the correct rate of duty is applied.
There are special arrangements and procedures
that permit the importation of certain goods under
favourable or simplified conditions. These depend
on the nature of the goods, their origin, as well as
the designated use of the imported goods, such as
if they are used in the manufacture (processing) of
an (alternative) final product.
Duty rates vary globally, with some countries
using customs duties to account for a large
proportion of its fiscal revenue. A robust approach
to customs compliance is essential to any business
involved in international trade to ensure you pay
the correct amount of duty. Incorrect application
of customs rules and regulations can result in
under or over payments and in back-dated duty
demand. Different countries treat infringements
differently, with some treating customs
infringements as a serious crime resulting in
civil penalties and in the worst case scenario
criminal prosecution.
For further information on customs duty please contact:
Ian Worth
T +44 (0)20 7728 2174
E ian.worth@uk.gt.com
Ready to respond
Global indirect tax rates
Americas
Argentina
Standard rate: 21% Other: 27%, 10.5%, 5%, 2.5%
Brazil
Standard rate: 1%-37%
Other: 0%-365%, 0%-5% (other multiple rates also
apply)
Canada
Standard rate: 5%
Other: 0%
Chile
Standard rate: 19%
Costa Rica
Standard rate: 13%
Mexico
Standard rate: 16% Other: 0%
Panama
Standard rate: 7%
Other: 15%, 10%, 0%
Peru
Standard rate: 18%
Puerto Rico
Standard rate: 10.5% Other: 1%, 0%
United States
Sales tax rates vary across the country
Uruguay
Standard rate: 22% Other: 10%, 0%
Europe
Africa
Botswana
Standard rate: 12%
Egypt
Standard rate: 10%
Kenya
Standard rate: 16%
Mauritius
Standard rate: 15%
Morocco
Standard rate: 20%
Mozambique
Standard rate: 17%
South Africa
Standard rate: 14%
Tunisia
Standard rate: 18%
Zambia
Standard rate: 16%
Zimbabwe
Standard rate: 15%
Other: 0%
Other: 5-15%
Other: 0%
Other: 0%
Other: 14%, 10%, 7%, 0%
Other: 5%, 3%, 0%
Other: 0%
Other: 12%, 6%, 0%
Other: 0%
Other: 0%
Albania
Standard rate: 20%
Other: 0%
Armenia
Standard rate: 20%
Other: 0%
Austria
Standard rate: 20%
Other: 13%, 10%
Belgium
Standard rate: 21%
Other: 12%, 6%, 0%
Channel Islands Jersey
Standard rate: 5%
Other: 0%
Cyprus
Standard rate: 19%
Other: 9%, 5%, 0%
Czech Republic
Standard rate: 21%
Other: 15%, 10%
Denmark
Standard rate: 25%
Other: 5%, 0%
Estonia
Standard rate: 20%
Other: 9%
Finland
Standard rate: 24%
Other: 14%, 10%, 0%
Ready to respond
Middle East
Asia Pacific
Kuwait
Standard rate: No VAT system
Other: No VAT system
Australia
Standard rate: 10%
Other: 0%
Bangladesh
Standard rate: 15% Other: 7.5%, 5.5%, 5%,
4.5%, 0%
Cambodia
Standard rate: 10%
Other: 0%
China
Standard rate: 17%
Other: 0%-13%
Hong Kong
Hong Kong does not currently levy any VAT, GST
or sales tax.
India
Standard rate: 1% to 15%
India has a dual taxation structure, which results in
the levy of multiple indirect taxes by the central and
state government(s).
Indonesia
Standard rate: 10% Other: 0%-4%
Japan
Standard rate: 8%
South Korea
Malaysia
Standard rate: 6%
Other: 0%
New Zealand
Pakistan
Standard rate: 17% (goods), 14-16% (services)
Other: 0%
Philippines
Singapore
Standard rate: 7%
Other: 0%
Taiwan
Standard rate: 5%
Other: 20/25%, 2%, 1%, 0%
Thailand
Standard rate:7%
Other: 0%
Vietnam
France (Corsica1 and Overseas territories2)

Standard rate: 20% (20%1 and 8.5%2)
Other: 10%, 5.5%, 2.1% (13%, 10%, 2.1%, 0.9%)1,
(2.1%, 1.75%, 1.05%)2
Germany
Standard rate: 19%
Other: 7%
Greece
Standard rate: 23%
Other: 13%, 6%
Hungary
Standard rate: 27%
Other: 18%, 5%
Iceland
Standard rate: 24%
Other: 11%, 0%
Ireland
Standard rate: 23%
Other: 13.5%, 9%, 4.8%, 0%
Italy
Standard rate: 22%
Other: 10%, 5%, 4%, 0%
Kazakhstan
Standard rate: 12%
Other: 0%
Latvia
Standard rate: 21%
Other: 12%, 0%
Liechtenstein
Standard rate: 8%
Other: 3.8%, 2.5%
Luxembourg
Standard rate: 17%
Other: 14%, 8%, 3%
Macedonia
Standard rate: 18%
Other: 5%
Malta
Standard rate: 18%
Other: 7%, 5%, 0%
The Netherlands
Standard rate: 21%
Other: 6%, 0%
Poland
Standard rate: 23%
Other: 8%, 5%
Portugal (Madeira1 and Azores2)
Standard rate: 23% (22%1 and 18%2)
Other: 13% (12%1 and 9%2), 6% (5%1 and 4%2)
Romania
Standard rate: 20%
Other: 9%, 5%
Russia
Standard rate: 18%
Other: 10%, 0%
Serbia
Standard rate: 20%
Slovakia
Standard rate: 20%
Spain
Standard rate: 21%
Sweden
Standard rate: 25%
Switzerland
Standard rate: 8%
Turkey
Standard rate: 18%
Ukraine
Standard rate: 20%
United Kingdom
Standard rate: 20%
Other: 10%, 0%
Other: 10%
Other: 10%, 4%
Other: 12%, 6%
Other: 3.8%, 2.5%
Other: 8%, 1%
Other: 7%, 0%
Other: 5%, 0%
Indirect tax overview

Africa
Africa
Botswana
Standard rate: 12%
Egypt
Standard rate: 10%
Kenya
Standard rate: 16%
Mauritius
Standard rate: 15%
Morocco
Standard rate: 20%
Mozambique
Standard rate: 17%
South Africa
Standard rate: 14%
Tunisia
Standard rate: 18%
Zambia
Standard rate: 16%
Zimbabwe
Standard rate: 15%
Other: 0%
Other: 5-15%
Other: 0%
Other: 0%
Other: 14%, 10%, 7%, 0%
Other: 5%, 3%, 0%
Other: 0%
Other: 12%, 6%, 0%
Other: 0%
Other: 0%
In South Africa,
there has been huge debate
in the country that came about as
a result of the Davis Tax Committees
suggestion to increase the standard
rate in order to make up the fiscal
deficit. This was only a recommendation
by the committee and it is not clear
if the government will decide
to increase the rate.
The Egyptian
government have
announced the introduction
of a VAT law that will replace
the existing general sales
tax system. However, the
implementation dates have
yet to be set.
Botswana
Indirect tax snapshot
What are the current rate(s) of indirect tax?
Standard rate of 12% for most goods and services.

Zero-rated are charged on the following supplies:
export of goods and services
petrol, diesel oil and illuminating paraffin
sorghum or maize for human consumption that is not cooked as a meal or prepared as a food
pesticides and fertilizers
basic food items such as brown bread, fresh vegetables and fruits (in natural state) rice (husked,
milled, polished, glazed, parboiled or broken), samp (not further prepared / processed); cattle,
sheep or goat milk not concentrated, condensed, evaporated, sweetened, flavored or cultured;
bread flour (white, brown or whole wheat)

tractors used for farming business

goods or services for the personal or official use of the President or any dependent of the
Presidents family

going concern.
Supplies of residential accommodation, education services, financial services and prescription drugs
are charged as exempt supplies.
Are there any confirmed or anticipated changes to

these rates?
No.
What is the principal indirect tax?
In Botswana, Value Added Tax (VAT) is the principal indirect tax and it is charged and collected based on
the invoices generated and issued by the business.
Is there a registration limit for the tax?
Yes. The registration limit is based on the taxable annual turnover. Once the threshold is met, a person is
required to register. The threshold will be P1,000000 per annum. A person can also register voluntarily if
their vatable turnover is above P500,000.
Does the same registration limit apply to

non-established businesses?
A non-established business need not register for VAT.
Does a non-established person need to appoint a

fiscal representative in order to register?
No. A non-established person is a person or business not situated in Botswana hence there is no need to
appoint a representative.
How often do returns have to be submitted?
A registered person is required to submit VAT returns on a monthly or bi-monthly basis based on the
annual turnover of the business.
Botswana
Are penalties imposed for the late submission of

returns/payment of tax?
Yes. There are penalties for late submission of VAT returns and interest for the late payment of VAT dues.
Are any other declarations required?
Yes. For goods or services entered in Botswana an import declaration needs to be provided to the
Commissioner General at the time of import.
Are penalties imposed in other circumstances?
Yes. Penalties can be imposed on false or misleading information or statements.
Can the tax incurred by overseas businesses be

claimed if they are not registered in your country?
No. Tax can only be claimed by business registered in Botswana.
Deduction of VAT
Supply or import of good or services for entertainment purposes or provision of entertainment are
not allowed for VAT deduction.
Supply or import of passenger vehicle with seating capacity of nine or few including double cab
vehicle.
Is there any specific legislation to tax non-resident

supplies of electronically supplied/digital services
to private consumers resident in your country?
There is no specific provision to tax non-resident supplying electronic/digital services to private

consumers. However the recipient of import services shall be required to declare with the revenue
authority import services received and pay the VAT on the value of import.
For further information on indirect tax in Botswana please contact:

Rajesh Narasimhan
T +267 395 2313
E rajesh.narasimhan@bw.gt.com
Rebecca Sanchez
T +267 395 2313
E rebecca.sanchez@bw.gt.com
Egypt
The Egyptian government have announced the introduction of a VAT law that will replace the existing general sales tax system.
However, the implementation dates have yet to be set. Please find the current sales tax rates included below.
Item
Collection unit
Tax rate
The Services of hotels and tourist restaurants other than the free services rendered
by such bodies to the workers thereof
Value of invoice
10%
Services of tourist transportation companies.
Value of invoice
10%
Telex and Fax Services
Value of receipt
10%
Air conditioned means of transportation between Governorates ( buses, railway)
Value of ticket
5%
Sound and Light show services
Service fees
10%
Use of sound and Light companies utilities
Service fees
10%
Artistic Agent services in public and private parties
Value of contract
5%
The services of fixed phones, local telegram to the public, government cabins
etc, other than mobile phones
Value of invoice
5%
Other Communication services

Value of invoice
a) Communication services either national or international by mobile phones either
by invoice, prepaid card or any means of collection.
b) Services of international communications, telegram, information communication
and international telephone calls by fixed phones
a) 15%
b) 10%
Services of installation of telephone connections and fittings, wire and wireless and others
Value of receipt
10%
Processing for a third party
Service fees
10%
Hiring private cars services
Service fees
10%
Express mail services
Value
10%
Services of cleanliness and private security companies
Value
10%
Using of highways
Duty value
10%
Intermediary in sale of real estate
Value of service
10%
Intermediary in the sale of cars
Value
10%
For further information on indirect tax in Egypt, please contact:

Hossam Hilal
T +2 02 257 44 810
E hhilal@gtegypt.org
Egypt
Kenya
Standard rate of 16% for most goods and services including importation of taxable goods and
services.
Zero-rated supplies include the exportation of goods and services and local supply of services to
public bodies, privileged persons and institutions.
Exempt services include banking, insurance and reinsurance, education, medical, veterinary, dental,
nursing, agriculture and supply of residential premises.
Are there any confirmed or anticipated changes

to these rates?
No anticipation of changes in rates.
Value Added Tax is the principal indirect tax applied in supply of most goods and services in Kenya.
Yes. There is a minimum annual turnover amount that when an entity attains, then it becomes mandatory
to register for VAT. Voluntary registration is also allowed for businesses that do not meet the set turnover
minimum.

Yes. The limit is applicable to non-established businesses making taxable supplies in Kenya.

Yes, non-established entities appoint, in writing, a tax representative to register for VAT on their behalf.
Returns are submitted monthly.

Yes. There is a fixed penalty for late submission of VAT returns. Late payment of tax attracts interest
which is compounded monthly.
Yes, total taxable sales made, total exempt sales and total zero rated sales need to be declared. For
purchases, total taxable, exempt and zero rated purchases are to be declared.
Yes. Any fraudulent acts for example omission or contravention of the VAT Act is liable to a fine or
imprisonment.

No. To claim refunds in Kenya, one has to be registered for VAT in Kenya.
Kenya
Place of supply
Value Added Tax (VAT) is the main type of indirect taxation in

Kenya. VAT shall apply to:
the taxable supplies of goods and services provided by a
registered person in Kenya
the importation of taxable good
a supply of imported taxable services.
A supply of service is made in Kenya if the place of business of

the supplier is in Kenya.
A supply is also considered to be made in Kenya if:
the recipient of the supply is not a registered person but the
services are physically performed in Kenya
the supply relates to immovable property in Kenya
the supply or transfer of: right to use, a copyright, patent or
trademark.
A VAT taxable event is to be considered at the time and place

of supply for goods or service.
VAT in Kenya is taxed at a standard rate of 16%.
The Act provides for zero rating of:
exportation of taxable goods and services
supply of taxable good under services to an export
processing zone (EPZ)
shipstores supplied to international sea or air carrier on
international voyage
supply of coffee and tea for export to auction centers
transportation of passengers by air carriers on international
flight
transfer of business as a going concern to a registered person
transfer of natural water by national or county government
supply of taxable goods and services to public bodies,
privileged persons and institutions.
The VAT Act also exempts a number of goods from VAT (list
of items is provided in The Act).
Exempt services include:
financial services (operation of accounts, issuing card, ATM
transactions)
insurance and reinsurance services excluding actuarial
services, services of assessors and loss adjusters and
management of insurance consultancy services
educational services
medical, veterinary, dental and nursing services
agriculture, animal husbandry and horticultural services
burial and cremation services
transportation of passengers excluding international air
transport and hired or chattered services
sale, lease, hire or letting of land or residential premises.
Time of supply
The time of supply for the purpose of VAT is the earlier of
the date on which the supply is made, the date upon which a
certificate is issued by a consultant, the date an invoice is issued
or when payment for the supply either in part or whole is
received.
Is there any specific legislation to tax nonresident supplies of electronically supplied/

digital services to private consumers resident in
your country?
Where a supply electronically or a digital service is provided
in Kenya and the place of business of supplier is not in Kenya
it shall be deemed to be made in Kenya if the recipient of the
supply is not a registered person and the services are electronic
services delivered to a person in Kenya at the time of supply.
These supplies of imported taxable services made to a resident
are taxable to VAT at a rate of 16%.
Treatment of imported services (reverse charge

VAT)
When a registered person receives services from a non-resident
supplier, then the registered person is deemed to have supplied
himself a taxable service.
This registered person should account for VAT on these
imported services.
Kenya
Yes, The VAT regime in Kenya provides that any person

making or expecting to make annual taxable supplies of KShs
5,000,000 or more is required to register for VAT.
Penalties and interest on VAT may arise in the event of a
person making the minimum taxable sales but fails to register
Yes, a fine not exceeding KShs 1,000,000 or imprisonment for a

term not exceeding three years or both is applicable if convicted
of the below offences:
falsification of VAT documents
failure to do the requirements under The Act
interfering with other persons or processes so as to
contravene the VAT Act
breach of duties as specified in the VAT Act
failure to prevent or report offences committed under the
for VAT.
Does the same registration limit apply to nonestablished businesses?

Yes, a non-resident person making taxable sales in Kenya
amounting to the set minimum is expected to appoint, in
writing, an agent who will register and account for VAT on
their behalf.
When a non-established person making the minimum
taxable supplies fails to appoint a tax representative within the
first month after making the supplies, then the commissioner
will appoint a tax representative on their behalf.

All taxpayers are required to file a VAT return electronically
every month. The due date for VAT return filing is 20th of the
following month.
VAT Act to the relevant authorities.
Can the VAT incurred by overseas businesses be

claimed if they are not registered in the Kenya?
No. An overseas business can only claim VAT in Kenya if they
have a tax representative who registered and accounts for VAT
on their behalf.
For further information on indirect tax in Kenya please contact:
Samuel Mwaura
E samuel.mwaura@ke.gt.com

Yes, a fixed penalty of KShs 10,000 is applicable on each
instance of late filing of the VAT return. Late payment of VAT
attracts 2% interest compounded monthly.

Yes, upon submitting a VAT return, a person is required to
include details of all the supplies made, standard VAT rate
supplies, exempt supplies and zero rated supplies during that
VAT period.
The person also includes details of the standard rate, exempt
and zero rated purchases made during the same period.
Kenya
Mauritius
Standard rate of 15%.

Some goods and services as specified in the VAT Act are zero rated or exempt.

these rates?
No.
Value Added Tax (VAT).
VAT registration is compulsory for businesses whose annual turnover of taxable supplies exceed or is
likely to exceed six million Mauritian rupees (MUR).

No, non-established businesses are not required to register in Mauritius.

Not Applicable.
Most registered persons are required to submit quarterly VAT returns. Returns are required to be
submitted on a monthly basis if annual turnover of taxable supplies exceed MUR 10m.

Yes. If a VAT return, or the corresponding payment, is submitted late penalty and interest can be imposed.
No.
Yes. Penalties can be imposed for a range of errors or omissions.
Mauritius

No.
Deduction of VAT
No input tax shall be allowed as a credit for the following (non-exhaustive lists):
good or services used to make an exempt supply
motor cars and other motor vehicles for the transport of not more than 9 persons.
accommodation or lodging, catering services, receptions, entertainment, and the rental or lease of
motor cars and other vehicles
maintenance or repairs of motor cars and other vehicles
good and services used by banks holding a banking license under the Banking Act 2004 for providing
services other than to non-resident and corporations holding a Global Business Licence under the
Financial services Development Act.

Value Added Tax (VAT) is the principal indirect tax in
Mauritius.
VAT is a tax on consumer expenditure and not a tax on
gains or profits. It is charged on most business transactions and
imports. VAT is ultimately borne by the final consumer. The
person that is selling the products or services will be responsible
for charging, collecting and paying the respective VAT to the
tax authority at each stage of the process.
Once a person is registered for VAT, they charge VAT
on all taxable supplies made to customers, except where the
customer is an exempt body as defined in the legislation. This
VAT is then payable to the Mauritius Revenue Authority
(MRA) as output VAT. The VAT registered person can claim
VAT paid as input VAT. The difference between the output
tax and the deductible input tax in each accounting period
will be the amount of VAT payable by the business to the tax
authority; the MRA. A tax refund can be claimed, where the
input tax exceeds the output tax.
A transaction is within the scope of VAT Act if the
following conditions are met:
in the case of goods, supply is the transfer of consideration
of the right to dispose of the goods as the owner; or in
the case of services, the performance of services for a
consideration
supply should be made in Mauritius:
a) in the case of goods, supply is treated as made in
Mauritius when the goods are moved from one place in
Mauritius to another place in Mauritius
b) in the case of services the services are performed or
utilised in Mauritius.
supply is made by a taxable person. A taxable person is a
person or entity who is registered for VAT in Mauritius, or
has a liability to become registered
supply is made in the course or furtherance of any business
carried on by that person or entity.
There are two rates of VAT that are applied to goods and
services in Mauritius; the standard rate (15%) and the zero rate.
In addition, some goods and services are exempted from tax.
Businesses that make exempt supplies are unable to claim all
the input tax that they incur. On the other hand, business that
makes zero-rated supplies will be entitled to claim input tax on
all of its purchases and imports.
Most goods imported into Mauritius are subject to VAT.
Where the importation is for business purposes and the
importer is registered for VAT, it may be possible to reclaim
the tax under certain conditions such as: tax was paid in error,
goods have been damaged or lost during the voyage and goods
have become defective or obsolete.
It is also important to note the interaction between VAT
and Customs duty. Customs duty is levied on goods that are
imported into the country. Unlike other indirect taxes, such
as VAT, once duty has been paid, it cannot be recovered by
the importer. VAT is charged on the value of the importation,
including any custom duty.

A person who either makes or intends to make taxable supplies
of goods or services in the course or furtherance of a business
must register for VAT if the value of its taxable supplies exceeds
or is likely to exceed the annual registration limit of six million
MUR. A person can register on a voluntary basis even if the
registration limit has not been exceeded.
As per S 15 (2) of the VAT Act, some professions require
for compulsory VAT registration even if the annual turnover
limit has not been reached. Examples of such professions
include accountants, auditors, engineers, architect, attorney,
solicitor, land surveyor, notary, opticians and project valuers.
Mauritius
Moreover, certain business activities require for compulsory

registration even if the annual limit has not been reached. These
businesses include:
banking by a company holding a Banking Licence in respect
of its banking transactions other than with non-residents
and corporations holding a Global Business Licence
management services by a holder of a management licence
in respect of services supplied other than those supplied to
corporations holding a Category 1 Global Business Licence
or a Category 2 Global Business Licence
services in respect of credit cards issued by companies other
than banks to merchants accepting such credit cards as
payment for the supply of goods or services.

Where a person who does not belong in Mauritius makes
a taxable supply of services which are performed or
utilised in Mauritius, to a registered person, then all the
same consequences shall follow under the VAT Act as if
the registered person had himself supplied the services in
Mauritius and that supply were a taxable supply (reverse charge
mechanism).
The normal VAT registration limit does not apply to
businesses that are not established in Mauritius.

This is not applicable in Mauritius.
Does a non-established business need to appoint a

There is no legal requirement to appoint a fiscal representative
in Mauritius.

Under normal circumstance, VAT returns need to be submitted
on a quarterly basis. A quarterly VAT return normally covers
a period of 3 months and end on the last day of the calendar
month; 31 March, 30 June, 30 September and 31 December. A
VAT return along with its payment will have to be submitted
within 20 days from the end of the quarter to which it relates.
In case, a taxable person chooses to file its return electronically,
as a manner approved by the tax authority, it will have 30 days
from the end of the quarter to submit its return and pay the tax
liability.
Where the turnover of taxable exceeds ten million MUR,

the taxable person should file their return electronically and on
a monthly basis. The deadline to file the return and payment of
the tax liability will be 30 days from end of the month that it
has been required to submit the return.

Penalty for non-submission of return by due date
A penalty of 2,000 MUR for every month or part of the month

until the return for that taxable period is submitted, provided
that the total penalty payable shall not exceed 20,000 MUR.
Penalty and interest for late payment of tax
Interest of 1% per month or part of the month during the

period that the tax remains unpaid and a penalty at 5% on the
amount of the tax.

No.

Yes. A range of penalties can be imposed where businesses do
not comply with the VAT rules.
1. Any taxable person who does not apply for compulsory
registration shall be liable to pay to the tax authority, a
penalty of 5,000 MUR for every month or part of the
month from the taxable period in respect of which he is
liable to be registered to the month immediately preceding
the month in which the application for registration is
submitted, provided that the total penalty payable shall not
exceed 50,000 MUR.
2. Any registered person who is required to submit his return
and make any payment of tax due electronically but fails to
join the electronic system, after written notice being given
to him by the tax authority, shall be liable to pay a penalty
of 5,000 MUR, for every month or part of the month from
the taxable period specified in the notice, up to the taxable
period immediately preceding the taxable period in respect
of which he submits his return, and to make any payment
of tax due electronically, provided that the total penalty
payable shall not exceed 50,000 MUR. The person will have
a period of seven days from the written notice to justify his
failure to join the electronic system.
Mauritius

claimed if they are not registered in Mauritius?
No.
What information must a VAT invoice show?

A VAT invoice must show:
the words VAT INVOICE in a prominent place
name, business address, VAT registration number and
business registration number of the supplier
serial number and date of issue of the invoice
the quantity and description of the goods or the description
of the services
the value of the supply, indicating whether the value is
subject to VAT or not
where the value of the supply is subject to VAT: the value
of the supply and the amount of VAT chargeable and the
rate applied
name, business address, business registration number and
the VAT registration number of the purchaser if it is a
registered person.
For further information on indirect tax in Mauritius please contact:
Sattar Hajee Abdoula
T +230 4673001
E sattar.abdoula@mu.gt.com
Mariam Rajabally
T +230 467 3001
E mariam.rajabally@mu.gt.com
Morocco
A standard rate of 20% for most goods and services.

A reduced rate of 14%, with the right to credit input VAT, applies to specific items such as butter (with
the exclusion of the homemade fabric), electrical energy, etc.

The 14% rate applies, without the right to credit input VAT, to services rendered by brokers,
commission agents and agents of insurance companies.
A reduced rate of 10% applies to specific items such as banking and credit services, leasing and
transactions relating to securities traded on the stock exchange.
A reduced rate of 7% applies to specific items such as the sale and the delivery of water, electricity,
pharmaceutical products, school supplies, refined sugar, etc.
A zero rate applies to goods supplied and services rendered for export by the taxpayer.

to these rates?
These are the rates applicable for now. However, each year, the government publishes a financial law
which log sometimes some changes to the VAT rates.
The Value Added Tax (VAT) is the principal indirect tax in the Morocco.
It is a tax on consumer expenditure and is collected on business transactions and imports.
Not applicable.

There is no registration limit for businesses that are not established in Morocco.

Individuals and legal entities with no permanent establishment in Morocco, but which engage in
taxable transactions there, are subject to VAT in the same manner as residents.
Does a non-established person need to appoint

a fiscal representative in order to register?
All non-residents must register, with the Minister of Finance, an accredited representative domiciled in
Morocco who will be responsible for the taxpayers compliance with the VAT regulations.

Finance Law 2014 introduced an optional reverse charge mechanism. Under this regime, in case no
accredited VAT representative was appointed, the Moroccan resident client becomes the legal taxpayer.
Businesses with an annual turnover above MAD 1 million are required to submit VAT returns on a monthly
basis. Otherwise, the returns can be submitted covering three mount accounting periods.
Are penalties imposed for the late submission

of returns/payment of tax?
Yes. If a VAT return, or the corresponding payment, is submitted late a penalty can be imposed.
Yes. Additional declarations have to be submitted in some cases (ie statement of proportional deduction, etc.)
Morocco

VAT only applies to transactions which are deemed to have been carried on in Morocco where:
in the case of a sale of goods, delivery is accomplished in Morocco
in the case of all other activities, the services provided, the item leased or the rights transferred are
used in Morocco.
Deduction of VAT
Input tax may not be recovered on purchases of goods and services that are not used for business
purposes and that are considered to be non-deductible expenses for corporate tax purposes (for example,
goods acquired for private use by an entrepreneur).

Finance Law 2016 specified that input VAT on expenses paid in cash is deductible up to MAD 10,000
per day and per supplier, within a monthly limit of MAD 100,000 per supplier.

Morocco. VAT is levied on transactions carried out in Morocco
by persons who, either habitually or occasionally, purchase
goods for resale or engage in an activity of an industrial,
commercial, artisan or professional nature, as well as in
importation transactions.
VAT is a non-cumulative tax levied at each stage of the
production and distribution cycle. Thus, suppliers of goods and
services must add VAT to their net prices. Where the purchaser
is also liable for VAT, input VAT may be offset against output
VAT. Although VAT is ultimately borne by the consumer by
being included in the price paid, the responsibility for charging,
collecting and paying it to the tax authority at each stage of the
process rests with the business making the supply.
For the moment, four VAT rates are applied in Morocco
(one standard and three reduced rate). The Moroccan
governments goal is to set only two rates: a standard rate (20
%) and a reduced rate (10%). A zero rate applies to goods
supplied and services rendered for export by the taxpayer.

There is no registration limit for the tax. Are subject to VAT:
the legal entities who habitually or occasionally, whether
as part of their main business or as an ancillary activity,
manufacture, extract or process goods or change their
form or handle them (packaging, putting into containers,
shipment, storage or display), irrespective of whether these
operations involve the use of other materials or the goods
are sold under the producers name or trademark
the persons who take part in any stage of the abovementioned activities, either by providing a manufacturer
with all or part of the materials or raw materials necessary
for the production of goods or with patents, designs, plans,
processes, formulas or trademarks to which they have the
rights.

Individuals and legal entities with no permanent establishment
in Morocco, but which engage in taxable transactions there,
are subject to VAT in the same manner as residents. VAT rules
require the submission of monthly declarations of turnover.

your country?
There is no specific legislation to tax non-resident supplies of
electronically supplied/digital services.
According to the principle of territoriality, the private
consumers resident in Morocco should be liable to VAT.
Does a non-established business need to appoint

All non-residents must register, with the Minister of Finance,
an accredited representative domiciled in Morocco who will
be responsible for the taxpayers compliance with the VAT
regulations. In the event of non-payment,
VAT and penalties will become due by the Moroccan
representative of the non-resident taxpayer.
Finance Law 2014 introduced an optional reverse charge
mechanism. Under this regime, in case no accredited VAT
representative was appointed, the Moroccan resident client
becomes the legal taxpayer.
Morocco

The filing of VAT returns may be on a monthly or quarterly
cycle based on certain criteria.
Businesses with an annual turnover above MAD 1 million
are required to submit VAT returns on a monthly basis.
Otherwise, the returns can be submitted covering three mount
accounting periods.
Taxpayers under the internet filing and payment system
must file VAT returns and make VAT payments within one
month after the end of the relevant month or quarter. Other
taxpayers must file their VAT returns and pay VAT due before
the 20th day of the month following the relevant month or
quarter.
As of 1 January 2016, internet filing and payment system
is mandatory for taxpayers generating turnover of more
than MAD 10 million, taxes excluded. The Finance Law
2016 provides that the e-filing and the e-payment will be
implemented for all taxpayers irrespective of the level of their
revenues as from 2017.

A default surcharge penalty may be imposed by the tax
authority if VAT returns are not submitted on time, or the
related tax is not paid by the due date.

claimed if they are not registered in Morocco?
VAT only applies to transactions which are deemed to have
been carried on in Morocco where:
in the case of a sale of goods, delivery is accomplished in
Morocco
in the case of all other activities, the services provided, the
item leased or the rights transferred are used in Morocco.

A VAT invoice must show for example:
an invoice date and number which is unique and sequential
the sellers name, address and VAT registration number
the customers name and address
the quantity of goods or the extent of the services
the total amount of VAT charged and the references and
mode of payment relating to the invoice
Where a VAT invoice includes zero-rated or exempt goods or
services, it must show clearly that there is no VAT payable on
those goods or services.
For further information on indirect tax in Morocco please contact:
Sana Al Mokri
T +212 (0) 5 22 54 48 00
E sana.almokri@ma.gt.com

Besides the VAT return, taxpayers must file to the tax
administration a detailed statement of deductions with the
reference of bills, the exact description of the goods services or
works, their value the amount of tax on the invoice or memory
and the mode of payment and references.
Furthermore, taxpayers performing taxable transactions
and transactions outside the scope of the VAT or exempt
transaction are required to deposit in local tax which they
depend a statement of pro rata.

Civil penalties and interest can be applied for errors and
omissions made on tax returns, or where the tax is paid late.
Penalties can also be applied where the business has failed to
maintain adequate records or provide information (including
additional declarations). Criminal proceedings may be brought
in the case of more serious matters.
Morocco
Mozambique
The standard rate is 17% for most goods and services in the national territory and also on the import
of goods. However, it is important to note:

for goods or services subject to a fixed price regime (including fuel), there are effective rates
which are differentiated by applying the general tax rate to fractions of the respective price

the zero rate regime applies to a limited number of exemptions with exportation activities

a percentage of 5% applies on sales undertaken by taxpayers in the simplified scheme. These
taxpayers do not have the right to deduct input VAT.
The following domestic transactions are an indicative example of those exempt from VAT:

the supply of certain goods and provision of services expressly indicated in the VAT Code:

the supply of goods and services in the area of Health

the supply of goods and services related to social assistance and activities undertaken by
public or non-profit bodies, whose objectives are of a social, cultural or artistic nature

the supply of goods and services for the collective interest of members of non-profit bodies.
The purposes and objectives of these bodies will be of a social, political, associative (labour
and trade), religious, philanthropic, recreational, sporting, cultural or civic nature. The
members pay a fixed fee established by the statutes

the supply of goods and services in the area of Education

the supply of goods and services in the agricultural, forestry, livestock and fishing industries,
as expressly indicated.

banking and financial transactions

leasing of immovable property for dwelling purposes or in rural areas, leasing of property, and
for trade, manufacturing and office premises

insurance and reinsurance transactions as well as related services performed by insurance
brokers and other insurance agents

transactions subject to Sisa even if exempted from the same

supplies pertaining exclusively to an exempt activity or supplies which did not give rise to a right
of deduction. In addition supplies of goods, where on their acquisition the tax did not become
deductible.
In relation to the activities of importation, exportation, and international transportation, the following,
amongst others, are zero-rated:

the final importation of goods of that would qualify for an objective exemption, or would benefit
from the exemption of custom duties

the importation of goods in transit and the temporary importation or drawback of goods that are
exempt from custom import duties

transmission of goods sent or transported with a foreign destination by the seller or by a third
party on his behalf, and other similar operations
Mozambique
provision of services that are directly related with the transit, exportation or importation of goods
exempted from tax because they were declared to be under the temporary regime, drawback or
in transit.
Exempted when the turnover is less than 750,000 Meticais (approximately $17,000)
Special rate (simplify regime) of 3% for most goods and services when turnover is between 750,000
to 2,500,000 Meticais annually

these rates?
No.
Value Added Tax (VAT) is the principal indirect tax in Mozambique. It is a tax on consumer expenditure, and
is collected on business transactions and imports.
No.

No.

No.
Monthly.

No.

No.

Mozambique.
It is a tax on consumption which is applied during the
production and distribution process to most goods and services.
It is also applied to goods, and certain services, entering the
country. Although VAT is ultimately borne by the consumer
by being included in the price paid, the responsibility for
charging, collecting and paying it to the tax authority at each
stage of the process rests with the business making the supply,
ie the sale.
A business registered for the tax will charge VAT (output
tax) on its sales, and incur VAT (input tax) on its purchases
(including any VAT paid at importation). The difference
between the output tax and the deductible input tax in each
accounting period will be the amount of VAT payable by the
business to the tax authority. Where the input tax exceeds the
output tax, a refund can be claimed.
A transaction is within the scope of Mozambique VAT if
the following conditions are met:
it is a supply of goods or services. Although the term
supply is not defined in the legislation, it has a broad
interpretation
it takes place in Mozambique

it is made by a taxable person. For these purposes, a taxable
person is a person or entity who is registered for VAT in
Mozambique, or has a liability to become registered
it is made in the course or furtherance of any business
There are three rates of VAT that are applied to goods and
services in Mozambique; the standard rate, the special regime
rate and the zero rate. In addition, some goods and services are
exempt from the tax.
Businesses that make exempt supplies are unable to claim
all of the input tax that they incur, so the VAT paid to suppliers
will be a real cost.
Most goods imported into Mozambique are subject to
VAT. The tax will have to be paid by the importer at the time
of importation. Where the importation is for business purposes
and the importer is registered for VAT, it may be possible to
reclaim the tax (subject to certain rules).
and Customs duty. Customs duty is levied in Mozambique
at the place where goods are imported into the community. It
is levied in order to bring the cost of goods produced outside
Mozambique
Mozambique up to the same level as those produced within

it. Once duty (and VAT) has been paid by the importer, the
goods are in free circulation and they can then be released for
use in the home market. Unlike other indirect taxes, such as
VAT, once duty has been paid it is not usually recoverable by
the importer. It therefore represents a bottom line cost to the
importing business if it cannot be passed on in higher prices.
It is therefore very important to ensure that the correct rate of
duty is applied. VAT is charged on the value of the importation,

A person who either makes or intends to make taxable
supplies of goods or services in the course or furtherance of a
business must register for VAT irrespective of the limit.
For these purposes, a person includes any legal entity.
Therefore, once a person is registered for VAT, all of his
business activities will be covered by the registration even if
the nature of some of those activities is very different.
A penalty may be imposed by the tax authority if a business
fails to register at the correct time.

Not applicable.

None.

No this is not necessary.

VAT returns normally cover an accounting period of one
month, ending on the last day of a calendar month, except for
special regime where the return is done every quarter ending
on the last day of the quarter month. This applies to an annual
turnover of between 750,000 to 2,500,000 Meticais.
All VAT returns have to be submitted within 30 days of
the end of the relevant accounting period, together with any
tax due. As all returns and payments have to be submitted
manually.


None.

Criminal proceedings may be brought in the case of more
serious matters.

claimed if they are not registered in Mozambique?
No.

an invoice number which is unique and sequential
the sellers name and address
the sellers VAT registration number
the invoice date
the time of supply (also known as tax point) if this is
different from the invoice date
a description sufficient to identify the goods or services
supplied to the customer
the total amount of VAT charged expressed in Meticais.
For each different type of item listed on the invoice, the
following must be shown:
the unit price or rate, excluding VAT
the rate of VAT that applies to whats being sold
the total amount payable, excluding VAT.
services, it must:
show clearly that there is no VAT payable on those goods
or services
show the total of those values separately.
For further information on indirect tax in Mozambique please contact:
Dev Pydannah
T +258 823214180
E dev.pydannah@mz.gt.com
Mozambique
South Africa
What are the current rate(s) of VAT?
Standard rate of 14% for all goods and services, unless the transaction is specifically zero-rated or exempt.
Zero-rated goods and services which includes but not limited to certain basic foodstuffs, fuel levy
goods, farming goods, exports, certain services to non-residents, services physically performed
outside South Africa, etc.
Exempt goods and services, which includes, but not limited to financial services, donated goods or
services sold by non-profit bodies, residential accommodation in a dwelling, passenger transport in
South Africa by road or rail, educational services provided by recognised educational institutions and
childcare services provided at crches and after-school care centres.

to these rates?
Yes. There has been a huge debate in the country that came about as a result of the Davis Tax
Committees suggestion to increase the standard rate in order to make up the fiscal deficit. This was only
a recommendation by the committee and it is not clear if the Government will decide to increase the rate.
Value Added Tax (VAT) is the principal indirect tax in the South Africa. It is a tax on consumer expenditure
and is collected on business transactions and imports.
Yes. Businesses are obliged to register for VAT when the total value of the taxable supply of goods and
services exceeds, or will in terms of a contractual obligation in writing exceed, R1 million within any
12 month period. Suppliers of e-commerce services are liable to register if the total value of its taxable
supplies exceed R50,000. Voluntary registration is generally allowed where the total value of taxable
supplies will exceed R50,000, but is less than R1 million for any 12 month period.

Yes, currently the same registration limit applies to all businesses.

Yes. Non-resident (established) person is required to appoint a fiscal (VAT) representative who is a natural
person and resident of South Africa. It is also a requirement to have a bank account with one of the major
registered banks in South Africa.
Two-monthly tax period standard tax period generally allocated for VAT registration where turnover
is less than R30 million in any 12-month consecutive period.
Monthly tax period Where turnover exceeds or is likely to exceed R30 million in any 12-month
consecutive period.
Four-monthly tax period For small business with turnover less than R1.5 million in any 12-month
consecutive period.
Six-monthly tax period For farming businesses with turnover that is less than R1.5 million in any
12-month consecutive period.
Twelve-monthly tax period For inter-group letting or administration companies or trust funds.
South Africa

Yes. If a VAT payment, is submitted late a 10% administrative penalty is imposed in addition to interest
calculated at the prescribed interest rate applicable at the time.
No.
Yes. Penalties can be imposed for a range of errors, omissions or incorrect declarations. Understatement
penalties can be as high as 200%.

Generally no. VAT can only be claimed back to the extent that goods are exported from South Africa, the
VAT incurred can, based on certain requirements, be claimed back from the VAT Refund Administrator at
the designated border posts.

South Africa.
The generally accepted essential characteristics of a VATtype tax are as follows:
the tax applies generally to transactions related to goods
and services
it is proportional to the price charged for the goods
and services
it is charged at each stage of the production and distribution
process where there is a supply between parties
the taxable person (vendor) may deduct the tax paid
during the preceding stages as input credit against output
VAT collected from customers. The burden of the tax is
ultimately on the final consumer.
VAT is only charged on taxable supplies made by a vendor.
Taxable supplies include supplies for which VAT is charged at
either the standard rate or zero rate, but does not include:
salaries and wages
hobbies or any private recreational pursuits (not conducted
in the form of a business)
occasional private sale of personal or domestic items
exempt supplies.
The mechanics of the VAT system are based on a subtractive or
credit input method, which allows the vendor to deduct the tax
incurred on enterprise inputs (input tax) from the tax collected
on the supplies made by the enterprise (output tax). There are,
however, some expenses upon which input tax is specifically
denied, such as the acquisition of motor cars and entertainment
related expenses.
The vendor reports to the South African Revenue Service
(SARS) at the end of every tax period on a VAT 201 return,
where the input tax incurred for the tax period is offset against
the output tax collected for the tax period and the balance
is paid to the SARS, normally by no later than the 25th day
after the end of the tax period concerned. However, vendor
registered on SARS efiling system may submit and pay

their VAT liability up to the last business day of the month
(excluding public holidays, Saturdays and Sundays).A person
who is registered, or who is obliged to register is referred to as
a vendor.
A person must have an enterprise to be liable to register as a
VAT vendor in South Africa.
An enterprise is inter alia defined as:
any enterprise or activity
which is carried on continuously or regularly
by any person
in, or partly in, South Africa
in the course or furtherance of which goods or services
are supplied
to any other person for a consideration (payment for
the supply)
whether or not for profit.
VAT at the standard rate of 14% is only charged on taxable
supplies made by a vendor, unless it is zero rated, (i.e. 0% VAT
is levied), or it is exempt. Taxable supplies include supplies
where VAT is charged at either the standard rate or zero rate.
Vendors can claim VAT only to the extent that taxable supplies
are made and where all the requirements of a tax invoice are
complied with.
Businesses that only make exempt supplies are unable to
register for VAT and cannot claim the VAT that they incur. It
follows that the VAT paid to suppliers will be a real cost.
Most goods imported into the South Africa are subject to
VAT. The VAT has to be paid by the importer at the time of
importation of the goods into South Africa when the goods are
cleared for home consumption. Where the importation is for
business purposes and the importer is registered for VAT and
for customs purposes, it may be possible to reclaim the VAT on
importation subject to the general input tax rules.
South Africa

and customs duty. Customs duty is levied where goods are
imported into South Africa or the Southern African Customs
Union (SACU). It is levied in order to bring the cost of goods
produced outside South Africa or SACU up to the same level
as those produced within it. Once duty (and VAT) has been
paid by the importer, the goods are in free circulation and they
can then be released for use in the home market. Unlike other
indirect taxes, such as VAT, once duty has been paid it is not
usually recoverable by the importer. It therefore represents a
cost to business. It is therefore very important to ensure that
the correct rate of duty is applied. VAT is charged on the value
of the goods on importation, including any custom duty and
where the goods originate outside SACU an upliftment of 10%
is added to the customs value.

Every person who carries on an enterprise is liable to register
for VAT when the total value of taxable supplies of goods and
services exceeds, or will in terms of a contractual obligation in
writing exceed, R1 million within any 12 month period. Suppliers
of e-commerce services are liable to register if the total value of its
taxable supplies exceed R50,000. Voluntary registration is generally
allowed where the total value of taxable supplies will exceed
R50,000, but is less than R1 million for any 12 month period.
For these purposes, a person includes any public authority,
any company, a body of persons (corporate or unincorporated),
the estate of any deceased or insolvent person, any trust fund
and any foreign donor funded project. Therefore, once a
person is registered for VAT, all of his business activities will be
covered by the registration.
Separate registration for separate enterprises, branches
and divisions is allowed where separate independent systems
of accounting are maintained, and the enterprises/ branches/
divisions are separately identifiable. This means that it is possible
for a vendor to have more than one VAT registration number if
the enterprise is carried on in separate branches or divisions.

The normal VAT registration limit also applies to businesses
that are not established in South Africa, but conduct business in
South Africa.
From 1 June 2014, non-established businesses that supply
e-commerce services to South African customers should
register compulsory for VAT if their turnover from such
supplies exceeds R50,000 during any 12-month period.

A non-established business is required to appoint a VAT
representative, who is a natural person and resident of South
Africa, to act on his behalf for VAT purposes and to assume
the duties and obligations prescribed by VAT legislation.
Furthermore, a non-established business must open a South
African bank account.

Bi-monthly tax period this is the default tax period
generally allocated for VAT registration where turnover is
less that R30 million in any consecutive 12-month period.
Monthly tax period where turnover exceeds or is likely to
exceed R30 million in any consecutive 12-month period.
Four-monthly tax period for small business with
turnover that is less than R1.5 million in any consecutive
12-month period.
Six-monthly tax period for farming businesses with
turnover that is less than R1.5 million in any 12-month
consecutive period.
Twelve-monthly tax period for inter-group letting or
administration companies or trust funds.

Late payments of VAT attract an administrative penalty of 10%
of the outstanding tax. An understatement penalty ranging
from 5-200% depending on the behavioural levels may also
be imposed. Interest is also charged at the prescribed rate
(currently 9.5% per annum) on any late payments.

Where goods are imported, but not entered through Customs
Controlled Areas (CCAs), for example electronic goods, end
users are required to pay VAT on a reverse-charge mechanism
and to complete and submit a special return. Vendors that will
be entitled to claim input VAT on goods or services imported
for application in course of carrying on their enterprise are
exempt from the reverse-charge declarations.
Yes. Over and above the administrative 10 % penalties,

understatement penalties of between 5%-200% can be imposed
where businesses do not comply with the VAT rules.
Administrative penalties
An administrative 10% late payment penalty is levied where

vendor pay their VAT liability after the due date.
South Africa
Understatement penalties
Consideration less than R5,000 (abridged tax invoice)
SARS may also impose these penalties, having regard to nature

and seriousness of the non-compliance and/or the period of
non-compliance and/or any repeat of the non-compliance.
The understatement penalty is normally imposed (but not
limited to) when SARS makes adjustments to vendors VAT
declarations as a result of an audit or investigation.
The understatement penalty percentage table is as follows:
Behaviour Standard
If obstructive, Voluntary Voluntary

case
or if it is a
disclosure disclosure

repeat case after
before
notification
notification

of audit
of audit
Substantial
understatement
Reasonable care
not taken in
completing return
No reasonable
grounds for tax
position taken
Gross negligence
Intentional tax
evasion
10%
20%
5%
0%
25%
50%
15%
0%
50%
75%
25%
0%
100%
150%
125%
200%
50%
75%
5%
10%

serious matters.
Can the VAT incurred by overseas businesses

be claimed if they are not registered in
South Africa?
The default position is that foreigners cannot claim VAT
that they incur on goods and services that are purchased in
South Africa.
An exception exists where goods are purchased in
South Africa and subsequently removed from South Africa
by the foreigner. The VAT incurred can, based on certain
requirements, be claimed back from the VAT Refund
Administrator at the designated border posts.
What information must a tax invoice show?

A tax invoice must contain the following information:
Consideration of R5,000 or more (full tax invoice)
The words Tax invoice in a prominent place

Name, address and VAT registration number of the supplier
Name, address and VAT registration number of the
recipient
Serial number and date of issue
Full description of the goods and /or services
Price and VAT (according to any of the three
approved methods).
The words Tax invoice in a prominent place

Name, address and VAT registration number of the supplier
Serial number and date of issue
A description of the goods and /or services
Quantity or volume of goods or services supplied
Price and VAT (according to any of the three
approved methods):
Method 1 All individual amounts reflected
Price (excl. VAT) R500
VAT charged R 70
Total including VAT R570
Method 2 Total consideration only and the VAT
rate charged
The total consideration R570
VAT included @ 14%
Method 3 Total consideration and the VAT charged
The total consideration R570
VAT included R 70
Where a tax invoice includes zero-rated or exempt goods or
services, it must:
or services
Tax invoices relating to standard rated transactions must be
issued in South African currency (ZAR). With regards to zero
rated transaction, tax invoices may be issued in
foreign currency.
The document retention period is five years. The
information should be retained as prescribed by SARS.
Authorisation must be obtained from SARS where a vendor
wants to retain the documentation in electronic or any other
format and elsewhere than in South Africa.
For further information on indirect tax in South Africa please contact:
Cliff Watson (Johannesburg)
T +27 11 322 4649
E cliff.watson@za.gt.com
Anton Kriel (Cape Town)
T +27 21 417 8747
E anton.kriel@za.gt.com
Tunisia
Reduced rates are applicable for some activities:

6% applicable for example to activities carried out by doctors, analytical laboratories, articles for
pharmaceutical products etc.
12% applicable for example to the transport of goods excluding agricultural and fish products,
services rendered to hotels, services rendered by lawyers, tax counsels and other experts etc.
Supplies of certain goods and services are exempt from VAT (school education, aircraft transport
services, maritime transport) also all exportations of goods and services.
these rates?
No.
Value Added Tax (VAT) is the principal indirect tax in Tunisia. It is a tax on consumer expenditure, and is
collected on business transactions and imports.
Yes. Before the beginning of the business in Tunisia, the register for the TVA is required.

Yes.

Yes, if not done automatically his partner or client in Tunisia will be considered as its representative.
Returns are submitted on a monthly basis.

No.
Tunisia

Yes, in certain circumstances and subject to certain conditions.
Deduction of VAT
The general rule is that VAT on supplies is deductible except for some categories (for example: tourism
cars purchased, electricity, gasoline for automobiles).

the Tunisia
In Tunisia, a value added tax (VAT) applies to all industrial
production activities, crafts, and services; however, operations
concerning certain products and services are exempt from
VAT including areas of agribusiness, international air and sea
transportation, etc.
The following, among others, are necessarily subject to
VAT:
imports
industrial production, including crafts, but excluding
agricultural and fishery products
services
wholesale, excluding food products.
It is important to note that exportations outside Tunisia are
exempt from VAT.
services in the Tunisia; the standard rate (18%), the reduced
rates (12% and 6%), and the zero rate. In addition, some goods
and services are exempt from the tax.

A person or company before beginning a business in Tunisia must
register for VAT.
Therefore, once a person is registered for VAT, all of his business
activities will be covered by the registration.

No but non-established businesses that carry out taxable
transactions in Tunisia should designated a temporary
representative which will proceed with VAT reversal instead
of them. In general these non-established businesses are
represented by client companies or operators who have
transactions with them.
In general a system of withholding tax for VAT is applicable
for all taxable transactions in Tunisia done by non-established
businesses. The VAT is withheld by the Tunisian client or
operator and reversed for tax treasury under the name of the
non-established businesses.

your country?
No.

Yes if not done automatically his partner or client in Tunisia
will be considered as its representative.

VAT is paid on the basis of a monthly frequency when we
submit the monthly tax declaration, so at the latest the 28th of
the next month.

related tax is not paid by the due date. The rate of a penalty is
1% of the VAT to be paid for each month or part of month.
Tunisia

No.

No.

claimed if they are not registered in Tunisia?
No.

the invoice date
the rate of any cash discount
the total amount of VAT charged expressed in sterling.
For further information on indirect tax in Tunisia please contact:
El Moez Ben Amor
T +216 (20) 332 053
E elmoez.benamor@tn.gt.com
Tunisia
Zambia

Zero-rated goods and services include most food and health.

to these rates?
No.
Value Added Tax (VAT) is the principal indirect tax in Zambia. It is a tax on consumer expenditure collected
on business transactions and imports.
Yes. It relates to the annual turnover of taxable transactions in Zambia, and once the limit has (or will be)
reached it is necessary to register.

A supplier may also register voluntarily upon satisfying certain condition even if turnover is below the
threshold.

Non established businesses will need to register as soon as they become aware that their taxable supplies
will exceed the annual turnover threshold for VAT purposes.

In certain circumstances, a non-established person may be directed by the tax authority to appoint a fiscal
representative.
Most businesses are required to submit VAT returns every month. Returns can also be submitted on a
quarterly basis upon application to the Commissioner General.

Yes. A penalty can be imposed if a VAT return, or the corresponding payment, is submitted late.
No.
Yes. Penalties can be imposed for a range of errors or omissions, whether wilfully made or not.

Not applicable only registered businesses can recover VAT.

However if the overseas business makes a supply to a registered business in Zambia, VAT may be
recoverable if they appoint a local agent for VAT purposes.
Zambia

Zambia.
It is a tax on consumption applied during the production
and distribution process to most goods and services. It is also
applied to goods and certain services entering the country.
Although VAT is ultimately borne by the consumer by being
included in the price paid, the responsibility for charging,
process rests with the business making the supply, ie the sale.
A transaction is within the scope of Zambian VAT if the
it is a taxable supply of goods or services. The term supply
is defined as the sale or disposal of goods, or the rendering
of services
it takes place in Zambia
it is made by a taxable person. For these purposes, a
taxable person is a person or entity who is registered for
VAT in Zambia, or has a liability to become registered

supplies of goods or services in the course or furtherance of
a business must register for VAT if the value of its taxable
supplies in Zambia exceeds the annual registration limit, or is
expected to exceed the limit in the near future.
A business can register on a voluntary basis even if the
the nature of some of those activities are very different.
Two or more corporate bodies can be registered together as
a VAT group if:
they are under common control and they satisfy certain
conditions
the Commissioner General has consented.
services in Zambia; the standard rate, and the zero rate. In
addition, some goods and services are exempt from tax.
Businesses that make wholly exempt supplies are not
entitled to register for VAT, whereas a business making both
exempt and taxable supplies may reclaim input tax on a partial
basis, only to the extent that the input tax relates to taxable
supplies.
Most goods imported into Zambia from outside are subject
to VAT, whether or not the importer is registered for VAT.
The tax will have to be paid by the importer at the time of
importation. Where the importation is for business purposes
and Customs duty. Customs duty is levied where goods are
imported into the country. VAT is charged on the value of the
importation, including any custom duty.
The Commissioner General may, for the protection of revenue,

exclude any member form the group at any time.
The main advantage of VAT group registration is that, apart
from a few limited exceptions, any supply of goods or services
by a member of the group to another member of the group is
disregarded for VAT purposes. This reduces the risk of VAT
being accidentally omitted on supplies between separately
registered connected companies.

The normal VAT registration limit does not apply to businesses
who are not established in Zambia.

your country?
Not specified in current legislation.
Zambia

Not required to register under current legislation.

month, ending on the last day of a calendar month. Businesses
can request a specific accounting cycle to coincide with its
financial or management reporting (quarterly or six monthly).
All VAT returns have to be submitted within 21 days
of the end of the relevant accounting period, together with
any tax due. All returns and payments have to be submitted
electronically, except for returns with less than ten transactions
which may be submitted manually by the 5th day of the end of
the relevant accounting period.
Non-standard periods may apply, subject to permission or
direction by the Commissioner General:
if the tax payers turnover does not exceed the threshold
(three monthly period may apply)
in other qualifying instances, one six monthly period and
either six additional monthly returns or two additional three
monthly tax periods.

authority if VAT returns are not submitted on time, or
the related tax is not paid by the due date. Penalties are
automatically computed.
For the late submission of a return and late payment of
liability, the penalty fee is charged for each day the return is
late. Interest is chargeable for each month or part of a month
that a payment is overdue at the prescribed interest rate.

No other declarations are required.

Yes, penalties and interest can be applied for errors and
maintain adequate records, provide information (including
additional declarations), or makes repeated mistakes.
Criminal proceedings may be brought in the case of false
returns, documents and fraudulent evasion (up to three years
imprisonment).

claimed if they are not registered in Zambia?
Not applicable. VAT may not be claimable if a business is not
registered in Zambia.

the words tax invoice in a prominent place
the suppliers name and address and Taxpayer Identification
Number (TPIN)
the name or business name and address of the recipient
(purchaser)
date of issue of invoice
a description of the goods or services supplied
the selling price, excluding VAT and any discount
the quantity or volume of the goods or services supplied to
the customer
the total amount of VAT charged
the selling price including VAT
the total charge on the invoice inclusive of VAT, any
discount and the rate of VAT
services, it must:
or services
VAT invoices can be issued, received and stored in electronic
format or manually.
It is mandatory that manual invoices issued be taken form a
serially numbered pre-printed invoice book.
Zambia
Computer generated tax invoices
Suppliers with computerised accounting systems may apply

to the Commissioner General for approval to issue computer
generated tax invoices. Eligible accounting packages must have
the following features:
printed invoices bearing all the mandatory features of a tax
invoice
automatic and consecutive document numbering with
inbuilt safeguards against reallocation and resetting of
numbers
transactions once posted and a tax invoice printed become
read only
periodic transaction reports showing invoice details.
Tax invoices must be retained for a minimum period of six
years.
For further information on indirect tax in Zambia please contact:
Rodia Musonda
T +260 211 227722 -8
E rodia.musonda@zm.gt.com
Zimbabwe

Zero-rated goods and services including most basic food stuffs.

to these rates?
Not at this time.
Value Added Tax (VAT) is the principal indirect tax in Zimbabwe. It is a tax on consumer expenditure, and is
collected on goods and services consumed in Zimbabwe. It is also charged on imports into Zimbabwe.
Yes. It relates to the annual turnover of taxable transactions, and once the limit has (or will be) reached it
is necessary to register. The current registration threshold is US$60,000.

Yes. All businesses operating in Zimbabwe are required to reach that threshold to qualify for
tax registration.

Whether the business is an established business or not, a representative or a public officer is required
when a company applies for VAT registration.
Most businesses are required to submit VAT returns covering two month accounting periods. Returns can
also be submitted on a monthly basis for large corporates.

Yes. If a VAT return, or the corresponding payment, is submitted late a penalty can be imposed. Presently
the penalty for late submission of a return is $30 per day delayed.
Yes. Additional declarations have to be submitted in respect of all expenses on which a VAT input claim is
being made.

No, only VAT that has been incurred in Zimbabwe is claimable in Zimbabwe.
Zimbabwe

Value Added Tax (VAT) is the main type of indirect taxation
in Zimbabwe.
ie the sale.
A transaction is within the scope of Zimbabwean VAT if
the following conditions are met:
it is a supply of goods or services. The term supply is
defined in the legislation, and includes all forms of supply
irrespective of where the supply is effected, (even including
things that happen by law, eg expropriation) and any
derivative of supply is construed accordingly
it takes place in Zimbabwe
it is made by a registered operator. For these purposes, a
registered operator is a person or an entity that is registered
for VAT in Zimbabwe, or has a liability to become
registered under the VAT act
services in Zimbabwe; the standard rate and the zero rate. In
addition, some goods and services are exempted from VAT.
VAT on imports
Most goods imported into Zimbabwe are subject to VAT at

the standard rate. The tax is paid by the importer at the time of
and the importer is registered for VAT, it is possible to reclaim
the input tax using the bill of entry as the supporting document.
Time of supply
The time of supply for goods imported into Zimbabwe shall be

the date on which the goods are deemed to have been imported
in terms of the customs and excise legislation. Where the goods
are entered for home consumption in terms of the customs
and excise act, they are deemed to have been imported on the
date on which they are so entered In the case of goods that are
imported and are entered into a bonded warehouse; no VAT is
chargeable until they are released for home consumption.
Value of supply of imported goods
The value of supply for goods imported into Zimbabwe is

the value for duty purposes. The value for duty purposes will
include insurance charges and transport charges.
VAT on imported services
VAT is also charged on imported services. An imported

service is a supply of services by a non-resident to a resident of
Zimbabwe to the extent that such services are used for making
non-taxable supplies.
The time of supply for imported services is the earlier of an
invoice being issued or any payment being made for the supply
of the service. The responsibility to pay VAT on imported
services lies with the recipient of the imported. This must be
declared and paid for within 30 days from the time
of importation.
Deemed sales
The act provides for both actual and deemed supplies of

goods or services. The deeming provisions widen the range
of transactions subject to VAT and clarify the fact that
certain transactions are indeed taxable. Some of the deemed
transactions that are deemed to be taxable supplies include
sales in execution of a debt deregistration, door-to-door credit
sales, subsidies by the local or public authority, sale of a going
concern, receipt of an insurance indemnity and repossession
of goods.
Zimbabwe
A person who makes or intends to make taxable supplies of

goods or services in the course or furtherance of a business
must register for VAT if the value of its taxable supplies in
Zimbabwe meets or exceeds the annual registration threshold,
or is expected to exceed the limit in the near future.
However, a business can register on a voluntary basis even
if the registration limit has not been exceeded under certain
conditions. A penalty may be imposed by the tax authority if a
business fails to register at the correct time.
In terms of the VAT act a person includes:
sole proprietor, ie an individual carrying on business in his
own name or under a trade name
a company
a partnership or joint venture
a deceased estate or insolvent estate
trusts
incorporated body of persons, eg an entity established
under its own enabling act of parliament
unincorporated body of persons, eg club, society or
association with its own constitution
local and public authorities.
The general rule is that all registered operators will account for
VAT on the invoice basis, unless the commissioner, on written
application by the registered operator, has directed otherwise.
Returns together with the payments are submitted on the 25th
of the following month after the end of the tax period.
A tax period is two calendar months for most registered
operators, while for large registered operators it is a monthly
tax period.
This implies that a registered operator is required to account
for VAT at the earlier of:
the time an invoice is issued
the time any payment is received by the supplier.
Requirements for voluntary registration
An application for voluntary registration can be disapproved by

the commissioner in the following instances:
if the person has no fixed place of abode or business
if the person does not keep proper accounting records.
if the person has not opened a bank account with any bank
or similar institution for the purpose of his trade.

All businesses making taxable supplies in the course of
furtherance of a business are eligible for VAT registration
on attaining the registration limit. There is no differentiation
between an established business and a non-established business.

Therefore a registered operator accounts for both cash and

credit transactions.
Payments basis
The act also provides for an alternative accounting basis namely

the payment basis. Registered operators in this category
will account for VAT only to the extent they have received
payment from such sales and claim input tax to the extent
of payments made on purchases and expenses. The payment
basis is only limited to public authorities, local authorities and
associations not for gain. These registered operators, who wish
to account for VAT on the payments basis, must apply to the
commissioner in writing.

A default penalty may be imposed by the tax authority if VAT
returns are not submitted on time, or the related tax is not paid
by the due date.
For the first late submission or payment, the tax authority
will issue a notification to the taxpayer confirming that a
penalty may be imposed in the future. If another submission
or payment, a fixed percentage penalty is imposed on that
occasion. The percentage penalty is increased for subsequent
defaults (up to a specified maximum), unless returns and the
related payments are made on time.
The tax authority in Zimbabwe requires that every company

applying for VAT registration appoints a person to represent
the company on VAT and all other tax affairs.
Zimbabwe
Businesses that are registered for VAT in Zimbabwe are

required to submit input tax schedules to accompany each
VAT return submitted. The input tax schedule must show:
the name of supplier
a description of goods/services supplied
amount excluding VAT
amount of VAT charged
invoice number/bill of entry number in the case of a bill
of entry being used
date of supply of the goods or services.

the invoice date
a description of goods or services supplied to the customer
the customers VAT number
amount excluding VAT
the total amount of VAT charged.


serious matters.

claimed if they are not registered in Zimbabwe?
No, VAT can only be claimed if it has been incurred in
Zimbabwe. The tax authority will not refund VAT that has
been incurred in other tax jurisdiction even where the goods are
eventually consumed in Zimbabwe.

services, it must:
or services
Where a business makes retail sales, a simplified VAT invoice
can be issued.
VAT invoices can be issued, received and stored in
electronic format. Electronic invoices must contain the same
information as paper invoices. The method used to ensure the
authenticity of origin, the integrity of content and legibility of
the invoices is a business choice and can be achieved by any
business controls which create a reliable audit trail between an
invoice and a supply of goods or services.
For further information on indirect tax in Zimbabwe please contact:
Christina Muzerengi
T +263 4 442511 4
E christina.muzerengi@zw.gt.com
Zimbabwe

Americas
In USA, President
Barack Obama signed the
Trade Facilitation and Trade
Enforcement Act of 2015 (TFTEA)
in February 2016. TFTEA makes
permanent the moratorium on
Internet access taxes and multiple or
discriminatory taxes on electronic
commerce established by the
Puerto Rico
Internet Tax Freedom Act.
will implement VAT
with effect 1 June 2016,
replacing the current sales
and use tax system.
In Brazil,
the rate of PIS and
COFINS on the import of
goods was increased
in 2015.
Americas
Argentina
Standard rate: 21% Other: 27%, 10.5%, 5%, 2.5%
Brazil
Standard rate: 1%-37%
Other: 0%-365%, 0%-5% (other multiple rates also
apply)
Canada
Standard rate: 5%
Other: 0%
Chile
Standard rate: 19%
Costa Rica
Standard rate: 13%
Mexico
Panama
Standard rate: 7%
Other: 15%, 10%, 0%
Peru
Standard rate: 18%
Puerto Rico
Standard rate: 10.5% Other: 1%, 0%
United States
Sales tax rates vary across the country
Uruguay
In New Brunswick,
Canada, effective 1 July, 2016,
the provincial portion of the HST rate
will increase by two percentage points
from 8% to 10%, raising the joint federalprovincial HST rate from 13% to 15%.
New Brunswick will now have the
same HST rate as Nova Scotia
and a rate that is slightly higher
than Quebecs combined rate
of 14.975 percent.
Argentina

Reduced rate of 10.5% for some goods and services that are specifically detailed.
Increased rate of 27% for energy, telecommunications, water, natural gas, electric power and running
water regulated by measurers and telecommunications.
Reduced rates of 2.5%, 5% or 10.5% for newspapers, magazines, journals and advertising spaces.
Some goods and services are exempted from the tax.
Exports of goods and services are exempted with the possibility to claim the refund of the linked
input credit.

to these rates?
No
Value Added Tax (VAT) is the principal Federal indirect tax in the Argentina. It is a tax on consumer
expenditure and is collected on business transactions and imports.
No. But depending on the annual turnover of taxable transactions in Argentina, there is a simplified
regime in which the small taxpayers pay a monthly fixed quote. Once the limit has (or will be) reached
it is mandatory to register as a taxpayer under the general regime, determining the tax and paying the
difference between output tax invoiced to clients and input tax invoiced by suppliers.

No. There is no registration limit for businesses that are not established in Argentina and they will need to
register as soon as they start to make taxable transactions. However, foreign entities working on short
term assignments in Argentina do not need to comply.

Yes, a non-established person has to appoint a fiscal representative in the tax authority in order
to register.
In general, the VAT must be submitted on a monthly basis. Taxpayers who exclusively develop agricultural
activities may submit their tax return on a monthly basis and pay annually.

Yes. If a VAT return is submitted late a penalty can be imposed, and if the corresponding payment is done
after the due date, the taxpayer must pay the added interest.
Argentina
Yes. Additional declarations have to be submitted in respect of information on the monthly purchases and
services received as well as sales and services provided.
Yes. Penalties can be imposed for a range of errors or omissions and tax fraud.

No

VAT is the main type of indirect taxation in Argentina.
It is also applied to goods and services, entering the country.
process rests with the business making the supply ie the sale.
A registered business will charge VAT (output tax) on its
sales, and incur VAT (input tax) on its purchases (including any
VAT paid at importation). The difference between the output
tax and the deductible input tax and the withholding VAT (if it
is applicable) in each accounting period will be the amount of
VAT payable by the business to the tax authority. Where the
input tax exceeds the output tax, a refund cannot be claimed
and can only be used against future output tax, except the input
credit which is directly linked with exports, for which it is
possible to claim a refund. If the excess of VAT credit comes
from withholding VAT tax, it is possible to claim the refund.
The VAT will be applied to:
sales of movable goods a sale is considered to be any
transfer for consideration, among people of visible or
ideal existence, which amount to transfer ownership of
personal property (sale, barter, payment in kind, award for
dissolution of companies, social contributions and judicial
sales and auctions any other act that would lead to the same
end, except expropriation). It does not include sales or
transfers made as a result of corporate reorganisations
tax free:
contracts for the construction of movable assets
works on property belonging to third parties
construction and sale of property (real estate)
obtaining goods of nature on behalf of a third party
definitive imports of movable assets
renderings of financial services performed abroad, the
use of which is carried out in Argentina, as long as the
renders are taxpayers for other taxable events. Thus
they are levied on by tax, the interest from loans granted
abroad, fees for technical assistance, etc. The renderers
will be responsible of entering the tax.
The standard rate of this tax is 21%, there also exist

special rates:
27% applicable to the sale of natural gas, electric
power and running water regulated by measurersand
telecommunications
10.5% applied to certain taxable activities related to the
construction of property (houses), renderings and sales
related to certain products of animal and plant origin,
health insurance services, long range and mid-range public
transportation, and interests and commissions for loans
granted by financial entities in Argentina or abroad. In
this last case, when the entity complies with international
standards of banking supervision established by the
regulations. This special rate also applies to the acquisition
and importation of certain durable goods to be used in
productive activities
2.5%, 5% or 10.5%, depending on the annual invoicing
applied to newspapers, magazines, journals and advertising
spaces.
In addition, some goods and services are exempt from tax.
will be a real cost, except the exports of goods and services
that are exempted with the right to ask for the refund of the tax
linked with the exports. The exports of services are the services
provided in the country where the effective use is carried abroad.
Most goods imported into Argentina are subject to VAT.
importation. In addition the Customs collect VAT in this
operation. Where the importation is for business purposes and
the importer is registered for VAT, this tax is considered an
input tax credit.
Argentina

supplies of goods or services must register for VAT.
When the person has a small business, they can register in
a simplified regime paying a monthly quote of tax which
includes direct tax, indirect tax and social security tax. This
regime is only for individuals, not for companies. When the
amount of the operations exceeds the annual simplified regime
limit, the person must register with the tax authorities in the
general regime.

Non applicable.
When a non-resident wants to do business in Argentina, it
is necessary to register with the tax authorities, but when the
non-resident does non-recurring activities, this registration is
not done and Argentina have no withholding tax rules to avoid
this omission.

digital services to private consumers resident
in your country?
No.

The tax rules establish different kinds of penalties that the tax
authorities may impose on the taxpayers:
a formal fine when the VAT returns are not submitted
on time
if the corresponding payment is done after the due date, the
taxpayer must to pay interest.

There are two monthly informative regimes, one for sales and
another for purchases that must be filed by taxpayers who meet
certain conditions and requirements.

Yes, the tax rules establish different kinds of penalties that the
tax authorities may impose to the taxpayers:
a fine when a taxpayer omits to declare the tax. It is
graduated from 50% to 100% of the omitted tax
a fine when the taxpayers commit a tax fraud. It is graduated
from two to ten times the omitted tax. If the amount
exceeds the limit established, the Penal Tax Regime would
be applied.

claimed if they are not registered in Argentina?
No.

Yes, a non-established person has to appoint a fiscal
representative in the tax authority in order to register.

VAT returns normally cover a monthly accounting period,
ending on the last day of a calendar month.
All VAT returns have to be submitted electronically within
20 days of the end of the relevant monthly accounting period,
together with any tax due.
Argentina

the sellers name and business address
the legal address and its registration with the Competent
Authority in Corporate Law
the sellers identification number (CUIT)
the sellers turnover tax registration number
the sellers VAT status (registered, exempt,
simplified regime)
beginning activities date
the printers name and identification number
first and last number of the invoices printed
printing authorisation code and due date of these invoices
a letter which identifies the different kind of invoices,
depending on the fiscal status of the seller and purchaser
original or duplicate
the invoice date
the customers Identification number (CUIT)
the customers VAT status (registered, exempt,
simplified regime)
the quantity and description of the goods or services
unit prices and total, excluding the VAT
if the seller invoices in foreign exchange, the invoice will
include the exchange rate used
the total amount payable, excluding VAT
the rate and the total amount of VAT charged
the rate and the total amount of collections if applicable
the total amount of the invoice.
services, it must:
or services
VAT invoices can be issued, received and stored in an electronic

format and in the near future all tax payers will have to
issue electronic invoices. The tax authorities established the
obligation for taxpayers who met specific conditions, but it is
possible for other taxpayers to use this regime after requiring
authorisation. Electronic invoices must contain the same
information as paper invoices. To ensure the authenticity of
origin, the integrity of content and legibility of the invoices,
these invoices must contain an electronic authorisation code
(CAE) provides by the tax authorities.
For further information on indirect tax in Argentina please contact:
Nstor Taravini
T +54 11 4105 0000
E nestor.taravini@ar.gt.com
Julia Adano
T +54 11 4105 0061
E julia.adano@ar.gt.com
Juan Pablo Fossati
T +54 11 4105 0000
E juan.fossati@ar.gt.com
Brazil
ICMS 1% to 37% (supplies in same state), or 4%, 7% or 12% (supplies between states)
IPI 0% to 365% (based on tariff classification)
ISS 0% to 5%
PIS 0.65% (cumulative system), or 1.65% (non-cumulative)
COFINS 3% (cumulative system), or 7.6% (non-cumulative)
Please note: A range of rates can apply from 0.65% (PIS) and 9% (COFINS), additional products such as
gas have a defined value and not a percentage rate.
to these rates?
No.
Indirect taxes in Brazil are levied at a federal, state and municipal level. The principal indirect taxes levied
are:
Federal
IPI (Federal Excise Tax)
COFINS / PIS (Social Contribution)
State
ICMS (State Value Added Tax)
Municipal
ISS (Municipal Service Tax)
No. Registration generally due upon commencement of taxable activity.

Only businesses that are established in Brazil may register for ICMS, IPI, ISS, PIS and COFINS.

N/A

Yes. Penalties can be imposed for errors and omissions in relation to ICMS, IPI, PIS, COFINS and ISS.
IPI returns are generally due on a monthly basis, with an annual return also submitted.
ICMS returns are generally due on a monthly basis
ISS returns are generally due on a monthly basis (but frequency differs between municipalities)
PIS and COFINS returns are due on a monthly basis
Brazil
Sistema Pblico de Escriturao Digital (SPED) including the Nota Fiscal Eletrnica (NF-e).

No, there is no mechanism to refund any form of indirect tax incurred by businesses that are neither
established nor registered in Brazil.

Indirect taxes in Brazil are levied at a federal, state and
municipal level. The principal indirect taxes levied are:
Federal
IPI (Federal Excise Tax)
IPI is a federal tax on transactions involving manufactured

goods. It must be paid either when manufactured products
leave the industrial establishment or when manufactured
products are imported. Export revenues are exempt from IPI.
When manufactured products are sold between producers,
IPI is imposed. Nevertheless, the subsequent manufacturer is
entitled to book a tax credit for the tax levied on the previous
operation. The credit is normally indicated in the invoice of the
goods acquired.
The tax rates vary depending on the type of product
manufactured or imported and are levied ad valorem based on
the Table of Excise Tax Levy (TIPI). Certain exemptions exist
for goods considered to be a basic necessity for the countrys
economy. For example, the IPI rate levied on cigarettes is 300
per cent, while the rate levied on soap is zero. It must be noted
that rates can be modified at any time by an Act of the Chief of
the Brazilian Executive Government. The act is effective from
the moment of its publication.
PIS and COFINS (social contributions)
PIS and COFINS are social contributions charged on the

monthly gross revenues of Brazilian companies calculated
through a cumulative regime and a non-cumulative regime:
Non-cumulative regime: COFINS is charged at 7.6 per cent
and PIS is charged at 1.65 per cent (therefore a combined
rate of 9.25 per cent). Companies are granted a tax credit
calculated on the acquisition of inputs and on certain
expenses such as raw materials of goods and services. This
system ensures that the tax is applied only once on the final
value of each transaction. There are also different rates for
specific activities determined by law. However, please note
that the concept of input is a grey area and the Brazilian
Tax Authorities have been known to challenge companies
for utilizing certain credits.
Cumulative regime: COFINS is charged at 3 per cent and

PIS is charged at 0.65 per cent (therefore a combined rate
of 3.65 per cent). Credits are not permitted which makes
the taxes cumulative throughout the supply chain (financial
entities are subject to a different cumulative system).
Companies who elect the Estimated Profit Method are
subject to the cumulative regime
PIS and COFINS are also due upon the payment, credit,
delivery or remittance of the amounts related to the
importation of raw materials, goods and services. In general,
PIS and COFINS are not levied on export transactions.
State
ICMS (State Value Added Tax)
ICMS is a type of value added state tax generally levied

on imports (customs clearance), sales, transfers and other
transactions involving goods, inter-municipal and inter-state
transportation services and communication services (including
electricity).
For imports of goods and transactions within the same
State, the regular ICMS rates are from 17 per cent to 19 per
cent. However, for some specific goods, the applicable rate on
import operations and sales within the State may be different
from the regular ones. When transactions involve two different
States, the rates are 7 per cent or 12 per cent depending on the
States involved. The applicable rate is 4 per cent on interstate
transactions with imported goods, irrespective of the States
involved, with some minor exceptions.
ICMS is also due either when a product is resold in the
domestic market or when it is physically moved from a
manufacturing facility.
ICMS taxpayers are entitled to a tax credit at the amount
of the tax paid in the previous transaction with the same goods
(inputs), provided the purchaser is an ICMS taxpayer with
respect to that product. The tax credit may be offset against
future ICMS payables.
Brazil
Municipal
ISS (Municipal Services Tax)
ISS is a municipal tax on certain services listed by the federal

government (in Complementary Law 116/2003). The taxable
basis of ISS is the price or value of the service rendered. The
rates vary from 2 per cent to 5 per cent, generally depending
on the municipality where the service provider or imported is
located, where the service is provided and the type of service.
Imported services are also subject to ISS taxation regardless
of whether the service is performed abroad. Exported services
are tax exempt, provided certain conditions are met.
ISS is a single stage tax with no right of credit for ISS
previously paid. Please note that there are in excess of 5,000
municipalities in Brazil.

No. Registration generally due upon commencement of taxable
activity.

your country?
No, there is currently no specific legislation to tax non-resident
supplies of electronically supplied services to private consumers
in Brazil.

Only businesses that are established in Brazil may register for
ICMS, IPI, ISS, PIS and COFINS. Therefore, a business will
need to create a permanent establishment in Brazil in order to
register for indirect taxes.

IPI is generally reported on a monthly basis on the Declaration
for Federal Taxes and Contributions (DCTF).
ICMS returns are due on a monthly basis, consisting of the
GARE (a payment receipt) and an ICMS declaration detailing
all ICMS on sales and purchases during the period.
ISS returns are generally due on a monthly basis (but
frequency may differ between municipalities).
PIS and COFINS taxpayers must submit the DCTF
and the Declaration for PIS and COFINS Purposes (EFDContributions) on a monthly basis.

Yes. Penalties can be imposed for errors and omissions in
relation to ICMS, IPI, PIS, COFINS and ISS.

Sistema Pblico de Escriturao Digital (SPED) was created to
standardize and digitize the transfer of information between
the tax authorities and taxpayers. Businesses must generally
file, monthly or annually, all account and tax information
available based on a standard uniform electronic format.
SPED is composed of five major areas, including the Nota
Fiscal Eletrnica (NF-e). NF-e is a digital fiscal document
issued and stored electronically, allowing real-time tracking
and monitoring of business transactions by the Brazilian Tax
Authorities.

not comply with the indirect tax rules.

claimed if they are not registered Brazil?
No, there is no mechanism to refund any form of indirect
tax incurred by businesses that are neither established nor
registered in Brazil.

Electronic invoicing in the format of the Nota Fiscal Eletrnica
(NF-e) is generally mandatory for most Brazilian businesses.
The business issuing the invoice generates an XML document
that contains the information required for the NF-e, and this
must be digitally signed with a digital certificate in order to
guarantee the integrity of the data and the issuers identity. The
tax authority makes an initial evaluation of the NF-e and sends
an authorisation for issue and for example, for goods to be
transported.
Please note that the invoicing requirements may vary from
city to city and from state to state.
For further information on indirect tax in Brazil please contact:
Fbio Mancilha
T +55 19 98136-2328
E fabio.mancilha@br.gt.com
Brazil
Canada
The Goods and Services Tax (GST) applies federally at 5% all goods and services unless defined to
be exempt or zero-rated.
A provincial component is combined with GST for the Harmonised Sales Tax (HST). The HST applies
for supplies made in Newfoundland and Labrador, New Brunswick, Ontario, Nova Scotia and Prince
Edward Island. The provincial component varies between 8% and 10%.
Quebec Sales Tax (QST) currently applies at the rate of 9.975% this applies on the consideration
for the supply on all goods and services unless defined to be exempt or zero-rated.

to these rates?
No.
GST/HST and QST are value added taxes that represent the principal indirect tax in Canada. Where
applicable, some provinces also administer their own retail sales tax. Provincial retail sales taxes apply in
British Columbia, Saskatchewan and Manitoba. The tax rate varies from 5% to 8%.
Yes. Any person carrying on business in Canada, including a non-resident, is required to become
registered for GST/HST if their worldwide taxable sales exceed the registration threshold of
$30,000 annually.

Yes.

No. Non-residents without a permanent establishment in Canada are required to post security with the
taxing authority. The security is equal to 50% of the estimated net tax of the person with a minimum of
$5,000 and a maximum of $1,000,000.
Once registered, GST/HST and QST registrants are required to file returns on a monthly, quarterly or
annual basis depending on their annual sales made in Canada. Special returns may be required for
financial institutions.

Yes. If a GST/HST and QST return, or the corresponding payment, is submitted late a penalty can
be imposed.
Canada
Yes. Provincial sales tax returns may be required, as well as other returns for specific tax purposes such
as insurance tax.

For the most part no, however in limited circumstances the tax on import may be claimed by another
party but it should be reviewed first.

Canadian sales taxes are levied at both the federal and provincial
level. The federal government administers the value added GST
and HST. Federal audits and administration is undertaken
by the Canada Revenue Agency, except in Quebec where
Revenue Quebec administers both GST/HST and QST for
most registrants except certain financial institutions. The other
provinces administer their own provincial sales tax.
GST/HST
The GST is applied for taxable supplies made in Canada at the

rate of 5%, unless HST is applicable as described hereafter.
GST is a value added tax that applies to the value of the
consideration on most goods and services supplied or imported
into Canada. Most GST registrants are entitled to recover GST/
HST paid on expenses by claiming an input tax credit (ITC) or
rebates in limited circumstances may be available.
The provinces of Newfoundland and Labrador, New
Brunswick, Nova Scotia, Ontario and Prince Edward Island
have repealed their provincial sales taxes in order to participate
in the HST (combined rate of the 5% GST and a provincial
component). When a supply is made within these participating
provinces, HST is now applicable instead of GST. The tax
base for GST and HST is the same. The HST rate is 13% in
Newfoundland and Labrador, New Brunswick, and Ontario,
15% in Nova Scotia and 14% in Prince Edward Island. The rate
in New Brunswick will increase to 15% as from 1 July 2016.
Specific place of supply rules determine in which province
the supply is deemed to have occurred and which rate of GST
or HST will apply. These rules changed effective 1 May 2010.
Certain goods and services, such as exports, basic groceries and
prescription drugs are generally zero-rated, ie taxed at 0%. GST/
HST is not collected on zero-rated supplies but the supplier is
entitled to claim ITCs for the GST or HST paid on related inputs.
Goods and services such as financial services, health and
educational services are exempt. No GST or HST is charged
on exempt supplies. However, unlike zero-rated supplies,
ITCs cannot be claimed for expenses related to making exempt
supplies. Certain public sector bodies such as charities may be
entitled to prescribed rebates.
QST
The Quebec Sales Tax (QST) is also a value added tax

and applies only to taxable supplies made in the province of
Quebec. Generally, both GST and QST apply on the same
goods and services. These taxes are stated separately on the
invoice. The rules governing the application of QST have
generally been harmonized with those for GST. Most QST
registrants are entitled to recover QST paid on expenses
by claiming an input tax refund (ITR) or in certain
circumstances rebates.
QST currently applies at the rate of 9.975% on the
consideration for the supply.
Although Quebec harmonised the QST with the GST
effective 1 January 2013, they continue to maintain a separate
tax with separate registration and reporting. Revenue Quebec
also administers the GST/HST for businesses located in
Quebec except for certain financial institutions.
Large businesses
Large businesses in Ontario and Prince Edward Island with

revenues in excess of $10 million for the associated group are
subject to reporting and recapture of the provincial component
of the HST on certain expenses. These recapture rules
effectively restrict refunds for the provincial component of the
tax on meals and entertainment, motor vehicles, fuel for motor
vehicles (other than diesel), telecommunications and energy not
used in manufacturing. The recaptured input tax credits will be
at the rate of 100% of the provincial component of the tax for
the first five years and will then gradually be phased out over a
three year period. If eligible, there will be full recovery of the
tax on these expenses in Ontario effective 1 July 2018 and in
Prince Edward Island effective 1 April 2021.
The same restrictions apply in Quebec although the
compliance requirements differ. For QST purposes, large
businesses with revenues in excess of $10 million for the
associated group are restricted from claiming refunds of
ITRs on the same categories of expenses. Quebec has
announced that they will also phase out the ITR restrictions for
large businesses, effective 1 January 2021.
Canada

Any person carrying on business in Canada, including a nonresident, is required to become registered for GST/HST if
their worldwide taxable sales exceed the registration threshold
of $30,000 annually. A non-resident does not need to have a
permanent establishment to be required to register. Once a
person is carrying on business in Canada and makes a taxable
supply in Canada, they are required to register provided their
worldwide revenue has exceeded $30,000. A slightly higher
threshold of $50,000 is available for public sector bodies such as
charities and not-for-profit organisations.
In certain cases, voluntary registration may be permitted
for residents or non-residents who are not required to become
registered but wish to collect tax and recover the tax they pay.
QST registration is similar to the GST/HST registration
requirements for a business being carried on in the province
of Quebec; however, there are certain restrictions for nonresidents of Canada voluntarily registering for QST.
Registration in the other provinces depends on a number
of factors. There is no revenue threshold to apply. Most
provinces look to the presence and activities being carried on
in the particular province to determine registration. Manitoba
and British Columbia specifically require non-residents of the
province to register if taxable sales are made and there is direct
marketing in their province.

Yes.

No. Non-residents without a permanent establishment in
Canada are required to post security with the taxing authority.
The security is equal to 50% of the estimated net tax of
the person with a minimum of $5,000 and a maximum of
$1,000,000.

Once registered, GST/HST and QST registrants are required to
file returns on a monthly, quarterly or annual basis depending
on their annual sales made in Canada. The GST and HST are
filed on the same return. The QST is typically a separate filing
in the province of Quebec but in limited cases a joint GST/HST
and QST return is permitted to be filed.
Monthly returns are required if the Canadian taxable

revenue of the person and the associated group is over $6
million. Quarterly returns are required if the taxable revenue of
the person and the associated group is over $1,500,000 and is $6
million or below. Annual filing is required where the revenue is
$1,500,000 or below. A person can elect to file more frequently
if so desired and would do so if refunds are anticipated.
Electronic filing may also be mandatory.
Returns are due within one month after the reporting
period for monthly and quarterly filers and within three
months for annual filers. Any net payable for a reporting period
must be paid at the time of filing. Annual filers are required to
post quarterly instalments after their first year.
If the return is in a net refund position, the refunds will be
paid out to the registrant. The registrant must have the required
documentary support on hand prior to making an ITC or ITR
claim on the return.
Group or consolidated filing is generally not permitted
federally. Each entity must file on its own. Certain exceptions
may occur with an election for eligible investment plans.
Returns are prepared on an accrual basis not on a cash basis.
If a customer fails to pay for the taxable goods or services
purchased and the supplier has remitted the respective federal
and provincial sales taxes on the supply, this supplier can claim
a partial bad debt relief from the respective taxing authorities.
However, the debt must be written off from the suppliers
books and records in order to be eligible for the relief and
the relief itself does not necessarily equal the tax; the amount
is prorated depending on the amount of consideration
already received.
The federal government and the respective provincial
governments have instituted systems of penalties in their tax
legislation to discourage failure to comply with their respective
sales tax system. In addition, interest is charged on amounts
outstanding. These interest and penalty amounts are generally
not deductible for income tax purposes.

A penalty may be imposed by the tax authority if GST/HST
and QST returns are not submitted on time, or the related tax is
not paid by the due date.

Certain information returns may also be required for financial
institutions including pension plans.
Canada

not comply with the GST/HST and QST rules.
Penalties and interest can be applied for errors and
omissions made on tax returns or where the tax is paid late.
serious matters.

claimed if they are not registered in Canada?
Generally not unless the tax was paid in error; there are limited
rebates and some instances where tax on import may be claimed
by another party.

An invoice must show:
the suppliers name or business name, or the name of an
intermediary
the invoice date
total amount of invoice
amount of applicable tax
suppliers GST/HST and QST registration numbers
purchasers name or business name
terms of payment
supplied to the customer.
It is important to note that the tax authorities are very strict in
regards to the supporting documentation for ITC and
ITR purposes.
Other taxes
Provincial sales taxes
Most other provinces impose their own retail sales tax (RST).
Unlike the GST/HST and the QST, the RST is not a value
added tax and is not recoverable. The provincial RST is
generally applicable on most tangible personal property and
services for the repair, maintenance, installation, and other
services related to such taxable property. Real property,
royalties and intangible personal property are not taxable for
RST purposes with the exception of software. Most software
and related services, other than specifically defined custom
software, are subject to the provincial RST.
RST is administered in each of the provinces of Manitoba,

Saskatchewan, and British Columbia. The tax application and
registration requirements can vary by province. Generally, the
RST rates vary from 5% to 8%. Special rates can apply to the
sale of alcohol, insurance and admissions.
All RST provinces have unconditional exemptions for
certain supplies such as basic groceries, health supplies and
books. Conditional exemptions also apply to goods purchased
for the purpose of resale and in some provinces, certain
machinery and equipment used directly in manufacturing
goods for resale. However, exemption certificates or other
exempting documentation must be obtained by the vendor
to support the exemption and registration may be required to
provide such documentation.
Provincial RST returns are generally filed on a monthly basis
and in Manitoba and Saskatchewan are due 20 days following
the end of the reporting month. Some relief is available to file
on a less frequent basis but only for very small or seasonal filers.
Returns in British Columbia are due to be filed on the last day
of the month following the reporting month and must be filed
electronically where annual sales exceed $1.5 million.
The province of Alberta does not have an RST and years ago
the provinces of Newfoundland and Labrador, Nova Scotia and
New Brunswick eliminated their RST and harmonised their tax
with the federal GST to create the federal HST. Up until the end
of June 2010, the province of Ontario also had a retail sales tax.
British Columbia was an HST participating province from 1 July
2010 but reverted back to an RST system 1 April 2013. Prince
Edward Island eliminated its provincial sales tax and became a
participation HST province also effective on 1 April 2013.
Furthermore, the following additional taxes may apply:
specific taxes
a provincial sales tax continues to apply on insurance
premiums including but not limited to the provinces of
Ontario and Quebec
excise taxes
environmental levies.
For further information on indirect tax in Canada (other than Qubec) please contact:
Cathy Kuhrt (Toronto, Ontario)
T +1 (416) 360-4986
E cathy.kuhrt@ca.gt.com
Mark Singer (Halifax, Nova Scotia)
T +1 (902) 420-7185
E mark.singer@ca.gt.com
For further information on indirect tax in Quebec please contact:
Maurice Arsenault (Montreal, Qubec)
T +1 (514) 393-4817
E arsenault.maurice@rcgt.com
Maryse Janelle (Montreal, Qubec)
T +1 (514) 954-4686
E janelle.maryse@rcgt.com
Chile
Standard flat rate of 19% for goods and services.

to these rates?
No.
Value Added Tax (VAT) is the principal indirect tax in Chile. VAT is charged on all recurring sales and some
specific services, whether recurrent or not.
No. All taxpayers that make transactions subject to VAT must pay this tax.

Not applicable, there is no limit.

A non-established person that has operations in Chile must appoint a fiscal representative.
Taxpayers must submit a tax return on a monthly basis.

Yes. If a VAT return, or the corresponding payment, is submitted late then a penalty can be imposed.
Yes. Certain luxury items and beverages are subject to sales tax in addition to VAT, at rates that vary
according to the type of items sold. Fuels and gas are also subject to sales tax in addition to VAT.

No, you must be registered to claim tax refunds.
Chile

Chile. The VAT rate is a flat rate of 19%.
In general, VAT is applicable on the price charged for the
following transactions:
sales of tangible goods provided by habitual sellers
performing such transactions on a recurrent basis
services, whether habitual or not, that can be
considered commercial, industrial, financial, or related
to mining, construction, insurance, advertising or other
commercial activities
imports, whether habitual or not
transactions deemed by the VAT law as sales and
services. Examples of these transactions are:
the leasing of tangible goods and of real estate that
includes furniture in general or equipment which fits
the property for commercial or industrial use

regular/habitual sale of new real estate
royalties or lease payments for the use of patents,
trademarks or similar rights
constructions of any kind when built totally or
partially by construction companies
fixed assets sold before they are fully depreciated or
within four years from their acquisition

withdrawal of tangible assets from inventory

interest accrued in a sale on credit.
There is no registration limit for this tax.

Every person or legal entity that has operations in Chile,
either for sales of goods or services rendered, must register at
the Chilean Internal Revenues Service (IRS).
This tax also applies to the Treasury, semi-public
institutions and autonomous bodies of the state administration,
municipalities and enterprises belonging to them or in which
these agencies have participation.
Imports are subject to the same 19%, rate whether regular
or not, made by any natural or legal person.
The tax must be declared and paid monthly. Its amount
corresponds to the difference between the tax debit and the
tax credit. If the difference results in a remnant, there is a
mechanism that allows for using it in future periods.
VAT contained in the invoices receipt can form part of
the VAT credit only the month it is received, plus two
additional months.
Exporters are exempt for the sales that are made abroad,
having the right to recover VAT paid against the purchase of
goods or use of services for the export activity.
Among the transactions not subject to VAT are:

professional and technical assistance services
capital contribution of tangible assets made by a DL 600
foreign investor, when some requirements are met
sales of used vehicles, if the same requirements are met
interest on loans and securities
lease of real estate under some circumstances
exports
real estate transfer under some circumstances
international freight, both by air and sea
The VAT paid on imports, purchases, and services received
(tax credit) is deducted from the VAT due on sales and services
rendered (tax debit). The vendor or the service provider must
file a monthly tax return and pay a net debit the twelfth day of
the subsequent month. If the taxpayer is an electronic biller, the
tax return can be pay by internet until the 20th of that month.

VAT registration also applied for businesses that are carried out
in Chile by foreign persons or entities. This registration applies
without limit.

The tax authority in Chile may direct a person to appoint a
VAT representative to act on his behalf for the purpose where
the person:
is a taxable person or makes taxable supplies or acquires
goods in Chile
is not established, and does not have a fixed establishment
in Chile
in the case of an individual, he does not have his usual place
of residence in Chile.
Chile

your country?
Payments abroad are subject to different Additional Tax rates.
As they are subject to Additional Tax they are exempt of VAT.

VAT returns cover an accounting period of one month, ending
on the last day of a calendar month.
As said, on a monthly basis, VAT taxpayers may deduct
their VAT credit from their VAT debit. The excess of VAT
debit should be declared and paid monthly. On the contrary,
if in a given month the VAT credit exceeds the VAT debit, the
remaining VAT credit balance is carried forward and cannot
be refunded in cash. A refund in cash is available only for VAT
credit derived from the acquisition of fixed assets where a credit
balance persists for at least six month.
In general, only registered VAT taxpayers can benefit from
VAT credits.

A penalty is imposed by the tax authority if VAT returns
are not submitted on time, or the related tax is not paid by the
due date.
The delay or omission in the presentation of statement that
are not the immediate basis for determining tax, is punishable
by a fine ranging between USD $82 and USD $972 approx.
The delay in paying taxes to the Treasury, subject to
withholding or surcharge is punishable by a fine of 10% of the
taxes owed. The fine will increase by 2% for each month or
fraction of a month of delay, which cannot exceed 30% of the
tax due.
If the failure is detected by the Chilean IRS the fine will be
20%, and reach a maximum of 60%.

In Chile, taxpayers must also pay indirect taxes for alcoholics
(ILA), fuels (IEPD), gas (GLP) and luxury goods.
These indirect taxes must be paid through the same tax
return that the VAT returns. The rates of these taxes vary
according to the class of item sold.

Fines and interest can be applied for errors or omissions
made on tax returns, or where the tax is paid late. Penalties and
interests can also be applied where the business do not maintain
adequate records. Criminal proceeding may be brought in the
case of more serious matters.

claimed if they are not registered in Chile?
No, VAT cannot be reclaimed by cross borders businesses if
these are not registered as having operations in Chile.

the invoice date
the detail of the waybill if the supply is made in a
previous day
the total amount of VAT charged expressed in
Chilean pesos.
the rate of VAT (19%)
It is possible to issue invoices in electronic format, but must
have the agreement of the authority. Electronic invoices must
contain the same information as paper invoices.
For further information on indirect tax in Chile please contact:
Hctor Castillo
T +56 2 26513000
E hector.castillo@cl.gt.com
Chile
Costa Rica
Standard rate of 13% for most goods and a determined and definite list of services.
Tax-exempt products include the so-called basic basket (groceries and basic articles for the home);
human and veterinarian medicines; agricultural goods; educational materials; and miscellaneous
articles (power consumption under 250 KW/h, etc.).

these rates?
There is a tax bill under discussion in the Congress to reform current general sales tax to a value added
tax. The tax rate for goods and some services would increase to 15%, and there would be a reduced rate
for other services such as education and health. Nonetheless, it is not foresee to be approved soon as
there is much apposition.
Value Added Tax (VAT) is the principal indirect tax in Costa Rica. It is a tax on consumer expenditure, and
No. Every person or company that sells goods or services on a regular basis has to be registered before
tax authorities.

Not applicable.

No.
Returns have to be submitted on a monthly basis.

No.

No.
Costa Rica

Costa Rica.
It is a tax applied on the sales of goods and services. It is
also applied to goods, and certain services, entering the country.
process rests with the business making the sale.
A transaction is within the scope of Costa Rican VAT if the
it is a sale of goods or services
it takes place in the Costa Rican territory
Costa Rica, or has a liability to become registered
A fixed sales tax rate of 13% is applied at all stages of the sale of
merchandise or the invoicing of certain limited services. The tax
is levied on:
i) sales of merchandise within the national territory (except
sales of land, buildings, exports, and certain basic necessity
items, such as basic foodstuff, certain medicines and
veterinary products)
ii) the value of services performed by restaurants, bars, motels,
printing companies, social and recreational clubs, and
painting and repair shops, and others
iii) imports consisting of merchandise for personal use or
consumption or to satisfy commercial needs.
Businesses that make exempt supplies are unable to claim all of
the input tax that they incur, so the VAT paid to suppliers will
be a real cost.
Services subject to tax payments (by exception) include
restaurants; bars, nightclubs, and social clubs; hotels and other
lodging means; motor vehicles, repair shops, and parking lots;
telephone, cable, and telex; photography; customs deposits;
dry cleaning; public events except sports, theaters, and movie
theaters for children; advertisements; customs services; real
estate services; and international moving activities.
Most goods imported into Costa Rica from outside are

subject to VAT. The tax will have to be paid by the importer at
the time of importation. Where the importation is for business
purposes and the importer is registered for VAT, it may be
possible to reclaim the tax (subject to certain rules).
Taxpayers may only recover the sales tax by means of credit
since cash reimbursements are not allowed. Credit may only
be applied in the month corresponding to the tax payments on
articles and services.
In the event of tax credits not being applied correctly, the
taxpayer must demand reimbursement of the corresponding
amounts in a specific request. No automatic compensation
of credits for previous taxes is available. However, an excess
amount of VAT may be transferred to the following balance
sheet to compensate for VAT obligations. Costa Rican law used
to allow for transfer excess tax credits to another taxpayer by
means of a private negotiation.

There is no a registration limit for the tax. A person who
either makes or intends to make taxable sales of goods or
services in the course or furtherance of a business must register
for VAT.
fails to register at the correct time. Without prejudice to the
penalties that could apply, those who do not fulfill their
obligations to register are obliged, however, to pay the tax,
and not entitled to a refund or credit for the tax paid on the
existence of goods which remain in inventory at the date of
registration as taxpayers.

There is no a registration limit for the tax.

in your country?
No. There are no specific regulations for these type of
situations. Goods are taxed normally during the import process.
As mentioned, VAT is applied on a determined and definite list
of services, which do not include those electronically supplied/
digital from non-residents.
Costa Rica

No. The VAT is applied for sales of goods and services within
the Costa Rican territory. Sales made outside are not subject
to VAT. Exportations of goods and services are not subject to
VAT.

VAT returns have to be submitted in a monthly basis.
All VAT returns have to be submitted within 15 days of the
end of the previous month (when sales were made).

Interests will also be applied on the late payment of tax.

No.

Civil penalties interest can be applied for errors and
serious matters.

claimed if they are not registered in Costa Rica?
No. VAT paid in other countries cannot by claimed.
VAT that can be claimed: The tax credit is established by
adding the tax actually paid by the taxpayer on purchases,
imports or admissions that take place during the current month
as well as the tax paid in respect of insurance premiums to
protect goods, machinery and supplies directly incorporated
or used in directly in the production of goods or the provision
of taxable services. The tax credit is also applicable in the case
of acquisition of goods that are physically incorporated in the
production of goods exempt from the payment of this tax,
as well as machinery and equipment primarily intended to
produce the goods listed. In addition, the tax credit is awarded
on the acquisition of goods that are physically incorporated in

the production of goods that are exported or not exempt from
paying this tax.

the invoice date
the customers name
services, it must:
or services.
format and there is no need to tell the tax authority. Electronic
invoices must contain the same information as paper invoices.
The method used to ensure the authenticity of origin, the
integrity of content and legibility of the invoices is a business
choice and can be achieved by any business controls which
create a reliable audit trail between an invoice and a supply of
goods or services.
For further information on indirect tax in Costa Rica please contact:
Heiner Orozco
T +506-2253 9782
E heiner.orozco@cr.gt.com
Costa Rica
Mexico
Standard rate of 16% for most goods and services, besides leasing and importing goods.
Zero-rated goods and services include most food and medicines, books and newspapers.

these rates?
No.
Value Added Tax (VAT) is the principal indirect tax in Mexico. It is a tax on consumer expenditure, and is
collected on the selling of goods, rendering services, leasing and imports.
No, every taxable transaction in Mexico is necessary to register.

No, individuals and legal entities which carry out VAT activities in Mexico are subject to register all of their
transactions.

Yes. A non-established corporation with no permanent establishment in Mexico needs a fiscal

representative in order to register.
Most businesses are required to submit VAT on a monthly basis.

Yes. An additional declaration has to be submitted on a monthly basis, known as DIOT, regarding
operations with third parties.
Yes. Penalties can be imposed for errors or omissions.

No. VAT refunds may not be granted to foreign corporations.
Mexico

Mexico.
VAT applies to most transactions involving goods or
services taking place within the Mexican territory. Such
transactions include the importation of goods and services
from abroad. VAT consists in a 16% tax rate applied to each
transaction.
The VAT mechanism involves VAT collected, which is
charged to the buyer when a sale is made; and VAT outlay,
which is paid to the seller when a purchase is made. When
the difference is positive (VAT collected is greater than VAT
outlays) it is forwarded to the tax authorities with the monthly
VAT return. When the difference is negative (VAT outlays are
greater than VAT collected) a refund or tax offset claim may be
filed on a monthly basis.
VAT may be an easy tax to work with, but on certain
circumstances it may create substantial cash flow consequences.
Additionally, proper precautions need to be taken since VAT
refunds may not be granted to foreign corporations. A proper
VAT planning may be required to avoid a negative impact on
VAT.
The following acts or activities are subject to VAT, within
Mexican territory:
supplies of goods
services provided
leasing of goods
importation of goods or services.
Most businesses are required to submit VAT on a monthly

basis.

For non-compliance, a fine which ranges from 55% to 75%
of the tax omitted.

Additionally, taxpayers must submit on a monthly basis, an
informative tax return of transactions with third parties, also
known as DIOT.

For mathematical mistake, a fine which ranges from 20% to
25% of the tax omitted.
In case of failure to submit the DIOT, a fine which ranges
from 9,430 to 18,860 Mexican pesos.

claimed if they are not registered in Mexico?
No. There is no refund mechanism to foreign corporations.

This is not applicable in Mexico; every taxable transaction in
Mexico requires a necessity to register.

Not applicable in Mexico.

The Mexican Federal Tax Code establishes the obligation to
register in the Federal Taxpayer Registry for
all legal entities and for individuals who must file tax returns
or issue electronic tax invoices, for the acts or activities they
carry out, for the income they obtain, or in case they opened a
financial account.
A non-established corporation with no permanent
establishment in Mexico needs a fiscal representative in order to
register.

the sellers registration number and tax regimen
the invoice date
the invoice place of expedition
the customer registration number
a description (including quantity/measure unit) sufficient to
identify the goods or services supplied to the customer
total amount of the good or the service
total amount of VAT charged expressed
mention if total payment is completed in one or more
payments.
For further information on indirect tax in Mexico please contact:
Mario Rizo
Daniel Santiago
T (52 33) 38174480
T (52 33) 38174480
E mario.rizo@mx.gt.com
E daniel.santiago@mx.gt.com
Santos Briz
T (52 55) 54246500
E santos.briz@mx.gt.com
Pedro Zugarramurdi
T (52 55) 54246500
E pedro.zugarramurdi@mx.gt.com
Panam

Alcoholic beverages 10%.
Tobacco and derived 15%.
Zero-rated goods and services include most food, medicine and schools materials.

to these rates?
No.
Value Added Tax (VAT), locally it is named (ITBMS), is the principal indirect tax in Panam. It is a tax on
consumer expenditure, and is collected on business transactions and imports.
No.

Yes.

No.
The VAT returns have to be submitted on a monthly basis. In other words, in the first 15 of the next month.

Yes. If a VAT return or payment is submitted late then there is a penalty of 10%.
Yes. Additional declarations (withholding tax/remittance abroad) have to be submitted, when a foreign
entity perform services to a company in Panam.
Yes. A 10% surcharge from the total tax, if not submit on time.

No. Panam has a territorial tax base.
Panam

Value Added Tax (VAT) in Panam is named (ITBMS), this is
the principal indirect tax.
It is a tax on consumption which is applied in the sales of
goods or services. Although VAT is ultimately borne by the
consumer by being included in the price paid, the responsibility
for charging, collecting and paying it to the tax authority rests
with the business that makes the sale or performs the services.
In addition, when a non-resident performs any services in
Panama, the beneficiary of this service has to withhold the VAT
in the payment, and then remit the VAT to the tax authority
within ten days of the payment.
or services (including any VAT paid at importation). The
difference between the output tax and the deductible input tax
in each accounting period will be the amount of VAT payable
by the business to the tax authority. Where the input tax
exceeds the output tax, it can be applied as credit in the next
month.
There are three rates of VAT that are applied in Panama.
The standard rate (7%) for sales and services, for alcoholic
beverages 10% and 15% for tobacco and derived.
Businesses that have exempt income are unable to claim all
of the input tax that they incur, so the VAT paid to suppliers
will be a cost or expense.
All imported goods into Panama are subject to VAT.
importation.
Finally, if the entity is not subject to VAT it can obtain an
e-certificate of non-contributor of VAT. This can be obtained
from the tax authority website.

For VAT there is not a registration limit. The only thing that
the fiscal law considers is the total revenue on the last income
tax return. If this is more than thirty six thousand dollars
(US$36,000) in the next fiscal year, the entity will be subject to
collect the VAT.

that are not established in Panam. But if a non-established
business performs services in Panam, the entity that receives
the service of the non-established has to withhold the VAT.

your country?
No.

No.

A VAT return has to be submitted and paid monthly. In other
words, the VAT of a current month has to be submitted within
the next.

A default surcharge penalty of 10% is imposed by the tax

No.

Yes. Where an entity that collects VAT and does not remit to
the tax authorities other kinds of penalties can be considered.
It can be from five to ten times the original amount of the tax
payable.

claimed if they are not registered in Panam?
No.
Panam

In Panam generally all the entities have to have a fiscal invoice
machine. If no apply, his invoices have to show the following:
the invoice date
the name of the company who make the invoice (form)
the initial and final invoice number in the sequential invoice
paid
where the invoice does not identify the VAT amount,
it must state that the VAT is include in the invoice total
amount.
VAT invoices can be issued, received and stored in an electronic
format, but in this case the entity has to have authorisation
from the tax authorities.
For further information on indirect tax in the Panam please contact:
John C. Cheng
E cheng.jr@pa.gt.com
Panam
Peru

Not reduced rate applicable.

to these rates?
No.
Value Added Tax (VAT) is the principal indirect tax in Peru. It is a tax on consumer expenditure, and is
collected on sale of goods, services performed and used from abroad, construction contracts, first sale
of immovable property by the constructor and imports (including imports of intangible).
Not applicable.

Not applicable.

In Peru, for VAT purposes, the taxpayer is the resident person.
Monthly.

Yes. If a VAT return, is submitted late a penalty can be imposed.
No.

No. In all situations included in the scope of the VAT, the taxpayer is the resident person.
Deduction of VAT
For deducting input VAT as a credit, the purchase should be deductible as expense for Income Tax
purposes and such acquisition should be intended to an operation also taxed with VAT.
Peru

Peru.
ie the sale.
Our VAT legislation taxes the following transactions:
sale of goods
performing and use of services performed by non-residents
construction contracts
first sale of immovable property by the constructor
import of goods (including intangibles).
The tax rate is 18% applicable over the price of the transaction.
Regarding sale of goods, our legislation defines goods
as those tangibles that may be carried from place to other,
its related rights, distinctive signs, inventions, copyrights,
goodwill and similar, ships and aircrafts, including documents
representing these ones.
With regard to performing of services, our legislation
defines services as any performing that a person does to
another and for which receives third category income for
purposes of income tax, even when not subject to the latter tax;
including the lease of movable and immovable property and
leasing.
For deducting input VAT as a credit, the purchase should
be deductible as expense for income tax purposes and such
acquisition should be intended to an operation also taxed with
VAT.
Some special regimes are considered by our legislation, as
the benefit granted to exporters of goods or services. In such
cases, the input VAT could be refunded in cash from the tax
authorities.

Not applicable.

Not applicable.

your country?
There is not specific or different legislation to this effect. In
general, these services will be taxed with VAT taking into
account the rate of 18%.

Not applicable.

On a monthly basis.

Yes. If a VAT return, is submitted late a penalty can be
imposed.

No.


claimed if they are not registered in Peru?
No.
Peru

the sellers tax registration number
the invoice date
the total amount of VAT charged expressed in sterling.
format and there is no need to tell the tax authority.
For further information on indirect tax in the Peru please contact:
Juan Carlos Basurco
T +51 1 994057428
E juancarlos.basurco@pe.gt.com
Carlos Chirinos Robb
T +51 1 615 6868
E carlos.chirinos@pe.gt.com
Peru
Puerto Rico
Sales and Use Tax (SUT)

Standard rate of 11.5% split as follows:

10.5% paid at the state level

1% paid at the municipal level
Starting on 1 October 2015 a special SUT of 4% was established on business to business services
(B2B) and designated professional services (these services used to be exempt before 1 October
2015).
Several exemptions are granted.
VAT
As of 1 June 2016 a VAT system will be established with a standard rate of 10.5% at the state level.
0% rate applicable to the following:

sale of goods for export

provision of services for export

certain sales to manufacturers (exemption certificate and zero rate for manufacturing plants).
The 1% at municipal level will continue to be in effect under the SUT system.
Several exemptions are granted.

to these rates?
No. The current 4% special tax as well as the basic 11.5% SUT will be in effect until the Puerto Rico
Treasury Department (PRTD) completes the migration to a VAT system on 2016.
SUT is the principal indirect tax in Puerto Rico. It is a tax on sales and use of taxable personal tangible
property and services to the final consumer based on sales price. Certain exclusions exist for this tax. Use
tax is required to be paid on imports to be used in the operations and the retirement of inventory as gift as
well as on services rendered by a non-resident. Also, importers and resellers of tangible personal property
are taxed upon introduction or purchase of items and a credit mechanism is available to avoid double
taxation. However, the SUT system will be changing to a VAT system in 2016.
All merchants must complete a mandatory registration by filling form AS 2914.1 with the PRTD 30 days
before the beginning of operations.

Two factors have to be analysed in order to determine if a registration is required, the first one is nexus
and the second is source of income. If both factors are present the merchant is required to complete the
registration with the PRTD.
Puerto Rico

Merchants can complete the registration documents internally or appoint a representative to complete
the process. Merchants should include all the localities where the offices, warehouses, branches, etc. are
located in the registration form.
Merchants are required to submit SUT returns on a monthly basis. The due date of the imports monthly
returns is the tenth day following the month of introduction of items. The due date for both the Basic
(10.5%) and the Special (4%) SUT returns is the twentieth day of the month following the month in which
the transaction occurred. The returns should be filed electronically. Service providers with a volume of
business of $50,000 or less are not classified as withholding agents; therefore they are not required to
file monthly returns.

Yes. If a SUT return, or the corresponding payment, is submitted late a penalty can be assessed by the
PRTD.
Yes. A Declaration of Imports for Use must be completed and filed electronically upon introduction of
items to Puerto Rico.

Not applicable.
Deduction of VAT
Not applicable.

The Sales and Use Tax (SUT) is the main type of indirect
taxation in Puerto Rico. However, during 2016 Puerto Rico
will be implementing a Value Added Tax (VAT) system.
The SUT is a tax on all sales of tangible personal
property or taxable service, admission rights, storage, use, or
consumption in Puerto Rico, unless specifically exempted or
excluded. The SUT applies at the time of the sale or when the
service is provided. It is also applied to goods, imported for
use or consumption within Puerto Rico, and to items that will
be part of inventory for resale. The taxpayer importing the
products that will be used or consumed will be responsible for
the payment of the use tax. It also applies to services rendered
by a non-resident to a Puerto Rico merchant.
The responsibility for collecting the SUT and depositing it
at the PRTD rests with the registered merchant which makes
the sale or provides the service. A registered merchant who
has been certified as a withholding agent by the PRTD will
charge 11.5% SUT on all sales of tangible personal property or
services provided. However, if the merchant that provides the
services is not engaged in trade or business in Puerto Rico, the
person responsible for the payment of the SUT is the person
that receives the service in Puerto Rico, regardless of where the
service has been rendered, provided that such service is directly
or indirectly related with the operations or activities carried out
in Puerto Rico.

The 11.5% SUT is distributed in two portions: 10.5% for

the state, and 1% for the municipality in which the merchant is
operating. The merchants are required to deposit 10.5% with
the PRTD and 1% with the municipality in which operations
are being carried out. On the other hand, the 4% Special SUT
is only deposited with the PRTD (the business to business
services (B2B) or designated professional services are not
subject to municipal SUT).
The service transactions between two registered merchants
were not taxable under the B2B exclusion. After the approval
of Act 40 of 30 June 2013 certain services will no longer fall
under the B2B exclusion and will be subject to SUT, even
though the transactions are between two registered merchants.
Furthermore, Act 72-2015 not only increases the SUT rate
to 11.5%, but also establishes a 4% Special SUT on B2B and
designated professional services starting 1 October 2015. The
following is the list of taxable services subject to the 11.5%
SUT:
certain bank charges
collection services
security services
cleaning
laundry
repair and maintenance of real and personal property (not
capitalised)
telecommunications
waste collection services
operating leases of motor vehicles that constitute a daily
lease.
Puerto Rico
The 4% Special SUT will be imposed on B2B services and the

following designated professional services (DPS):
certain legal services
tax return specialists
professional services regulated by their respective
Examining Boards under the P.R. Department of State
agronomists
architects and landscape architects
certified public accountants
brokers, sellers and real estate companies
professional draftspersons
professional real estate appraisers
geologist
engineers and surveyors
DPS if rendered by a non-resident person to a person
located in P.R., regardless of the place where the service was
rendered.
Certain exclusions from the 4% Special SUT are available for
both B2B and DPS.
Besides the mandatory merchant registration certificate,
the PRTD has implemented a set of additional certificates and
waivers from the collection of tax and allows some taxpayers to
claim credits for the tax paid on their purchases. These are:

Exemption certificate for manufacturing plant provides
an exemption for manufacturers on the purchase of
raw material, equipment and other materials used in the
manufacturing process.

Eligible reseller certificate provides an exemption to a
reseller on the purchase of taxable items for resale. As a
requirement 80% of the inventory retired during the last
three years were sales to exempt persons or for export.

Reseller and municipal exemption certificate provides an
exemption of the municipal portion of the tax paid directly
to the municipality in which business is being conducted
(1%). This allows the taxpayer to claim a credit of the tax
paid on purchases for resale.
There are some items that are exempt from SUT under the
Puerto Rico law, among them are the following:
unprepared food
prescribed medicines
articles or equipment to compensate for physical or
physiological deficiencies for disabled persons
school or university books
back to school tax free holiday for the purchase of school
articles and uniforms
services provided to the Puerto Rico Government or the US
Government
services rendered by persons whose annual volume of
business is $50,000 or less
additional exemptions exist for child care centres,
cooperative, hospital facilities and centres for the care of the
elderly, among others.

Each merchant who wants to conduct business in Puerto Rico
must register with the PRTD at least 30 days before starting
operations in Puerto Rico.
The failure to register exposes the merchant to a penalty of
$10,000. In addition, a penalty for the failure to register with
the Sales and Use Tax Regulatory program (previously known
as IVU Lotto) in the amount of $20,000 could be imposed by
the PRTD.

A non-established business could also be required to register
with the PRTD if it has sufficient nexus and Puerto Rico source
income. The regulations issued by the Puerto Rico Treasury
provide seven factors to be considered in the determination of
nexus:
if the merchant has establishments or offices in Puerto Rico
if the merchant has employees, agents, or representatives
in Puerto Rico, who solicit business or carry out business
transactions in the name of said retail seller
if the merchant owns tangible personal property or real
property in Puerto Rico
if the merchant creates a nexus with Puerto Rico in any
way, including, but not limited to the execution of purchase
contracts in Puerto Rico, direct marketing or purchases by
mail, radio, distribution of unsolicited catalogues, through
computers, television, or any other electronic means, or
advertisements in magazines or newspapers, or other means
Puerto Rico
if there is an agreement or reciprocity with another

jurisdiction of the United States, and said jurisdiction uses
its taxing authority and its jurisdiction over the merchant in
support of Puerto Ricos authority
if the merchant accepts, expressly or implicitly, the tax
levied by Subtitle BB of the code
if the merchant has a sufficient connection, or a relationship,
with Puerto Rico or its residents, but not those described in
the above clauses, with the purpose or objective of creating
a sufficient nexus with Puerto Rico to impose on the
merchant the responsibility of collecting the SUT.
Recent government legislation has expanded the definition of
nexus to amplify situations in which a merchant is considered
to be engaged in the sale of tangible personal property in Puerto
Rico.

in your country?
Yes. If services are rendered by a non-resident person to a
person in Puerto Rico they shall be subject to SUT by selfimposition (reverse charge).

It is not mandatory to appoint a fiscal representative to
complete the registration.

SUT returns have to be submitted the twentieth day of each
month. The return will include the transactions that occurred
in the month before the return is being submitted. All returns
have to be submitted electronically.

Various penalties and additional charges are imposed by the
Puerto Rico Treasury in cases where the merchant does not
submit the returns or pay the tax on time. In addition to the
tax liability of the month the PRTD will impose the following
additions to the tax:
failure to pay tax 25% up to 50% of the insufficiency,
100% for repeat offenders
failure to file a return the highest of 10% of the tax
liability or $100.

Yes. A Declaration of Imports (Form SC 2970) is required
to be filed and paid in order to take possession of imported
property.

not comply with the SUT rules.
The following is a list of the most common penalties assessed
for non-compliance with the SUT rules:
Issue Penalty
Failure to register
$10,000
Selling, ceding or transferring the

Merchants registration certificate
$5,000
Providing false information on the

petition for registration
$5,000
Failure to notify changes or

$500
amendment to the required information
Falsifying the merchants registration $10,000
certificate
Failure to display the merchants
registration certificate
$1,000
Improper advertisement Range from $1,000 to $20,000

depending on the frequency
Failure to display separately the sales $100
and use tax or for not displaying notice
Displaying a falsified merchants
registration certificate
$5,000 for each violation
Taking improper possession of

$5,000 for each violation. Once a
imported tangible personal property person is authorised to move the
freight, a penalty of $10,000 (for
each violation) can be imposed if they
break the seal of the freight trailer
out of the presence of a fiscal official
of the PRTD
Failure to keep documents
$20,000 for each violation
Additional penalties exist in relation to the exemption

certificates and credits. In addition, the failure to pay the
tax will be subject to interest at an annual rate of 10% and
surcharges at an annual rate of 5% if the delay is from 31 to 60
days or 10% if the delay is more than 60 days.

be claimed if they are not registered in Puerto
Rico?
Not applicable.
Puerto Rico
What information must a SUT/VAT invoice

show?
Each merchant responsible of collecting SUT, will include
the tax in a separate line in the receipt, invoice or any other
evidence of the sale. The segregation of the tax between the
state and municipal portions is not mandatory. Therefore, the
merchant could have a receipt or invoice reflecting the total
cost of the items purchased and an 11.5% SUT or could have a
receipt or invoice showing the total cost of the items purchased
and two separate lines reflecting the state portion of the SUT
and the municipal portion of the SUT.
In addition, merchants required to use the fiscal device of
the SUT regulatory program, must provide a receipt issued by
the fiscal terminal to their clients.
When the implementation of the VAT system occurs in
June 2016, merchants that purchase goods or services may
request from the seller or service provider a fiscal statement
within 30 days after the receipt of the goods or services. The
seller merchant must provide the fiscal statement within 30
days. A fiscal statement will not be required if the goods or
services are exempt, subject to 0% tax, sold to a small merchant
or sold at retail.
In the case of a retail sale (sale of goods or rendering of
services from a merchant to a person that is not a merchant),
the seller merchant must provide to the buyer a receipt, invoice,
ticket or any other evidence showing the VAT separately from
the price of the good or service sold.
A VAT fiscal statement should include:

title Value Added Tax Fiscal Statement
sellers name, address and registry number
purchasers name, address and registry number
issuing date of fiscal statement
serial number of the fiscal statement
description of the goods or services rendered
selling price of the goods sold or service rendered
VAT amount
total amount invoiced, including the VAT
any other information determined by the secretary of the
treasury through an official document.
For further information on indirect tax in Puerto Rico please contact:
Maria de los ngeles Rivera, CPA
T +1-787-754-1915 ext. 207
E maria.rivera@pr.gt.com
Javier Oyola
T +1-787-754-1915 ext. 227
E javier.oyola@pr.gt.com
Puerto Rico
United States
Rates vary between states and among localities within states. Depending on the jurisdiction, general
rates can range from 0 to over 13%.
Complete exemptions and reduced rates and apply to certain goods and services. Exemptions and
reduced rates vary among different jurisdictions.
Exemptions frequently apply to necessities such as unprepared food, and prescription medicines.
Additional (higher) rates may apply to purchases of vice items such as alcoholic beverages.

to these rates?
Yes. There are almost 10,000 sales and use tax jurisdictions in the U.S. With this many jurisdictions, some
rates are likely scheduled to be changed in any given year.
Sales tax (and a complementary use tax) is the principal indirect tax in the USA. Sales tax is a tax on
consumer expenditures and is collected on retail sale transactions. The use tax is a tax on the use of
goods that were purchased elsewhere and were not subject to a jurisdictions sales tax.
No, generally. Many states waive registration and collection requirements for occasional and/or isolated
sales, which are extremely limited and often do not apply to business transactions. Aside from these
exemptions, dealers making sales at retail are typically required to register for and collect sales and use
tax.

Yes. Sales and use tax laws, including exemptions, typically apply to all sellers doing business within a
jurisdiction, regardless of where the seller is based. Collection and filing obligations in the particular state
jurisdictions, however, depend on whether the non-established businesses have sufficient presence in the
jurisdiction to require a sales tax collection obligation.

For sales tax registration purposes the appointment of a fiscal or authorized representative is not
required, although in many instances doing so can be useful as tax registrations can often be complex. A
jurisdiction may also require additional registrations, such as with a Secretary of State, which often require
the listing of a registered agent.
The frequency of returns varies by jurisdiction. In most cases, returns are filed monthly. Some jurisdictions
allow for quarterly filings for businesses with sales under certain thresholds, and some jurisdictions require
periodic reconciliation filings, which may occur quarterly.

Yes. Penalty and interest may be imposed for late filing of returns and/or late payment.
United States
Yes. Additional documentation may be necessary for taxpayers claiming certain exemptions or exclusions.
These may include exemption certificates or sale-for-resale certificates (B2B transactions).

Yes, collection and remittance requirements are typically imposed on all businesses whose contacts
with a jurisdiction are sufficient enough to establish nexus (and a corresponding filing obligation) with that
jurisdiction, regardless of whether the business properly registered as required.
Sales tax (and a corresponding use tax) is the primary indirect

tax in the United States. Sales tax is a tax on consumer
expenditures and is collected on sale transactions. Most
jurisdictions in the U.S. require that the seller collect sales tax
on the sale of taxable goods or services and remit the tax to the
appropriate jurisdictions tax authority.
Sales tax is only imposed on retail transactions. That is, tax
is only due on the purchase of a taxable good or service when
the purchase is made by the end-user of that good or service.
When a taxable good or service is purchased by a customer
that will resell the good or service, the purchase is generally
not subject to sales tax. In such cases, it is generally the sellers
responsibility to collect from the purchaser documentation
attesting that the purchaser is buying the goods or services in
order to resell the goods or services.
It is possible for a vendor to not charge sales tax at the point
of sale initially because the vendor does not have a physical
presence or agents in a jurisdiction. To compensate for this
possibility, jurisdictions impose a use tax that is complementary
to the sales tax. The use tax is a tax on the use or consumption
of goods in a jurisdiction, regardless of where the goods were
purchased. The use tax is imposed on the purchaser of goods
or services, not the seller. Purchases of goods or services that
were subject to a jurisdictions sales tax are exempt from the
jurisdictions use tax. Additionally, use tax is generally not
due to the extent that the purchaser paid sales tax to a different
jurisdiction on the transaction and that jurisdiction also had the
right to tax the transaction (the use tax paid must be equal to or
greater than the sales or use tax that would otherwise be due).
There is no limitation on the requirement that a seller register

for and collect sales tax (or a purchaser for use tax) based on
the dollar amount of sales made. Many jurisdictions, however,
provide exemptions for occasional and isolated sales. Under
these exemptions, a seller typically is not required to register for
or collect sales tax on sales that it only makes a certain number
of times in a given period. For example, an individual selling
his or her personal possessions or a company liquidating its
assets may not be required to collect sales tax, depending on
the law of the jurisdiction in which the sale takes place. These
exemptions are not available in every jurisdiction, however.

Where a company is located or established has little or no
bearing on whether the company is required to register for
and collect sales tax. Instead, a seller is required to register
for sales tax in a jurisdiction to the extent that the seller has
nexus with the jurisdiction. That is, the company must have
contacts with the jurisdiction that are substantial enough to
allow the jurisdiction to impose collection responsibilities on
the seller. Although these requirements vary from jurisdiction
to jurisdiction, the general rule is that almost any amount of
physical contact with a state is sufficient to establish nexus with
the jurisdiction. A company that has property or personnel
in a jurisdiction, or that sends an employee, independent
contractor, or agent into a state on behalf of the company,
likely has physical contact sufficient to establish sales tax nexus.
Additionally, some jurisdictions will find nexus even without
conventional physical presence. Certain online e-business
relationships, affiliate relationships, and sales thresholds may
be enough to establish nexus in some jurisdictions for sales tax
purposes. Therefore, nexus, like almost all aspects of sales and
use tax compliance, must be examined on a jurisdiction-byjurisdiction basis.
United States

your country?
Many jurisdictions impose sales and use tax on the purchase of
digital goods and services, electronically downloaded software,
software as a service, and similar electronically supplied
offerings. Whether supplies of such offerings are subject to sales
tax in a given jurisdiction depends on whether the jurisdiction
imposes tax on such goods or services. The tax can be imposed
on the seller or the consumer, depending on whether the seller
has nexus. A sellers obligation to collect depends on whether
the seller has established nexus with the jurisdiction.

The concept of businesses being established and nonestablished does not exist in the US for sales and use tax
purposes. Instead, the critical consideration is whether a
business has established nexus with a particular jurisdiction,
which would require that business to register and collect sales
tax. Unlike the concept of being established, nexus does not
depend primarily on a businesss primary location, but on
whether a business has substantial contacts with a jurisdiction.
If there are no minimum contacts with a jurisdiction (as defined
above), then a business does not need to register.
Establishment principles aside, businesses typically do not
need to appoint a third-party fiscal representative to register
for sales and use tax in most jurisdictions. In some instances,
a company may decide to appoint a representative, such as a
certified public accountant or an attorney to assist with the
registration process because registration requirements and
procedures can be complex. Additionally, doing business in
some jurisdictions may require registration with other agencies,
such as the Secretary of State. These additional registrations
may require that the company list a registered agent, which is
often a third party.

Penalties and interest and typically imposed for both late
filings of returns and late payments of tax. Penalties for failure
to file or pay can be as high as 50% of the tax due for the
period. Many jurisdictions also impose penalties for substantial
underpayments or for non-payments that are the result of
fraud or wilful neglect. In some instances, the waiver of some
penalties may be secured.

Sales and use tax compliance has fairly strict documentation
requirements in virtually all jurisdictions. As a baseline,
jurisdictions generally require that businesses maintain a
complete record of all transactions for several years, usually five
years at a minimum. Records generally include invoices, bills of
lading, gross receipts from sales, and other pertinent records.
In addition, taxpayers must retain all exemption
documentation. This may include resale certificates or
consumer exemption certificates. For example, if a business
makes a tax-free sale to a wholesaler, the business must collect
a resale certificate from the wholesaler, and the business must
retain the certificate. Otherwise, the business may be held liable
for the tax due on the transaction.

In some instances, a jurisdiction may require some taxpayers
to make advance estimated payments of sales and use tax prior
to the date the taxpayers are required to file their returns and
remit their tax payments. Late payment penalty can apply to
both the tax payment and the estimated penalty. Additionally,
jurisdictions often impose penalty for late payments or nonpayments that are the result of fraud or wilful neglect. In these
instances, the various penalties may stack.
serious matters, and individual liability can attach to responsible
company employees.

The frequency with which returns must be filed varies by
jurisdiction. For most jurisdictions, sales and use tax returns
must be filed on a monthly basis. Some jurisdictions, however,
allow for less frequent filings for taxpayers whose sales are
under a set threshold. Other jurisdictions require reconciliation
filings that must be submitted in addition to the periodic
sales and use tax return filings. The filing periods for these
reconciliation filings varies by jurisdiction.
United States
Can the sales and use tax incurred by overseas

businesses be claimed if they are not registered
in the United States?
A non-resident generally cant reclaim sales tax levied.
A business need not be registered with any particular state
or jurisdiction to incur sales and use tax obligations. To the
extent that a company has established nexus with a jurisdiction
for sales and use tax purposes, that company may be subject to
the jurisdictions taxing authority. Although nexus standards
vary slightly by jurisdiction, nexus is generally established
to the extent that a company has any physical presence in a
particular jurisdiction. Physical presence may be an office,
warehouse, owned or leased personal property, or the presence
of personnel, including independent contractors or agents
that travel into the state to act on behalf of the company.
Additionally, some jurisdictions find nexus as a result of a
taxpayer being an affiliate of an entity that has established
nexus, as a result of a company entering into certain referral
agreements with persons that have established nexus, or via
internet marketing or advertising activity.
What information must a sales tax invoice show?

Taxing authorities in the Unites States generally do not have
specific sales tax invoices, but certain information should be
on invoices that are issued to comport with recordkeeping
requirements. Depending on the requirements of the various
jurisdictions, invoices may need to show: the billing and
shipping address of the purchaser, the address of the seller,
the amount of the transaction, a description of the goods and/
or services provided, the transaction date, any tax charged
separately stated, and other pertinent information. Additional
information may be required in order to utilize certain
exemptions.
For further information on indirect tax in the United States please contact:
Rob Clarke
T (813) 204-5153
E rob.clarke@us.gt.com
Uruguay
Standard rate of 22% for most goods and services within national territory, the introduction of goods
into the country, and the value added over real property from works by means of administration
performed by those who are not Income tax on Economic Activities (IRAE) taxpayers, at a basic rate
of 22%.
Reduced rate of 10% for some goods as the ones from the family food basket, the first sale of real
estate, and certain services such as health services.
Zero-rated for exports of goods and services and for sales of agricultural goods in some cases.

to these rates?
Yes, it is supposed that the standard rate will be 20% in the future.
Value Added Tax (VAT) is the principal indirect tax in Uruguay.
No.

No.

No, in case of those taxes.
Most businesses are required to submit VAT and IMESI returns on a monthly basis.

Yes.
In some cases, special declarations are required (i.e. VAT in case of a vehicle acquisition in order to
deduct the VAT).
Yes. Penalties can be imposed in other circumstances.
Uruguay
Value Added Tax (VAT) is the principal indirect tax

in Uruguay.
VAT is levied on operations dealing with the domestic
circulation of goods, the rendering of services within national
territory, the introduction of goods into the country, and
the value added over real property from works by means of
administration performed by those who are not Income tax on
Economic Activities (IRAE) taxpayers, at a basic rate of 22%.
Goods integrating the family food basket, the first sale of
real estate, and certain services such as health services shall pay
taxes at a 10% minimum rate.
Exportation of goods is subject to this tax at a rate of zero
% in all cases. Additionally, exportation of services is subject
to this tax at a rate of zero % if the services are included in
a specific list (list that can be increased by a decree of the
Uruguayan executive power). Following are some examples of
services considered exportation:
international freight of goods (in transit) outside Uruguay
services for construction of airplanes and boats
services in the free port and Uruguayan free zones, only if it
is necessary to render the service in these zones
services rendered to non-residents regarding specific sectors,
(eg, TV, cinema, logistical services, etc.)
advisory services rendered to foreign entities, involving
activities developed, goods situated or rights used outside
Uruguay, when the services are used economically
outside Uruguay
advertising services rendered by advertising agencies to
foreign clients, if the material is used exclusively abroad.
No.
If the service is not included in the list, the service will be taxed
at a rate of 22%.
This tax operates according to the tax against tax system.
VAT credit for exportation can be recovered.
If the goods a corporation sells or the services rendered are
VAT exempted, the corporation has nothing to deduct from
and the VAT paid on its purchases of goods or services will
become part of cost. In case of exports VAT rate zero % the
VAT credit is still available against other taxes.

in your country?
No.

Not applicable, there is no registration limit.

Regarding VAT, there is no obligation to appoint a fiscal
representative. In almost all cases, a withholding agent
is appointed.

The tax is calculated and paid either monthly or annually,
depending on the taxpayers volume of business. In the case of
annual calculation, payments are to be made on account, based
on transactions for the month.
Sworn tax returns are to be submitted monthly or annually,
depending on whether the tax is calculated monthly or
annually, with accumulated data for the year underway and, at
year-end, the outstanding balance is calculated and paid (or a
tax credit is carried over to the following year).

Yes. In case of late submission of the tax return a penalty (not
significant) is imposed. In case of late payment, a penalty of
5%, 10% or 20% is imposed over the tax not paid (depending
how long), and then surcharges are also imposed. Surcharges
are generated every day.

In some special cases, some declarations need to be issued.
Uruguay

In some cases, if the VAT is not paid with the intention to avoid
and hide the taxable event before the tax authority, our law
states the existence of tax fraud as a monetary penalty and as a
penal crime (defraudacin tributaria).
If a company incurs in formal deficiencies regarding formal
requirements only if is possible to understand that the company
has the intention to commit tax fraud, our law states a judicial
procedure in order to close the company for a certain period of
time (six working days or more, depending the case).
Please note that according to our law, in some cases (not all
of them) the penalty of contravencin could be applicable over
each document which may contain a formal deficiency with a
limitation of 1,000 penalties.

the sellers tax registration number
the invoice date
the customers name and address, and sometimes the
identification number in case of individuals
Additionally the details of the print house shall be included in
the invoice, as well as a QR code.
For further information on indirect tax in Uruguay please contact:
Nicols Juan
T +598 2908 33 86
E njuan@gt.com.uy
Carla Kaphammel
T +598 2908 33 86
E ckaphammel@gt.com.uy
GST implementation in
India has moved a step closer
but a lack of political consensus
continues to create ambiguity on
a realistic implementation date. The
GST Constitution Amendment
Bill is currently pending with
the Rajya Sabha.
Malaysia
implemented GST in
April 2015 with a standard
rate of 6%, replacing the
historic sales tax and
service tax systems.

Asia Pacific
Australia and New

Zealand both announced
new legislation to tax non-resident
supplies of digital services. New
Zealand 1 October 2016,
whereas Australias new
Netflix tax is slated to be
introduced with effect
1 July 2017.
VAT reform
continues in China with
the construction, real estate,
finance and consumer services
industries moving with the
scope of VAT with effect
1 May 2016.
Asia Pacific
Australia
Standard rate: 10%
Other: 0%
Bangladesh
Standard rate: 15%
Other: 7.5%, 5.5%, 5%, 4.5%, 0%
Cambodia
Standard rate: 10%
Other: 0%
China
Standard rate: 17%
Other: 0%-13%
Hong Kong
Hong Kong does not currently levy any VAT, GST
or sales tax.
India
Standard rate: 1% to 15%
India has a dual taxation structure, which results in
the levy of multiple indirect taxes by the central and
state government(s).
Indonesia
Standard rate: 10% Other: 0%-4%
Japan
Standard rate: 8%
South Korea
Malaysia
Standard rate: 6%
Other: 0%
New Zealand
Pakistan
Standard rate: 17% (goods), 14-16% (services)
Other: 0%
Philippines
Singapore
Standard rate: 7%
Other: 0%
Taiwan
Standard rate: 5%
Other: 20/25%, 2%, 1%, 0%
Thailand
Standard rate:7%
Other: 0%
Vietnam
Australia
Taxable supply rate of 10%.

GST-Free supply no GST.
Input taxed supply no GST.

these rates?
No.
Goods and Services Tax (GST) is a tax on final consumption. The GST is calculated at the rate of 10% of
the GST-exclusive price of the goods and services provided.
Yes. It relates to the current or projected annual turnover and once the limit has (or will be) reached it is
necessary to register.

Yes. Non-resident entities that make supplies that are connected with Australia are required to register if
the registration turnover threshold is met. A non-resident enterprise is required to be registered if its GST
turnover is at or above 75,000 Australian dollars (AUD).

Not applicable.
An entity must either lodge its Business Activity Statements (BASs) on a monthly or quarterly basis.
Generally, most small businesses lodge their BASs on a monthly basis.

Yes. If a GST return, or the corresponding payment, is submitted late a penalty can be imposed.
No.

No. A company must be registered for GST before it is entitled to any input tax credits.
Australia

GST is a tax on final consumption in Australia.
The GST is calculated at the rate of 10% of the GSTexclusive price of the goods and services provided.
Where GST does not apply because the supply is
either GST-free or input taxed, a rate of 0% applies. The
following table provides some examples of GST-free and input
taxed supplies.
GST-free supplies
Input taxed supplies
Food Financial
Health Residential
Education
School tuck-shops
Exports
School canteens
Charities
Water and sewerage
Precious metals
The following table summarises the types of supplies and

related GST treatment.
Supply Examples
GST

treatment

Recoverability of
GST credits on
related acquisitions
Taxable Consulting services

GST charged

to a firm in Australia
at 10%

Full recoverability of
GST credits on
creditable acquisitions
GST-free Consulting services

No GST applied

to a firm outside of

Australia for application

Full recoverability of
GST credits on
outside Australia
Input-taxed Supply of money

No GST applied

lending services

No recoverability
of GST credits on
(there may be a partial
recovery in certain
circumstances)

An entity that is carrying on an enterprise, whose current
or projected annual turnover is 75,000 AUD or more
(excluding GST).
Non-profit bodies are not required to be registered unless
their current or projected annual turnover is AUD 150,000 or
more (excl. GST).
Taxi operators are required to be registered regardless of
their annual turnover.
Voluntary registration is available for domestic and
overseas companies.

Yes. Non-resident entities that make supplies that are
connected with Australia are required to register if the
registration turnover threshold is met. A non-resident
enterprise is required to be registered if its GST turnover
is at or above 75,000 AUSD.

Not applicable.

A Business Activity Statement (BAS) is required to be lodged
by a registered entity to the Australian Taxation Office (ATO)
to record its GST and other tax liabilities.
An entity must either lodge its BAS on a monthly or
quarterly basis. Generally, most small businesses lodge their
BASs on a quarterly basis. However, an entity must lodge
its BAS monthly if its annual turnover is more than AUD 20
million or it has chosen to lodge monthly.
An entity with a monthly tax period must lodge its BAS by
the 21st day of the month following the end of the tax period.
In the case of entities with quarterly tax periods, the BAS must
be lodged by the dates shown in the following table:
If this day falls within the
quarterly tax periods
Lodge the BAS on or before

this date
1 September
1 December
1 March
1 June
The following 28 October

The following 28 February
The following 28 April
The following 28 July

your country?
The Australian Government in May 2015 released proposals
to amend the GST law to impose GST on offshore intangible
supplies to Australian consumers with effect from 1 July 2017.
The amendments will result in supplies of digital products,
such as streaming or downloading of movies, music, apps,
games, e-books as well as other services such as consultancy
and professional services receiving similar GST treatment
whether they are supplied by a local or foreign supplier. The
GST registration threshold of AUD$75,000 will apply to these
offshore suppliers.
Australia
Further proposed changes include:

Shifting the responsibility for GST liability (in some
circumstances) from the supplier to the operators of
electronic distribution platforms. The Governments view
is that this will minimise compliance costs as operators
are generally better placed to comply. However, this will
not occur if the platform operator does not control any
of the key elements of the supply. These key elements are
the authorising for payment or delivery of the supply, and
setting of the terms and conditions.
Allowing for entities that are making such intangible
supplies that are only connected with Australia to become
limited registration entities. Such entities will not be entitled
to an Australian Business Number, must account for GST
quarterly, will have no requirement to issue tax invoices and
will not be entitled to claim input tax credits back. Further,
the registration and reporting process will be simplified.
We note that, if these amendments are passed by Parliament,
the end Australian consumer will be paying more for imported
products which will extend beyond digital media to all
services.

Taxpayers who fail to meet their tax obligations may be liable
for penalties and interest charges. When the ATO finds an error
or omission, they take into account the circumstances of the
individual, including their compliance history, when deciding
what action to take, particularly for any penalties or possible
prosecution action. Relevant circumstances include the reasons
for the discrepancy or failure to meet a tax obligation and
how well the taxpayer has complied with their tax obligations
in the past.
A penalty is an amount that is calculated using either a
statutory formula or in multiples of a penalty unit.
The types of penalty which apply can be administrative,
civil or criminal. Civil and criminal penalties are imposed by
courts and administrative penalties are imposed without the
need for court action.
Interest charges apply to unpaid amounts, such as shortfall
amounts, late payments and tax debts. Interest charges apply
whether or not a penalty applies. Having interest charges
applied to a shortfall amount does not depend upon, or imply,
dishonesty on the tax payers behalf.

not comply with the GST rules.
serious matters.
Can the GST incurred by overseas businesses be

claimed if they are not registered in Australia?
No. A company must be registered for GST before it is entitled
to any input tax credits.
What information must a GST invoice show?

A GST invoice must show:
the suppliers identity and Australian Business
Number (ABN)
the recipients identity or the recipients ABN if the
total price of the supply or supplies is at least $1,000 or
such higher amounts as the regulations specify, or if the
document was issued by the recipient
what is supplied, including the quantity (if applicable) and
the price of what is supplied
the extent to which each supply, to which the document
relates, is a taxable supply
the date the document is issued
the amount of GST (if any) payable in relation to each
supply to which the document relates
if the document was issued by the recipient and GST is
payable in relation to any supply that the GST is payable
by the supplier.
For further information on indirect tax in the Australia please contact:
Tony Windle
T +61 (07) 3222 0222
E tony.windle@au.gt.com

Not applicable.
Australia
Bangladesh

Reduced rate of 5% is applicable for procurement provider, 4.5% is applicable for information technology
enabled services (ITES), 7.5% is applicable for sponsor services, 5.5% is applicable for construction.
Zero-rate shall be imposed on any goods or services exported or deemed to have been exported
from Bangladesh.

these rates?
No.
Value Added Tax (VAT) is the principal indirect tax in Bangladesh. VAT is imposed on goods and services
at import stage, manufacturing, wholesale and retail levels.
Any business, having annual turnover not more than Taka eight million, may get exemption from obtaining
registration.

No. Businesses not established in Bangladesh do not require VAT registration. If any non-resident forms a
branch/subsidiary/joint venture in Bangladesh for rendering the services or supply of goods, only then will
they need VAT registration.

No, as it is not necessary to obtain VAT registration for non-established business under VAT laws.
VAT returns are required to be submitted monthly.

Yes. If a VAT return, or the corresponding payment, is submitted late then a penalty can be imposed.
Yes. VAT registered entities are required to comply with the following provisions of VAT laws:
declaration of price to impose VAT before supply of goods
declaration of annual turnover in case of turnover tax
declaration regarding factory place, plant, capital machinery, fittings, etc.

No. This is not permitted according to VAT laws of Bangladesh.
Bangladesh
Value Added Tax (VAT) is one of the most important sources

of tax revenues in Bangladesh. VAT is a tax, which is charged
on the increase in value of goods and services at each stage of
production and circulation.
VAT is imposed on goods and services at import stage,
manufacturing, wholesale and retail levels. A uniform rate of
15% is applicable for both goods and services. Exports are zero
rated.
Importers, manufacturers and service providers, having
minimum annual turnover Taka eight million, have to pay 15%
tax on their value addition. Turnover tax at 3% is leviable on
those entities whose turnover amount is not more than Taka
eight million. There is also provision for supplementary duty
which is applicable on luxurious, non-essential and socially
undesirable goods.
VAT will be payable upon goods manufactured or
produced for carrying out or for expansion of business or
on goods imported, purchased, acquired or procured in any
manner by a registered entity at the time of one of the following
events whichever occurs first:
when the goods are delivered or supplied
when an invoice relating to supply of the goods is issued
when any goods are used personally or supplied for use of
any other person
when part or full payment is received.
Suppliers of taxable goods and services, importers of any goods

and exporters of goods and services shall have to be registered
under VAT laws. Those falling under the category of turnover
tax and cottage industry are not required to register for the
purposes of VAT. However, a producer or service provider
with a turnover below Tk eight million (thereby falling under
the category of turnover tax and cottage industry) may
voluntarily register for the purposes of VAT.
If any person supplies taxable goods or services, or carries
out import or export trade from two or more places, they can
get VAT registration for each place separately or get central
registration for all the places subject to maintaining of accounts
and records centrally.
The following documents shall have to be submitted along
with the VAT registration application form:
trade license
TIN certificate (if any)
IRC/ERC certificate (if any)
list of all related selling centres in the case of central
registration
declaration of the production or business premises, plant,
machinery, fittings, finished or tradable goods, stocks, and
inputs.
VAT shall be payable, when a taxable service is rendered by

a registered entity, at the time of one of the following events
whichever occurs first:
when the service is rendered
when an invoice relating to the service is issued
when part or full payment is received
when part or full payment is made in case of services
received from outside Bangladesh.
Every registered entity must maintain and preserve a purchase
accounts register, sales accounts register, invoice register,
current account register and other commercial documents.
The VAT authority may, on the basis of the application of a
registered entity, allow it to keep the documents mentioned
earlier through computer subject to certain conditions.
Person includes any business organisation, group of persons

and association.

As per the VAT laws, business not established in Bangladesh
do not require VAT registration. If any non-resident forms a
branch/subsidiary/joint venture in Bangladesh for rendering
services or supply of goods, only then will they have to get
VAT registration.

in your country?
No. There is no separate and specific legislation in the VAT
laws regarding impact of VAT on non-resident supplies of
electronically supplied/digital services to private consumers.
Bangladesh

No, as it is not necessary to obtain VAT registration for nonestablished business under VAT laws.

Generally a VAT return is considered as a regular report for
sales and services subject to VAT which is required to be
submitted by the entities registered under VAT laws. In the
return the amount of VAT liability will be stated.
A manufacturer, producer or trader of VAT able goods or
services shall submit a VAT return for every month within 15th
day of the next month.

An entity shall be liable to a monetary penalty if it fails to
submit a VAT return within a specified date. The VAT
authority is empowered to realise the amount of unpaid VAT
from the person who failed to deduct/ collect/deposit VAT at
source along with 2% interest per month.

VAT registered entities are required to comply with the
following provisions of VAT laws:
declaration of price to impose VAT before supply of goods
declaration of annual turnover in case of turnover tax
declaration regarding factory place, plant, capital machinery,
fittings, etc.
declaration regarding raw materials stored by the VAT
registered entity
notifying the VAT authority regarding any changes of
address
notifying the VAT authority regarding new bank account.

A monetary penalty may be imposed if the business entity:
fails to apply for registration under VAT laws
fails to inform the VAT authority about any change of
information related to registration
fails to maintain information in ECR and computer
evades or attempts to evade VAT through exclusion
of purchase information in purchase accounts book
(MUSHAK-16)
evades or attempts to evade VAT through submission of
forged or false documents to VAT authority
does not keep proper records in accordance with this law;
destroys, alters or mutilates the records; or makes false
records
makes a consciously false statement or declaration
obstructs or prevents the access of a tax officer to inspect or
seize the records, books or other documents in relation to
VAT
involves in a transaction of or acquires goods even though it
is known that tax has been evaded thereon
takes a credit of input-tax through forged or fake invoice
evades or attempts to evade VAT or Supplementary Duty
(SD) by any other means
issues a challan stating therein the amount of VAT even
without being a registered person.

claimed if they are not registered in Bangladesh?
No. This is not permitted according to VAT laws of
Bangladesh.
Bangladesh

In the case of rendering of service or export of service, the
registered person shall prepare three copies of a challan in the
form specified by VAT laws (Form Mushak-11) using twosided carbon. The main copy will be given to the purchaser
of service or receiver. The second copy will have to reach the
local VAT office within five working days of the rendering
of service. The third copy will be preserved in the place of
rendering of service for a period of at least six years (attached
with the challan register).
An electronic challan can be issued by any person/company
subject to obtaining prior approval from VAT authority.
The contents of VAT invoice are as follows:
a serial number
sellers name and address
sellers VAT registration number
invoice issuing date
destination of goods
purchasers name and address
purchasers VAT registration number
description of goods or services
quantity of goods
base value of SD
amount of SD
base value of VAT
amount of VAT
total value including VAT and SD.
Electronic Cash Register (ECR) generated invoice must contain
the following information:
name, address and VAT registration number of the entity
serial number, date and time of issuance
description, quantity and value of goods and amount of
VAT
serial number of ECR machine.
For further information on indirect tax in Bangladesh please contact:
Lutful Hadee
T +88 (0) 2 988 3863
E hadee@howladaryunus.com
Cambodia

Zero-rated for exported goods and services.

these rates?
No.
Value Added Tax (VAT) is the principal indirect tax in the Cambodia. It is a tax on consumer expenditure,
Yes. It relates to the annual turnover of taxable transactions in the Cambodia, and once the limit has (or
will be) reached, it is necessary to register.

Not applicable.

Not applicable.
Returns have to be submitted on a monthly basis on the 20th of the following month.

Yes. If a VAT return, or the corresponding payment thereof, is submitted late or underpaid, a penalty can
be imposed. Penalties comprise of a surcharge of 10%, 25% or 40% of the basic tax and interest of 2% a
month.
Yes. A VAT return needs to be completed along with a report of the purchases and sales transactions for
the month, accompanied by a copy of the sales invoices that the company issued and invoices received
during the month.
Cambodia

No. Overseas business can only claim the VAT incurred in the country if they comply with registration
requirements.
Deduction of VAT
VAT incurred in Cambodia and during the current month can be deducted, except for VAT from:
the entertainment, recreation, amusement expenses unless the taxable person carries on a business
as a provider of those activities above
mobile phone expenses
the purchases or imports of automobiles unless the taxable person carries on a business of dealing in
or hiring such automobiles
the purchase of certain petroleum products unless the taxable person carries on a business as a
supplier of such petroleum products.

the Cambodia.
ie the sale.
Taxable supply:
Supply of goods or services by the taxable person in the

Kingdom of Cambodia
Appropriation of goods for his or her own use by the
taxable person
Making of a gift to or supply at a below cost of goods or
services by the taxable person
Import of goods into the territory of the Kingdom of
Cambodia.
Non-taxable supply:
Public postal service

Hospital, clinic, medical, and dental services and the sale of
medical and dental goods incidental to the performance of
such services
The service of transportation of passengers by a wholly
state owned by public transportation system
Insurance services
Primary financial services
The importation of articles for personal use that are exempt
from customs duties
Non profit activities in the public interest that have been
recognized by the Ministry of Economy and Finance.
Taxable value:
The taxable value shall be determined as follows:

The taxable value for any supply shall be the price of the
goods or services the seller charged the purchaser. The
taxable value includes any charges for transportation and
other items payable to the seller with respect to the supply,
including any specific tax on certain merchandise and
services but excluding the tax on value added. Procedures
for the adjustment of the taxable value at the time of supply
and after the time of supply shall be determined by subdecree.
When the payment for a taxable supply involves any
consideration other than money for the direct or indirect
benefit of the seller, this consideration shall be included in
the taxable value at its fair market value.
The taxable value for any imported good shall be the
customs value including insurance and freight plus any
customs duties and any specific tax on certain merchandise
and services. If there is no such adjusted customs value, the
fair market value shall be used.

If the taxable value of the goods or services supplied does
not represent the true value, the tax administration may
determine a value for such goods or services and such value
shall be presumed to be the correct value until proven
otherwise to the satisfaction of the tax administration.
The taxable value of used goods that the taxable person
regularly purchases from consumers for resale or sells on
behalf of other persons shall be the differential between the
selling price and the purchase price, or the commission from
the sale of those goods.
Cambodia
VAT rate:
services in the Cambodia:
A standard rate of 10% on the taxable value of each taxable
supply of goods and services in the Kingdom of Cambodia
0% on the taxable value of each taxable supply of goods
exported from the Kingdom of Cambodia and of the
taxable supply of a service rendered outside of the Kingdom
of Cambodia.
Time of supply:
The time of supply shall be determined as follows:

The tax on value added becomes due and payable at the time
of supply.
The time of supply of goods and services shall be the time
by which the seller must issue the invoice or the time the
seller issues the invoice if that invoice is issued before the
time it must be issued by the seller.
A value added tax invoice must be issued within seven days
after the goods are shipped or services rendered or after
payment if payment occurs before the goods are shipped or
services rendered. If a shipment is not accompanied by an
invoice, there shall be attached a shipping document which
has been properly recorded in the shipping journal.
For the supply of goods or services which are made
continuously or which involve multiple payments, the time
of supply shall be determined by prakas of the Ministry of
Economy and Finance.
In the case of the import of goods, the time of supply shall
be the time the importer files a declaration to the customs
administration according to the regulations in force.
Location of supply:
Goods are imported into the Kingdom of Cambodia if they

are brought within the customs territory of the Kingdom of
Cambodia.
In addition, some goods and services are exempted from the
tax, especially for agriculture products, Qualified Investment
Project (QIP) company, and goods and services sold to royal
governments.
All goods imported into the Cambodia are subject to VAT,
except for agriculture products, goods imported for personal
using that exempted from custom duty tax, goods imported by
embassy or ambassador for using in embassy, NGO, . The tax
will have to be paid by the importer at the time of importation.
Where the importation is for business purposes and the
importer is registered for VAT, it may be possible to reclaim
the tax.
and Customs duty. Customs duty is levied at the place where
goods are imported into the community. It is levied in order
to bring the cost of goods produced outside Cambodia up to
the same level as those produced within it. Once duty (and
VAT) has been paid by the importer, the goods are in free
circulation and they can then be released for use in the home
market. Unlike other indirect taxes, such as VAT, once duty
has been paid it is not usually recoverable by the importer.
It therefore represents a bottom line cost to the importing
business if it cannot be passed on in higher prices. It is therefore
very important to ensure that the correct rate of duty is applied.
VAT is charged on the value of the importation, including any
custom duty.
The location of supply shall be determined as follows:

The supply of a good takes place in the Kingdom of
Cambodia if the good is delivered in the Kingdom of
Cambodia, whether that delivery takes on the characteristic
of a transfer of the right to use or to dispose. In the case
where the supply must include transportation, the supply
takes place in the Kingdom of Cambodia if the good is in
the Kingdom of Cambodia when the transportation starts.
The supply of a service takes place in the Kingdom of
Cambodia if the service is performed in the Kingdom of
Cambodia, except that:
the supply of a service in connection with immovable
property is deemed to take place where the property is
located
the supply of a service in connection with transport is
deemed to take place where the transport occurs.
Cambodia

A person or company who either makes or intends to
make taxable supplies of goods or services in the course or
furtherance of a business must register for VAT (real regime
taxpayer) if the value of its taxable supplies in the Cambodia
exceeds the annual registration limit, or is expected to exceed
the limit in the near future. A business can register on a
voluntary basis even if the registration limit has not been
exceeded.
the natures of some of those activities are very different.
Any person conducting a business enterprise or intending
to conduct a business enterprise may apply to be registered
for VAT. However all corporations, importers, exporters and
investment enterprises must register for VAT from the date
they commence business. All other taxpayers must register
for VAT if their taxable turnover in respect of goods exceeds
125 million Khmer Riels or their taxable turnover in respect
of services exceeds 60 million Khmer Riels for the preceding
three consecutive calendar months or is likely to exceed this
level in the future three months. In addition the taxpayers with
government contracts which will produce taxable turnover
exceeding 30 million Khmer Riels must register for VAT.
Taxable turnover is the gross income of a business excluding
VAT and excluding income from non-taxable supplies as
defined in Article 57 of the Law on Taxation.
The term any person for purposes of VAT registration
includes:
sole proprietor
partnership
private company
public company
joint venture
pass through
club or association.
A business enterprise: This refers to any business of whatever
nature and it includes examples such as:
a) ordinary business, eg shops, contractors, manufacturers,
wholesalers, services providers etc.
b) trades and professions, eg architects, engineers, accountants,
lawyers etc.
c) activities of non-profit making bodies, eg societies,
associations, sporting clubs etc.

Not applicable.

in your country?
There is no legislation recently.

Not applicable.

Every month, the company must file a VAT return form. The
period covered by the return is called a tax period.
You have to fill in details of the supplies you have made
and received in that period and pay the total tax you owe to
the General Department of Taxation or claim a repayment or a
credit if tax is owed to you.
The VAT return and VAT payment must reach the
department of large taxpayer by 20th day of the following
month.
There are penalties for late filing of the return and for late
payment or failure to pay the tax.

The other two rates for the penalty:
negligent: additional tax shall be 10% of the amount of the
late paid tax plus 2% interest on that tax amount for each
month or part of a month that its not paid.
seriously negligent: additional tax shall be 25% of the
amount of the late paid tax plus 2% interest on that tax
amount for each month or part of a month that its not paid.
Cambodia
Yes. The company has to prepare the report of purchases and

sales that were incurred during the month and submit to tax
authority with the VAT return by attaching with the invoices
that company had issued and received.
A VAT invoice must show (for VAT registered customers):

the invoice date
the customers VAT registration number
the quantity, selling price of the goods or services
the total taxable amount excluding VAT
the total amount including VAT
the date of supply of the goods or services if different from
the date of issue of the invoice.

Yes, the penalty and interest shall be imposed for an underpaid
or unpaid of tax amount:
negligent: additional tax shall be 10% of the amount of
the underpaid or unpaid tax plus 2% interest on that tax
amount for each month or part of a month that its not paid.
seriously negligent: additional tax shall be 25% of the
amount of the underpaid or unpaid tax plus 2% interest on
that tax amount for each month or part of a month that its
not paid.
unilateral tax assessment: additional tax shall be 40% of the
amount of the underpaid or unpaid tax plus 2% interest on
that tax amount for each month or part of a month that its
not paid.
Aside from the tax penalty, there is an administrative penalty
shall be imposed for the obstruction of the implementation of
the tax provision, the additional tax shall be:
two million Khmer Riels (2,000,000 Khmer Riels) for a
taxpayer or a withholding agent under the real regime
taxpayer system or a government official,
five hundred thousand Khmer Riels (500,000 Khmer Riels)
for a taxpayer or a withholding agent under the estimated
regime taxpayer system.

claimed if they are not registered in Cambodia?
No, they cannot claim the VAT that incurred in overseas. They
can only claim the VAT that incurred in the country if they are
registered locally.
For non-VAT registered customers, the following must be

shown:
the invoice date
the quantity, selling price of the goods or services
the total taxable amount including VAT
the date of supply of the goods or services if different from
the date of issue of the invoice.
VAT invoices can be issued, received and stored in hard copy
and need to be declared to the tax authority every month.
For further information on indirect tax in Cambodia, please contact:
Ronald C. Almera
T +855 23 966 523
E ronald.almera@kh.gt.com
Veasna Leng
T +855 23 966 520
E veasna.leng@kh.gt.com
Cambodia
China
On 23 March 2016, the Ministry of Finance and State Administration of Taxation jointly issued Notice of
Taxation on Full Launch of the Pilot Scheme on Levying Value-added Tax in Place of Business Tax, CaiShui
[2016] No. 36(Circular36) which indicates that the transformation of Business Tax to VAT(B2V Reform)
will be further rolled out to cover all sectors in China. With effect from 1 May 2016, VAT rates shall be as
follows:
Sale of goods, providing processing, repair and replacement labour activities, leasing of tangible
(movable) property or import goods, VAT rate of 17%
Sale or import certain goods (eg agricultural products, edible vegetable oils, tap water, heating,
water heating, air-conditioning, coal gas, books, newspapers, publications etc.)
Transportation, postal services, basic telecom services, construction services, leasing and/or sale of
real estate, transfer of land-use right, VAT rate of 11%
Financial service, value-added telecom service, modern service (eg R&D and technical service,
information technology service, cultural creativity service, logistics ancillary service, assurance and
consulting, radio, film and television programs, business support service, other modern service),
lifestyle service (culture and sports service, education and medical care service, tourism and
entertainment service, catering and accommodation service, residents daily service, other lifestyle
service),VAT rate of 6%
Exportation of goods (excluding goods prohibited or without permissions), international transportation
service, space transportation service, service provided to overseas entities and fully consumed
outside of China (eg R&D service, energy management contract service, design service, production
and distribution of radio, film, and television programs, software service, circuit design and testing
service, information system service, business process management service, offshore outsourcing
service, technology transfer), VAT rate of 0%.
Not all input VAT paid is deductible or refundable in the determination of the amount of VAT payable. For
small-scale taxpayers are chargeable to VAT at the rate of 3%.

these rates?
The above tax rates are the latest pursuant to Circular36.
Value Added Tax (VAT) and Business Tax (BT) are the two major types of indirect tax. The peoples republic
of China is currently in the transition of B2V Reform. Pursuant to Circular36, VAT will be applicable to all
sectors from 1 May 2016.
VAT payable = output VAT Input VAT during the period
Output VAT = turnover x tax rate
China
Yes, China has legal regime of tax registration that requires taxpayer to register its business activity in
related tax authorities for tax management purpose.

No, generally only organisations legally established within Chinas territory will be required to register in
competent tax authority, non-resident enterprises are not required to declare its tax status.

No.
Most businesses are required to submit VAT returns on monthly basis in practice.

Yes. If a VAT return, or the corresponding payment, is submitted late a penalty may be imposed.

Taxpayers that have not complied with tax filing rules such as delay of submission of tax returns may
receive a fine of RMB2000 Yuan to EMB10000 Yuan, while a delay of tax payment may be subject to a tax
overdue charge at the rate of 0.05% per day.
Yes, special tax declarations will be required if taxpayer operate in non-registered area within China.
Yes, penalties range from 50% to 500% may be imposed where a taxpayer is identified as with deliberate
intension of tax evasion.

Not applicable.
Deduction of VAT
Input VAT paid on the following items shall not be claimed for deduction:
tax payable computed in simple tax computation method (ie tax on gross income), such as small-scale
taxpayers, general VAT taxpayers who sell real estate project obtained before 30 April 2016, etc.
items exempted from VAT
items purchased for employment benefit and individual consumption
losses of goods, real estate and the relevant services that qualify for identification of abnormal losses
in accordance with the relevant rules and regulations
passenger transportation services, loan services, F&B services, residents daily service, entertainment
services.

Pursuant to Circular 36, VAT will be applicable to all sectors
from the effective date 1 May 2016, we will mainly introduce
VAT in the following. As a principle point of view, VAT is
a type of tax levied on added value in multiple segments of
commodity production, commodity circulation and all services.
The VAT payable shall be computed on indirect basis (ie
VAT deduction basis), normally output VAT would be charged
for sales activities and/or certain services pursuit to regulations
with respect to VAT reform, and input VAT occurs on purchases
of goods(inclusive VAT paid on importation) and/or receiving
certain services. The balance of output VAT and input VAT (ie
output VAT minus input VAT) shall be VAT payable to Chinese
tax authority. A negative balance could be carried forward to the
next tax period for deduction without restriction of time.
VAT taxpayers are classified into VAT general taxpayer

and VAT small-scale taxpayer based on their business size and
soundness of financial accounting. The standard VAT tax rate
is 17% that applies to VAT general taxpayer engaging in sale
of goods, providing processing, repair and replacement labour
activities, leasing of tangible and movable property or import
goods, in addition to circumstances that apply to low tax rate in
line with related tax regulation. Multilevel tax rates on various
of activities for VAT general taxpayer include the followings:
sale of goods, provision of processing, repair and
replacement labor activities, leasing of tangible movable
property and import goods, VAT rate of 17%
sale or import certain goods (eg agricultural products,
edible vegetable oils, tap water, heating, water heating, airconditioning, coal gas, books, newspapers, publications
etc.), VAT rate of 13%
transportation, postal service, basic telecom service,
construction service, leasing and/or sale of real estate,
transfer of land-use right, VAT rate of 11%
China
f inancial service, value-added telecom service, modern service

(e.g. R&D and technical service, information technology
service, cultural creativity service, logistics ancillary service,
assurance and consulting, radio, film and television programs,
business support service, other modern service), lifestyle
service (culture and sports service, education and medical
care service, tourism and entertainment service, catering and
accommodation service, residents daily service, other lifestyle
service), VAT rate of 6%
exportation of goods (excluding goods prohibited or
without permissions), international transportation
service, space transportation service, service provided to
overseas entities and fully consumed outside of China
(e.g. R&D service, energy management contract service,
design service, production and distribution of radio, film,
and television programs, software service, circuit design
and testing service, information system service, business
process management service, offshore outsourcing service,
technology transfer), VAT rate of 0%.
Industrial and commercial taxpayers whose annual sales
respectively are not in excess of RMB500,000 Yuan and
RMB800,000 Yuan, and amount of annual sales of taxable
services are not in excess of RMB5Million Yuan, could be
identified as a small-scale taxpayer and subject to tax rate of
3%. Small-scale taxpayers could be registered as VAT general
taxpayer on a voluntary basis in spite of the annual sales not
meeting the threshold.
In principle, in addition to taxable items a VAT rate of
0% applies to any purchase of goods and/or receiving services
that would not and/or could not be applied to taxable items
on which would generate output VAT (eg VAT exemption),
therein the input VAT cannot be claimed for deduction.
Pursuit to Provisional Regulations of Peoples Republic
of China (PRC) on VAT, Article 10 (with unofficial English
translation), we listed the below short list of what could not be
deducted for your reference:
Provisional Regulations of the Peoples Republic of China

on Value-added Tax
Article 10, the input tax amount of the following items shall
not be allowed for offsetting against the output tax amount:
1) Procured goods or taxable services for use in non-valueadded tax taxable items, value-added tax-exempted items,
collective welfare or personal consumption.
2) Procured goods and the relevant taxable labour services
which are subject to abnormal losses.
3) Procured goods or taxable services consumed by workin-progress and finished products which are subject to
abnormal losses.
4) Self-consumption consumables of taxpayers stipulated by
the finance and tax authorities of the State Council.
5) Transportation fees for goods stipulated in item (1) to item
(4) of this Article and transportation fees incurred for sale of
tax-exempted goods.

China has legal regime of tax registration that requires taxpayers
to register its business activity in related tax authorities for
tax management purposes. A taxpayers withholding agent
shall perform registration in an official written form to the
competent tax authority when an organisation is newly formed
or before a business is formally shut down, and when change
occurs during an operation period within a statutory time limit.
The competent tax authority would determine and elect the
type of applicable tax on which should be imposed based on the
description of taxpayers registered business scope during the
process of tax registration.
The implementation of VAT regime relies on a formal VAT
invoice (including VAT invoice and VAT special invoice) issued
by Chinese tax authority. As aforementioned, VAT taxpayers
are classified into VAT general taxpayer and VAT small-scale
taxpayer in China, a VAT general taxpayer is required to use a
VAT special invoice through VAT the anti-forgery tax control
system for the purpose of purchase, issuance, cancellation and
verification of printed copies of VAT special invoices and the
corresponding electronic data.
In China, each organisation should be registered as an
independent taxpayer, consolidated VAT tax filing occurs
under very rare circumstances.
China


Generally only organisations legally established within Chinas

territory will be required to register in the competent tax
authority, non-resident enterprises are not required to declare
its tax status. If any taxable activities are performed by a nonresident enterprise in China, a withholding agent or related
party in the transaction should withhold tax on behalf of nonresident enterprises in accordance with relevant regulations.
Taxpayers not complying with tax filing rules such as a delay

of tax return submissions may receive a fine of RMB2000 Yuan
to EMB10000 Yuan. While the delay of tax payment may be
subject to a tax overdue charge at the rate of 0.05% per day,
pursuit to the Law of Administration of Tax Collection, Article
62 and Article 32.
Listed below is the provision of Article 62 and Article 32
with unofficial English translation for reference:
Law of Administration of Tax Collection
Article 62, where, within the specified time limit, a taxpayer
fails to go through the formalities for tax declaration and submit
information on tax payment or a withholding agent fails to
submit to the taxation authorities statements on taxes withheld
and remitted, or collected and remitted and other relevant
documents, the taxpayer or withholding agent shall be ordered
by the taxation authorities to rectify within the specified time
and may be fined not more than 2,000 yuan; if the offenses are
serious, the taxpayer or withholding agent may be fined not less
than 2,000 yuan but not more than 10,000 yuan.
Article 32, where a taxpayer fails to pay taxes or a
withholding agent fails to remit tax payments within the
specified time limit, the taxation authorities shall, in addition
to ordering the taxpayer or withholding agent to pay or remit
the tax within the specified time limit, impose a penalty for late
payment on a daily basis at the rate of 0.05% of the amount of
tax in arrears, from the date the tax payment is defaulted.

in your country?
Not applicable. There is no specific legislation that applies to
non-resident supplies of electronically supplied/digital services
from a China tax perspective.

No, it is not required that non-established business needs to
appoint a fiscal representative in order to register. Nevertheless,
a withholding agent will be needed for withholding tax purpose
if any taxable activity occurs pursuit to Provisional Regulations
of Peoples Republic of China (PRC) on VAT, Article 18.
Listed below, the provision of Article 18 with unofficial
English translation for reference:
Provisional Regulations of the Peoples Republic of China on
Value-added Tax
Article 18, where overseas organisations or individuals engaging
in provision of taxable services in the Peoples Republic of China
do not have a business establishment in the Peoples Republic of
China, their agent in the Peoples Republic of China shall act as
the withholding agent; where there is no agent in the Peoples
Republic of China, the buyer shall act as the withholding agent.

A newly formed company is required to start to file VAT tax
returns to its competent tax authority in the month following
the official tax registration. VAT returns normally cover an
accounting period of one month from the first day to the end
of the last day of a calendar month. Taxpayers should submit
monthly VAT tax returns and make tax payments due within
15 days of the following calendar month.

Yes, special tax declarations will be required if a taxpayer
operates in non-registered area.
Chinese resident enterprises that perform business activities
beyond the scope of the registered area would be required
to obtain a special certification issued by the competent tax
authority.
For example: A company registered in Beijing city needs
to sell goods in Nanjing city, the company should obtain the
special outside operation certification issued by the Beijing
competent tax authority and submit this certification to the
tax authority of Nanjing city, otherwise the company will be
subject to tax filing obligation in Nanjing city.
China
Yes, penalties range from 50% to 500% may be imposed where

a taxpayer is identified as deliberately evading tax pursuit to the
Law of Administration of Tax Collection, Article 63.
Listed below is the provision of Article 63 with unofficial
English translation for reference:
Law of Administration of Tax Collection
Article 63, where a taxpayer evades tax, the taxation
authorities shall recover the payment of the amount of tax the
taxpayer fails to pay or underpays and the penalties for late
payment, and the taxpayer shall also be fined not less than 50
percent but not more than five times the amount of tax the
taxpayer fails to pay or underpays; if a crime is constituted, the
taxpayer shall be investigated for criminal liability in accordance
with law.
A VAT invoice must show the following:

an invoice number, which is unique and sequential
invoice date
buyers name, tax identification number, address and phone,
name of bank and bank account number
security code (password)
sellers name, tax identification number, address and phone,
name of bank and bank account number
name of payee, reviewer, drawer and the seal of the seller.

claimed if they are not registered in China?
Not applicable.
The concept of VAT in China applies to domestic
organisations. Under most circumstances, a normal VAT
refund occurs when a China resident enterprise exports goods
or certain services to overseas customers. A China resident
can declare a refund or exemption of VAT and consumption
tax paid in the multiple segments of commodity production,
commodity circulation, ie exportation of goods applies to VAT
rate of 0% and exempt from consumption tax.

followings must be shown:
name of goods or services supplied to the customer
specification models
unit, quantity, unit price and total amount, excluding VAT
rate of VAT that applies to whats being sold
amount of tax to be paid
total amount payable, including VAT.
The VAT invoice for a VAT small-scale taxpayer is similar to
a VAT special invoice which applies to VAT general taxpayer
except for number of copies. There is one more copy namely a
deduction form in a VAT special invoice for the input VAT
deduction purpose of comparing with the VAT invoice.
For further information on indirect tax in the Peoples Republic of China please
contact:
Julie Zhang
T +86 10 85665777
E julie.zhang@cn.gt.com
China
Hong Kong
Hong Kong does not currently levy any VAT, GST or sales tax.
For further information on doing business in Hong Kong please contact:
William Chan
T +852 3987 1399
E william.chan@cn.gt.com
Hong Kong
India
India has a dual taxation structure, which results in the levy of multiple indirect taxes by the central and
state government(s). The rate of principal indirect taxes are as follows:
Customs duty effective rate of approximately 29.44%
Central excise duty: 12.5%
Service tax: effective rate is 14.5% (including Swachh Bharat Cess of 0.5%). Proposed to be 15%
with effect from 1 June 2016 after levy of Krishi Kalyan Cess @ 0.5%
Value Added Tax (VAT)/Central Sales Tax (CST): Varies from state to state and also the goods sold.
Typically, the rate varies from 1% to 15%.

these rates?
Yes, it is anticipated that Goods and Service Tax (GST) would be implemented in India soon. The rate of
GST has not been declared by the government as yet.
Principal Indirect tax applicable are as follows:

Union levy by the central government:
customs duty: on import of goods into India
central excise: on manufacture of goods in India
service tax: on the provision of services.
State based levies by the respective state governments:
VAT: state-based tax on intra-state sales of goods
CST: central tax on inter-state sales of goods, administered and controlled by the appropriate state(s).
Other key indirect taxes:
R&D cess: central cess on import of technology to India
entry tax/Octroi: state-based tax on the entry of goods into a state/ municipality for use, consumption
or sale therein
professional tax: state-based tax leviable on professions, trades, callings and employments
luxury tax: state-based tax on specified luxuries and certain facilities, services, enjoyment, utilities, etc.
property tax: leviable by a government on a persons real or personal property
entertainment tax: state-based levy on entertainment activities
anti-dumping duty: central levy to rectify the trade distortive effect of dumping by other countries at a
price lower than its normal value.
India
Yes. The registration limit is typically based on the goods/ services and the turnover of the assesse.

No. Refer comments below

In case the non-established business is liable to obtain registration, the non-established business would
require a representative to obtain registration.
The periodicity of returns differ based on the indirect tax law. Refer comments below.

Yes. The penalty as prescribed in the indirect tax law is levied for delay in filing the returns or discharging
the liability.
There are prescribed declarations in the indirect tax laws to be included on the invoices, documents, etc.
for levy of tax/ availment of exemptions.
Yes. A range of penalties can be imposed for contravention of respective laws.

No. cross border credit is not directly feasible to be availed.
Deduction of VAT
Various indirect tax laws have separate valuation rules determining the deduction to be allowed subject to
prescribed conditions.

India has a dual taxation structure, which results in the levy of
multiple indirect taxes by the central and state government(s).
Key indirect taxes applicable are as follows:
Customs duty
Customs duty, a central government levy, is leviable on import/

export of goods to and from India.
India follows the Harmonised System of Nomenclature
(HSN) classification rules and the goods are classified under
different chapter/tariff headings (based on eight digit coding)
primarily according to their description, components and use.
Presently, the effective standard rate of customs duty that is
applicable on the import of goods is approximately 29.44%,
subject to exemption/ concessions as may be available/ notified
from time to time and free trade agreements entered into by
India with other countries. However, presently there is no
export duty leviable on goods exported from India, except in
public interest as notified.
Central excise duty
Central excise duty, a central government levy, is leviable on the

manufacture/ deemed manufacture of excisable goods in India.
India follows the HSN classification rules, and the goods
are classified under different chapter/tariff headings primarily
according to their description, components and use. The
standard rate of excise duty is 12.5%, subject to exemption/
concessions as may be available/ notified from time to time.
Generally, excise duty is exempted on export of goods from
India or supplies to SEZs/ EOU, etc. (deemed exports).
Service tax
Service tax, a central government tax, is leviable on provision of

services.
India follows a negative list regime wherein all services,
except those specifically notified to be exempted, are taxable.
Presently, the standard rate of service tax is 14% and Swachh
Bharat Cess of 0.5% is applicable on the taxable value of
services provided subject to exemption/concessions, as may be
notified from time to time. Also, Krishi Kalyan cess is proposed
to be levied at the rate of 0.5% on the taxable value of services
with effect from 1 June 2016. Accordingly, the effective rate of
service tax with effect from 1 June 2016 would be 15%.
Typically, a service provider in India is liable to discharge
service tax. A service recipient in India liable to pay the service
tax in terms of cross border receipt of services and certain
domestic services also.
Value Added Tax (VAT)/Central Sales Tax (CST)
VAT is levied on intra-state sale of goods and is collected by the

respective state government.
CST is levied on inter-state sale of goods and is collected by
the State from where the movement of goods, which are meant
for sale, commences.
Every State has its own VAT legislation and independent
tariff for fixing the rate of goods for intra-state/inter-state sale
of goods. The rate of local VAT depends on the description of
the goods, the rate of tax mentioned in the applicable state VAT
tax legislation and various VAT tax concessions/exemptions as
may be available in such state.
India
Goods and Service Tax (GST):
The Indian Government has proposed that the indirect tax

regime in India be replaced with a comprehensive dual GST,
to be levied concurrently by the centre (CGST) and the states
(SGST). Integrated GST (IGST) is also proposed to be levied,
which will replace CST. It aims to tax both goods and services
traversing between states. The following key taxes are proposed
to be included in GST.
Central level
State level
Additional customs duties (CVD and SAD)

Central excise duty
Service tax
Special excise duty
(on medical and toiletries preparation)
Various auxiliary cesses and levies
(such as R&D cess)
State VAT
Central sales tax
Entry tax
Luxury tax
Entertainment tax
Taxes on lotteries and gambling

The registration limit for the principal indirect taxes as stated
above are as follows:
Customs duty:
Every dealer importing/ exporting goods to/from India is

required to obtain an import export code.
Central excise duty:
Every manufacturer of excisable goods (on which excise

duty is leviable), except the following, are required to obtain
registration:
person engaged in manufacture of goods liable to NIL
rate/ exempted from duty subject to terms and conditions
specified
person exempt from excise duty based on the threshold
limit of clearances made in a financial year.
Service tax:
Every person providing taxable services is liable to registration

in case the turnover during a financial year exceeds Rs. 9 lakhs.
However, the service tax registration is mandatory in case
where an assessee is liable to discharge service tax as a recipient
of service (for certain notified services). An assessee may obtain
voluntary registration in case the turnover has not exceeded Rs.
9 lakhs.

Customs duty:
The non-established business importing/ exporting goods from

India would be liable to obtain an import export code
In case the non-established business manufactures any

products/ goods in India, the said non-established business
would be required to obtain registration.
Service tax:
A non-established business (i.e. an entity not having a business

establishment or a fixed establishment in India) is not required
to obtain registration in India. The service recipient is liable to
discharge service tax in case the place of provision of service
(determined in accordance with the Place of Provision of
Service Rules, 2012) is in India.
VAT/CST:
A non-established business would be liable for VAT / CST

registration in a state, in case such non-established business
effects any sale/ purchase (above a specified threshold limit)
from the said state.

No, there is no specific tax legislation to levy tax on nonresident supplies of electronically supplied/digital services to
private consumers resident in India.
However, under the service tax laws, the service recipient is
liable to discharge service tax under reverse charge mechanism
for the receipt of electronically supplied/ digital services in case
the place of provision of service (determined in accordance with
the Place of Provision of Service Rules, 2012) is India.
Also, it is relevant to note that, an importer would be liable
to discharge import duty (at the rate specified in the customs
tariff) on the import of goods in India, if any.
Further, it would be relevant to analyse other non-tax
legislation/ regulations for supply of electronic/ digital services
to private consumers in India.
VAT/CST:
The threshold limit for VAT/CST registration for each state is

specified in the state specific VAT law. An assesse may obtain
voluntary registration in case the turnover has not exceeded the
specified limit.
India

In case the non-established business is liable to obtain
registration (refer to comments for question 3), the nonestablished business would require a representative to obtain
registration.

The periodicity for filing returns for the principal indirect taxes
is as follows:
Customs duty:
The master/agent of the vessel or an aircraft is required to

provide an import manifest (an import report in case of a
vehicle), within 24 hours after arrival in the case of a vessel and
12 hours after arrival in the case of an aircraft or a vehicle in the
prescribed form.
After the unloading of the goods, an importer has an option
to clear the goods for home consumption after payment of
the duties leviable or to clear them for warehousing without
immediate discharge of the duties Every importer is required to
file a bill of entry for home consumption or warehousing in the
form, as prescribed.
Under the Electronic Data Interchange (EDI) system, an
importer is not required to file a formal bill of entry as the same
is generated in the computer system. However, the importer
is required to file a cargo declaration with the prescribed
particulars.
Central excise duty payment

Category of assesse Periodicity
SSI Units
Quarterly- April to December

(i.e. first 3 quarters)

Quarterly- January to March

(i.e. last quarter)
Non- SSI unit
Monthly April-February

Monthly- March
Due date
6th day of the
subsequent quarter
31 March
6th day of the
subsequent month
31 March
Service tax:
Service tax returns
Periodicity
April-September
October- March
Annual return
Due date
25 October
25 April
30 November
Service tax payments

Periodicity
Monthly April-February
Monthly March
Due date
6th day of the subsequent month
31 March
An individual, partnership firm and a Hindu Undivided Family

can make the payment of service tax quarterly. Also, a one
person company whose aggregate value of services provided
is up to 50 lakhs can avail the benefit of quarterly payment of
service tax.
VAT/CST:
The periodicity of filing returns varies from state to state and is

determined based on the turnover of the dealer in a particular
state. The due dates range from the 15th day of the subsequent
month to 31st day of the subsequent month.

Central excise returns
Return Category of assesse
ER-1 All Assessees (Non SSI)
Periodicity Due date
Monthly 10th day of

succeeding month
ER-2
EOUs
Monthly 10th day of
succeeding month
ER-3
Small Scale Industries (SSI)*
Quarterly 10th day of

Units
succeeding quarter
ER-4 Annual Financial Statement for
Annually
30 November of the

units paying more than one crore
succeeding year

duty (CENVAT + PLA) stating the

details of the annual financial
ER-5
Return with details of input-output Annually
30 April of current

ration for units paying more than
year

one crore duty (CENVAT + PLA)

stating the details of
ER-6
Return with details of principal
Monthly
10th day of the

inputs for units paying more than
succeeding month

one crore duty (CENVAT + PLA)
ER-7
All assesses
Annually 30 April of the
previous year.
* SSI having a turnover of less than Rs. 4 crores in previous year.

Customs duty:
The customs authorities provide the bill of entry with the

details of the import duty payable. In case the importer fails to
discharge the payment within five working days from the date
on which the bill of entry for home consumption is returned
for payment of duty, the said importer would be liable to an
interest of 15% per annum.
The manufacturer is liable to a late fees of Rs 100 per day

subject to a maximum of Rs 20,000 for delay in filing the excise
returns.
The rate of interest payable for delay in the payment of duty
is 15% per annum. Further, an assessee would also be liable to a
penalty of 1% per month for each month or part of the month
in case the assesse fails to pay the duty declared in the returns
within one month from the due date.
India
Service tax:
The late submission of returns is liable for late filing fees up to

Rs 20,000 (depending upon the delay in the returns). The late
filing fees are as follows:
Period of delay
Late fee (in INR)
for delay up to 15 days

INR 500
for delay beyond 15 days but up to INR 1,000
30 days
for delay beyond 30 days INR 1,000 + INR 100 per day (from
the 31st day subject to a maximum
amount of Rs 20,000)
The late payment of service tax is liable to interest at the rate of

15% per annum. However, in case service tax is collected but
not deposited, the interest rate is to be 24% per annum.
VAT/CST:
The interest/penalty applicable for late filing of returns and late

payment of VAT/CST liability due varies from state to state.

There are prescribed declarations in the principal indirect tax
laws to be included on the invoices, documents, etc. for levy of
tax/ availment of exemptions.

Yes. A range of penalties can be imposed where assessees fail to
comply with the provisions of the principal indirect tax laws.
Typically, penalties may be levied in case of non-filing of
periodic returns, failure to maintain proper books of accounts
and records, etc.
Further, criminal proceedings (prosecution) are typically
initiated under certain specified provisions of law.

claimed if they are not registered in India?
No, the indirect taxes incurred by overseas businesses cannot
be claimed if they are not registered in India. The refunds
under the principal indirect tax laws are subject to terms and
conditions specified in the said indirect tax law.

Customs duty:
Not applicable, as the importer typically accept the commercial

invoice issued by the seller along with the packing list.
Triplicate serially numbered invoices containing the following

details shall be issued by the manufacturer:
registration number of the manufacturer
address of the concerned Central Excise Division
name of the consignee
description and classification of the goods
time and date of removal, mode of transport and vehicle
registration number
rate of duty, quantity and value, of goods
the duty payable thereon
signature or digital signature of the manufacturer.
The triplicate invoices shall be marked with the following
details:
the original copy being marked as ORIGINAL FOR
BUYER
the duplicate copy being marked as DUPLICATE FOR
TRANSPORTER
the triplicate copy being marked as TRIPLICATE FOR
ASSESSEE.
Service tax:
A person providing taxable services shall issue a serially

numbered invoice containing the following:
name, address and registration number of the service
provider
name and address of the service receiver
description and value of taxable service provided or agreed
to be provided
service tax payable thereon
signature or digital signature of the service provider or an
authorised person.
VAT/CST:
The details required on an invoice vary from state to state.

For further information on indirect tax in India please contact:
Amit Kumar Sarkar
T +91 22 66262750
E amit.sarkar@in.gt.com
Raman N.V.
T +91 080 42430702
E raman.nv@in.gt.com
India
Indonesia
What are the current rate(s) of Value Added Tax
(VAT)?
The general VAT rate is 10%.

The VAT rate of 0% (zero per cent) is applied to the following particular taxable events:

export of taxable goods

export of intangible taxable goods

export of particular taxable services, ie:

toll manufacturing

repair and maintenance services related to the movable goods utilised outside the customs zone

construction service related to the immovable goods that located outside customs zone.
Special VAT rates
Particular businesses or activities are subject to output VAT based on a deemed percentage of transaction
value and are not entitled to claim credits for the input VAT incurred:
Travel agent
Courier service
Particular small-scale retailers
Self-construction
Used cars retailer
Gold jewellery retailer
1%
1%
4%/3%* (4% for taxable services and 3% for taxable goods)
2%
1%
2%

to these rates?
No.
Value Added Tax (VAT) is the principal and broadly applied for import as well as for domestic transactions
in Indonesia. On top of VAT, particular transactions/goods will also deal with import duties, sales tax on
luxury goods and/or super luxury goods tax.
Yes.

There is no requirement for VAT registration for businesses that are not established in Indonesia, unless
they have a permanent establishment in Indonesia that earns VATable income.

Not applicable.
VAT returns should be submitted on a monthly basis.
Indonesia

Yes. Penalty of IDR500,000 per VAT tax return for late submission and 2% per month or part of the month
for late payment of VAT payable, calculated from the due date until the date of payment, max. 24 months.

Additionally, penalty of 2% per month or part of the month for late payment of voluntarily revision on
VAT payable, calculated from the due date until the date of payment.
Generally no, the taxpayer should only submit VAT return on a monthly basis, unless the taxpayer is (also)
appointed as VAT Collector.
Yes. Penalties of 2% from the transaction value can be imposed for late issuance of VAT invoice or issue
incorrect VAT invoice.

No.
Deduction of VAT
A VAT invoice is an instrument to charge VAT (for the seller/deliverer of goods/renderer of services) and
to claim VAT credit (for the recipient that has been confirmed as VATable entrepreneur).

VAT involves detailed and strict administrative compliance requirements. The format and contents of
a VAT invoice must follow guidelines set by the Indonesian Tax Authority which issuance should be done
through e-VAT Invoice system. Incomplete and/or incorrect preparation of a VAT invoice can cause it to be
considered deficient and thus subject to penalties for the seller and disallowed as credit for the buyer.

Particular transactions may generate VAT that will not be available for credit. These situations include
among others:
VAT incurred prior to the entrepreneur being registered for VAT
VAT incurred before the entrepreneur starts production, except from the acquisition of capital goods
VAT on purchases with no direct connection to the conduct of the companys business
VAT imposed by way of tax assessments
defective VAT invoices
purchase and maintenance of sedan and station wagon type of vehicles, unless they are inventory for
sale/rental
overlooked input VAT not yet credited and only discovered after a tax audit has commenced
purchases made by those exempted from charging output VAT.

Value Added Tax (VAT) is the principal indirect tax in the
Indonesia. VAT due on the following taxable events, among
others:
import and export of taxable goods
local supply of taxable goods and/or services
consumption of services and/or intangible goods from
offshore within the Indonesian customs zone
movement of taxable goods between the head office and a
branch and between branches of the same legal entity
movement of goods on consignment
assets/inventories left behind in the course of a companys
dissolution
supply of goods through a third party or a government
auctioneer
supply of goods through a finance lease arrangement
self-use of taxable goods
delivery of taxable goods in the context of a Shariah
financing arrangement, which delivery is considered to be
directly from the VATable entrepreneur to the party that
needs the taxable goods
taxable goods given away at no charge (free goods)
export of intangible taxable goods and taxable services.
Particular goods and services are not subject to VAT. These

include:
Non-taxable goods
Goods produced from mining or from drilling that are

extracted directly from the source
basic commodities vital to the general public
food and beverages served in restaurants, including food
and beverages delivered by catering businesses
money, gold bars, and commercial paper.
Non-taxable services
Medical health services

social services
mail delivery service using stamps
financial services
insurance services
religious services
arts and entertainment services
non-broadcast service advertisements
public transport services on land and on water and air
transport services within the country which become an
inseparable part of air transport services to abroad
labor services
Indonesia
hotel services
services provided by the government in respect of carrying
out general governmental administration
parking provision services
public telephone services using coins
money transfer services using postal money orders
catering services.
However some exemptions apply to particular goods/
situations/taxpayers.
Also on top of VAT, particular transactions/goods will also
deal with import duties, sales tax on luxury goods and/or super
luxury goods tax.

Registration as a VAT entrepreneur in Indonesia is based on
delivery of taxable goods and/or services. Entrepreneur whose
gross cumulative revenue exceeds particular amount is required
to apply for a VATable entrepreneur status. However, some
exemptions apply for particular taxpayers, including those
domicile in free trade zone.
Non-established business could not register for VAT,
unless they have a permanent establishment in Indonesia.

The due date for submission of the VAT return is at the end
of the following month after the end of particular monthly tax
period. Any underpayment of VAT should be settled before
submission of the VAT return.
The VAT return is filed by taxpayer based on selfassessment system. Member of group of companies are taxed
individually, as there are no group relief provisions available.

Yes. Late payment of tax will be subject to interest penalty of
2% per month, maximum 24 months. Late reporting of a VAT
return would also be subject to administrative penalty (current
penalty is IDR 500,000 per return).
Additionally, penalty of 2% per month or part of the
month for late payment of voluntarily revision on VAT
payable, calculated from the due date until the date of payment.

General no, the VATable entrepreneur should only submit
VAT return on a monthly basis, unless the taxpayer is (also)
appointed as VAT Collector.
There is no requirement for VAT registration for businesses

that are not established in Indonesia, unless they have a
permanent establishment in Indonesia that earns VAT income.
Yes. Penalties of 2% from the transaction value can be imposed

for late issuance of VAT invoice or issuance of incorrect VAT
invoice.


claimed if they are not registered in Indonesia?
No.
Yes, for supplies of electronic goods by non-tax resident as well

as for services rendered by non-tax resident to an Indonesian
taxpayer. Furthermore, in general, on top VAT, the supply of
electronic goods from outside Indonesia to Indonesia custom
area will also be subject to other indirect taxes, ie import duties,
sales tax on luxury goods.
However, some exemptions apply.

Not applicable.
Indonesia

A VAT invoice must show at least the following:
Name, address, and Taxpayer Identification Number who
delivers Taxable Goods of Taxable Services
Name, address, and Taxpayer Identification Number of the
buyer of Taxable Goods or recipient of Taxable Services
Type of goods or services, Sales price or replacement and
price discounts
Value added tax which collected
Sales Tax on Luxury Goods which collected
Code, serial number, and date of creating the Tax Invoice
and
Name and signature of who are entitled to sign Tax Invoice.
However there are particular documents which its position
equated with VAT invoice.
For further information on indirect tax in Indonesia please contact:
Tommy David
T +62 (21) 571 0703
E tommy.david@id.gt.com
Arvin Max Samuels
T +62 (21) 571 0703
E arvin.samuels@id.gt.com
Aris Kurniawan
T +62 (21) 571 0703E
E aris.kurniawan@id.gt.com
Japan
Standard rate of 8% for most goods and services consumed domestically.

to these rates?
There is a planned increase to 10% from April 2017.
Consumption tax is the principal indirect tax in Japan. It is a tax on consumer expenditure, and is collected
on business transactions and imports.
An enterprise is exempt from consumption tax reporting obligations for a given tax year if consumption
taxable sales in both the base period (the tax year two years prior) and the first six months of the
immediately preceding fiscal year, are below JPY 10M.

Newly established domestic or foreign enterprises (ie enterprises without a base period for the given
tax year) with capital below JPY 10M at the beginning of the tax year, and foreign corporations with no
sales in Japan during the base period, are also exempt.

The above exemptions only apply to reporting obligations to the tax authorities. If a transaction is
taxable for consumption tax, then it should be charged on the fee regardless of whether the seller or
service provider is below the reporting threshold.

Yes.

Yes.
Most enterprises are required to submit consumption tax returns on an annual basis. Returns may also be
filed more frequently depending on the taxable sales amount.

Yes. If a consumption tax return, or the corresponding payment, is submitted late a penalty can be
imposed.
No.
No.

Japan
Japans Value Added Tax (VAT), or consumption tax, is an 8%

indirect value-added tax on most goods or services transactions
in Japan. As with VAT in other jurisdictions, collection of the
tax is the obligation of businesses at all stages of production,
while the economic burden of the tax is ultimately borne by the
end consumer.
With limited exceptions, any business that transfers goods
or provides services in Japan for consideration is required to file
a consumption tax return on at least an annual basis, and more
frequently if selected by the taxpayer or if consumption tax
payable in the prior fiscal year meets certain thresholds.
Businesses can generally reclaim consumption tax paid on
their purchases of goods or services. If tax paid to suppliers
(input tax) exceeds tax collected on sales (output tax), the
business may claim a refund for the difference. If output tax
exceeds input tax, the difference is payable to the tax authority.
Consumption tax applies, with limited exceptions, to any
transfer of a good or service for consideration in Japan, and to
the removal of goods from a Japan customs area. Because the
tax is intended to apply only to goods and services consumed
domestically, export transactions are not subject to the tax. This
includes most services provided to non-residents, transactions
of goods to be directly exported, and goods to be shipped
outside Japan that enter and are temporarily held in Japan
customs.
For various policy reasons, certain types of non-export
transactions that would otherwise fall within the scope of
consumption tax are also non-taxable. These transaction
categories include:
lease or sale of land
sale of stocks or bonds
transfer of commercial paper
interest and insurance fees
government fees
school tuition and fees
certain nursing care or welfare services
residential rent.
Consumption tax is based on the transaction itself. If it is a

taxable transaction, then consumption tax should be charged
regardless of whether the seller or service provider files tax
returns. This enables the purchaser to claim a credit for the tax
paid in their consumption tax return.
Whether an enterprise needs to file a tax return to report
the consumption tax charged on its sales depends on their
taxable sales in previous periods. An enterprise is exempt from
consumption tax reporting obligations for a given tax year if
consumption taxable sales in both the base period (the tax year
two years prior) and the first six months of the immediately
preceding fiscal year, are below JPY 10M.
Newly established domestic or foreign enterprises (ie
enterprises without a base period for the given tax year) with
capital below JPY 10M at the beginning of the tax year, and
foreign corporations with no sales in Japan during the base
period, are also exempt. Under recent reforms, for fiscal years
beginning on or after 1 January 2013, an enterprise is exempt
only if its taxable sales are below JPY 10M in both the first six
months of the previous fiscal year and the base period.
Taxpayers anticipating to be in a refund position may apply
in advance of the tax year to select a more frequent payment
(refund) period than what would otherwise be required. If a
payment period is elected, it cannot be changed for at least two
years.

Yes.

Overseas entities with no presence in Japan that are either,
required or elect to file a consumption tax return must appoint
a tax agent to handle their filing obligations.

your country?
Under the consumption tax law reform, books, music,
advertising etc. distributed through telecommunication lines
(collectively telecommunicated services) will be deemed to
be provided in the location of the purchaser. This change is
applicable from 1 October 2015.

Japan
Cross-border telecommunicated services provided by foreign

enterprises fall into two categories, B2B transactions and
B2C transactions. B2B transactions are cross-border service
transactions established through telecommunication lines such
as internet or telephone lines where the recipients of the services
are identified as enterprises with reference to the nature of
service or trading terms etc. B2C transactions are cross-border
service transactions provided both inside and outside of the
country through telecommunication lines such as internet or
telephone lines, which do not fall under the definition of B2B
transactions with reference to the nature of service or trading
terms etc.
Foreign enterprises engaging in B2B transactions will
need to make it clear to domestic enterprises (recipients of
the service) that the purchase of the services is subject to
consumption tax.
Foreign enterprises engaging in B2C transactions will be
required to file a consumption tax return and pay consumption
tax to the government.
In the case of B2C transactions, the recipients will not
be allowed to take a credit for the consumption tax on the
transactions unless the foreign enterprises are registered. If
this is the case, the services are categorised as B2C transactions
from a registered foreign enterprise and the recipients will be
able to take a credit for the consumption tax paid under certain
conditions.
The national tax authorities publish the name of registered
foreign enterprises on the internet. Please check the national tax
agency website for further details:
https://www.nta.go.jp/foreign_language/consumption_tax/04.
htm.

The annual consumption tax return and corresponding
payment are due within two months of the end of the
applicable tax period. For a corporation, the tax period is its
fiscal year. More frequent filing and payment are required if
consumption tax payable in the prior tax period meets certain
thresholds:
Tax payable prior year
(JPY)
Filing and payment frequency
Above 48 million
4 million to 48 million
480,000 to 4 million
Below 480,000
Monthly
Quarterly
Semi-annually
Annually

Late filing
Voluntary late filing
Non-voluntary late filing (late filing in
response to a request from the tax
office or in anticipation of an
assessment, etc.)
5% of total tax payable

15% of total tax payable on amounts
up to JPY 500,000, 20% on amounts
above JPY 500,000
Understatement of tax
10% annual interest charge on unpaid tax up to the greater of JPY 500,000
or the declared liability amount, 15% thereafter

No.

No.

claimed if they are not registered in Italy?
As described above, an overseas business that anticipates a refund
can elect to be a consumption tax return filer. The election is
irrevocable for two years. If the business does not have a presence
in Japan, a tax agent needs to be appointed to act on their behalf.

An invoice must show:
the seller name and address
the invoice date
the customer name and address
the total amount of consumption tax charged.
Where a consumption tax invoice includes non-taxable or
export services, it must:
show clearly that there is no consumption tax payable on
those goods or services
For further information on indirect tax in Japan please contact:
Kumiko Miyajima
T +81 3 5770 8914
E kumiko.miyajima@jp.gt.com
Japan
Malaysia
Standard rate of 6% for goods and services unless listed under the zero-rated supply order, exempt
supply order or relief order and their respective amendments.
Zero-rated goods and services include selected food and medicines.
Exempt goods and services include residential properties and financial services.

these rates?
No.
Goods and services tax (GST) is the principal indirect tax in Malaysia. It was introduced from 1 April 2015
and replaced the previous regimes comprising of sales tax and service tax.
Yes. It is compulsory for taxable persons with a taxable turnover exceeding RM500,000 over a twelve
month period to register for GST purposes. There are also provisions for voluntary registration.

The compulsory and voluntary registration provisions do not distinguish between businesses established in
Malaysia or outside Malaysia.

Yes.
Either monthly or quarterly.

Yes.
No.
Yes. Penalties can be imposed for a range of other offences.
Malaysia

No.
Deduction of VAT
Input tax credit generally cannot be claim for GST incurred for expenses relating to:
Passenger motor car and the hire of such
The supply of goods and services relating to the repair, maintenance and refurbishment of a
passenger motor car
Club subscription fee
Payment of contribution towards any insurance contracts or takaful certificates in relation to medical
treatment or personal accidents (except obligatory under selected legislations and certain collective
agreements)
Medical expenses (except obligatory under selected legislations and certain collective agreements)
Family benefits
Entertainment to a person other than employees or existing customers (except if the business is of
providing entertainment).

Malaysia introduced the Goods and Services Tax (GST),
replacing and repealing the previous sales tax and services tax
of Sales Tax Act 1972 and Service Tax Act 1975, effective from
1 April 2015. The standard rate of GST is 6% generally, and
zero per cent on selected items. GST is chargeable on all taxable
supplies of goods and services made in the course of furtherance
of a business in Malaysia by a taxable person.
GST is also chargeable on the importation of goods and
services from overseas. Certain goods are given relief from
payment of GST upon importation. GST will be charged on
most goods based on the value of the imported goods, which
includes value determined for customs purposes, customs duty
paid or to be paid, and excise duty paid or to be paid. The GST
amount will be shown in a K1 form, and will be charged during
importation of the goods.
For importation of services, the GST liability shifts from the
supplier to the recipient of the imported services. The recipient
is liable to account for GST output tax based on the date of
the invoice or the date of payment, whichever is earlier, if such
imported services are for business purposes and consumed
in Malaysia. If the recipient is making taxable supplies, they
are entitled to claim input tax on the services. However, if the
recipient is making exempt supplies, output tax accounted for
and paid by the person is not eligible for input tax credit.

A taxable person is a person who makes taxable supplies or
intends to make taxable supplies in Malaysia with a taxable
turnover of RM500,000 or more over a twelve-month period.
The period reviewed is the historical twelve-month period
as well as the prospective twelve months. Such a person is
required to be registered for GST purposes. A person who
makes taxable supplies below the threshold is not required to
register but may do so on a voluntary basis.

Businesses not established in Malaysia are subjected to the same
registration requirements if they are making taxable supplies in
Malaysia.

There is no specific legislation. However, administratively, a
recipient who is not a GST registered person may account for
GST output tax in a prescribed GST04 form.

Yes. A person who does not belong to Malaysia is subject to the
same requirements for registration if he makes taxable supplies
in Malaysia. In the event that person is liable to register, he
is required to appoint a local agent to act on his behalf. An
agent acting on behalf of his principal who does not belong in
Malaysia is responsible and accountable for his principals tax
liabilities.
Malaysia

Registered taxable persons with a taxable turnover of
RM5,000,000 or more will be required to submit monthly
returns. Registered taxable persons with a taxable turnover not
exceeding RM5,000,000 will be required to submit quarterly
returns, with the end of one of the taxable periods coinciding
with end of the fiscal year of the registered taxable person.
The end of the taxable period for each return is generally
the end of a calendar month. The due date for the submission
of a return is end of the calendar month following the end of
the taxable period. Provisions are available for applications to
be submitted to the Director General for alternative taxable
periods.
GST returns may be submitted manually or electronically
via a web portal known as the Taxpayers Access Point.

Yes. The penalty for late payment of the tax when prosecution
is not instituted is:
5% of the tax due and payable for the first thirty-day period
an additional 10% of the tax due and payable for the second
thirty-day period
an additional 10% of the tax due and payable for the third
thirty-day period, subject to a maximum penalty of 25% of
the amount of tax due and payable.
Prosecution may be instituted after the expiry of the thirdthirty period. A fine of not exceeding RM50,000 or to
imprisonment for a term not exceeding three years or to both,
may be imposed on prosecution and conviction of failure to
pay the tax. The court may also order for a penalty similar
to the penalty that may be imposed if prosecution was not
instituted.

No.

Yes. Penalties can be imposed for a range of other offences,
including:
incorrect returns
evasion and fraud
improperly obtaining refund
offences relation to goods, invoices and receipts
obstructing an officer
refusing to answer question or providing false information
abetment.
A general penalty also is applicable on a conviction of an

offence under the Goods and Service Tax Act where no
penalty is expressly stated in the legislation. The general penalty
is a fine not exceeding RM30,000 or an imprisonment term not
exceeding two years or to both.

claimed if they are not registered in Malaysia?
No.

A GST tax invoice must show:
Tax Invoice in a prominent place
serial number
date of tax invoice
name, address and GST registration of supplier
name and address of the recipient of the supply
description of each of the goods or service
the type of supply (ie standard rated, zero rated or exempt),
quantity of good or extent of services and the amount
payable excluding tax
discounts offered if any
total amount payable excluding the tax, the rate of tax and
the total tax chargeable shown separately
total amount payable including total tax chargeable
if any of the amounts are expressed in a foreign currency,
their Ringgit Malaysia equivalent must be stated.
There are provisions for the issuance of simplified tax invoices
which does not contain all the requirements of a tax invoice, as
well as the issuance of self-billed invoices.
GST Audit File (GAF)

GST registered taxpayers must be able to produce a GST
Audit File (GAF) on the request of the authorities, usually
in the event of an audit. A GAF is essentially a computer
file containing the basic information of the taxpayer with a
formatted and summarised list of all the transactions in a given
taxable period.
There are two formats specified for a GAF bar-delimited
text format or XML format. The schema for each format is
specifically detailed and contains various information of each
transaction.
For further information on indirect tax in Malaysia please contact:
Alan Chung
T +60 3 2692 4022
E alan.chung@my.gt.com
Malaysia
New Zealand

Zero-rated supplies include exported goods and services, the sale of a going concern to a GST
registered person and transactions involving the supply of land between GST registered persons.
Exempt supplies include financial services, residential rent, fines, penalties and interest.

to these rates?
No.
Goods and Services Tax (GST) is the principal indirect tax in New Zealand. It is a transactional tax and is
charged and collected on taxable supplies.
Yes. If the annual turnover of taxable supplies in New Zealand exceed (or are expected to exceed)
$60,000 in any 12 month period, it is necessary to register. Persons can voluntarily register for GST if
this threshold is not exceeded if they are conducting a taxable activity and are making taxable supplies.

Yes. However specific rules exist in relation to non-resident businesses and whether they are entitled
GST register. This depends on whether they are a resident or non-resident for GST purposes (a slightly
different test than that for income tax purposes) and where the goods are physically located at the time of
supply or where the services are physically performed.

No, although many non-residents do engage with local agents to reduce compliance and
operational matters.
Returns can be submitted on a monthly, two-monthly, or six-monthly basis depending on the annual
turnover of taxable transactions of the registered person.

Yes. If a GST return, or the corresponding payment, is submitted late a penalty can be imposed.
No.
Yes. Shortfall penalties, ranging from 20% to 150% of the tax shortfall, can be imposed for a range of
errors or omissions.

No. A business must be registered for GST in New Zealand to be eligible to claim any GST. With effect
from 1 April 2014 a non-resident entity can register without having a taxable activity in New Zealand. This
allows a pure recovery mechanism if certain criteria are met.
New Zealand

Goods and Services Tax (GST) is the main type of indirect
taxation in New Zealand.
GST is a tax on consumption which is applied on the
supply of most goods and services. It is also applied to goods
upon importation into New Zealand and certain services when
purchased from a non-resident. Although GST is ultimately
borne by the consumer by being included in the price paid, the
responsibility for charging, collecting and paying it to the tax
authority rests with the business making the supply i.e. the sale.
GST must be charged on a supply of goods or services
in New Zealand by a registered person in the course of
furtherance of a taxable activity carried on by that person
this is referred to as output tax. Any GST on costs incurred
in generating such supplies can be claimed this is referred
to as input tax. The difference between the output tax and
the deductible input tax in each accounting period will be the
amount of GST payable by the business to Inland Revenue.
Where the input tax exceeds the output tax, a refund can
be claimed.
A taxable activity means any activity which is carried on
continuously or regularly, whether or not for pecuniary profit,
and involves or is intended to involve the supply of goods and
services to another person for a consideration.
There are two rates of GST that are applied to goods
and services in New Zealand; standard rate and zero rate. In
addition, some goods and services are exempted from the tax.
The most common exempt supplies include financial services,
residential rent, fines, penalties and interest.
Generally, businesses that make exempt supplies are unable
to claim input tax on costs incurred generating those supplies,
so the GST paid to suppliers is a real cost to these businesses.
However, there is the ability for businesses that supply exempt
financial services to elect to zero-rate their supplies which
enables a greater recovery of GST, where:
an election is lodged with the Commissioner of Inland
Revenue; and
the supply is between two registered persons; and
the recipient of the supplies makes at least 75%
taxable supplies.
This is referred to as the provision of business to business

financial services.
Goods imported into New Zealand are subject to GST. This
is imposed by New Zealand customs at the border. The GST
(plus any duties and other fees) must be paid by the importer
at the time of importation in order for the goods to be released.
Where the goods imported are for use in the taxable activity,
the importer (if GST registered) can recover the GST. GST is
charged on the value of the importation, including any customs
duty, freight and insurance.
It is important to note the interaction between GST and
customs duty. Customs duty is levied upon the importation of
certain goods into New Zealand. Unlike other indirect taxes,
such as GST, once duty has been paid it is not recoverable
by the importer. It therefore represents a final cost to the
importing business.
Customs does not collect duty and GST where the total
amount payable on any one importation is less than $60. For
example, if no duty is payable, this equates to a de minimus
value of $400 under which no GST is payable.

of goods or services in the course or furtherance of a taxable
activity must register for GST if the value of its taxable supplies
in New Zealand exceed $60,000 or is expected to exceed this
limit within any 12 month period. A person can register on a
voluntary basis even if the registration limit has not
been reached.
Therefore, once a person is registered for GST, all of their
the nature of some of those activities are different.
Two or more persons can be registered together as a GST
group if:
they satisfy the control test i.e. one of them controls each
of the others, or one person controls all of them
for companies, each of the companies is a registered person,
or the total value of taxable supplies made by the companies
is at least 75% of the total supplies made by the group to
persons outside the group
for companies, the members of the group have at least 66%
common ownership.
New Zealand
A person cannot be treated as a member of more than one GST

group at a time.
The main advantage of GST group registration is that, apart
disregarded for GST purposes. This reduces the risk of GST
registered, but associated persons.
However, there are some disadvantages and any decision on
whether to group register should be carefully considered. For
example, all GST group members (including former members)
are jointly and severally liable for the GST debt of the group
during the period of their membership.

Yes, although non-resident businesses are only able to register
for GST in New Zealand if their taxable supplies are generated
when the time of supply occurs within New Zealand.
Time of supply arises at the earlier of an invoice being
issued or payment being received.
For example, a non-resident selling goods direct to a New
Zealand customer over the internet would not be able to
register for GST if the goods are outside of the country when
the payment is received. However, with effect from 1 April
2014 the ability for a non-resident to GST register has been
expanded (further information can be found below).

No, this is not a requirement. However, depending upon the
types of supplies being made, the logistical considerations and
the volume of transactions, non-residents may engage with
a local agent to facilitate the supply. Specific GST provisions
exist regarding transactions involving agents that should be
considered before making any decisions.

in your country?
New legislation will take effect from 1 October 2016 which
requires non-resident suppliers of remote services to register,
charge and account for GST on supplies made to New Zealand
residents. A remote service is defined as a service where, at
the time of the performance of the service, there is no necessary
connection between the physical location of the recipient and
the place of physical performance. GST does not need to be
charged if the service is provided to a New Zealand GSTregistered businesses unless the supplier and recipient agree
otherwise, in which case the supply will be zero-rated.

GST returns may be filed monthly, bi-monthly or six
monthly depending upon the level of taxable supplies in a 12
month period.
A bi-monthly return period is the default filing frequency
in New Zealand. However, if a registered person makes
taxable supplies of less than $500,000, they may apply to the
Commissioner to return GST six-monthly. Conversely, if a
registered person makes taxable supplies over $24 million in a
12 month period, they are required to return GST on a monthly
basis. Anyone can choose to file monthly if they so desire.
All GST returns have to be submitted on the 28th day
of the following month, together with any payment. The
exceptions to this rule are where the period ends 30 November,
or 31 March. Returns and payments for these periods are due
15 January and 7 May respectively. If the due date falls on a
weekend or public holiday the due date is pushed back to the
next business day.

Late filing penalties are imposed if GST returns are not lodged
by the due date. The current penalties per late return are $250
for taxpayers registered on an invoice or hybrid basis and $50 if
registered on a payments basis.
A registered person will incur late payment penalty of 1%
of their underpaid GST obligation on the first day after the due
date, a 4% incremental penalty on the seventh day after the due
date, and then a further 1% incremental each month thereafter.
In addition, interest will be charged on the accumulating
total. The current interest rate charged by Inland Revenue
is 9.21%.
New Zealand
Not applicable.

the words Tax invoice
the sellers GST registration number
the invoice date
the total amount of GST charged expressed in
New Zealand dollars.

not comply with the GST legislation.
Shortfall penalties and interest can be applied for incorrect
positions taken in GST returns. These penalties are very
punitive, ranging from 20% to 150% of the GST discrepancy.
If an error is identified and voluntarily disclosed to Inland
Revenue this reduces or removes the shortfall penalty exposure
(depending upon the nature of the offence and whether the
disclosure was made pre or post audit notification).
Can the GST incurred by overseas businesses

be claimed if they are not registered in New
Zealand?
No. You must register in New Zealand in order to recover any
GST incurred.
Non-resident businesses are able to register for GST if they
conduct a taxable activity in New Zealand. This requires the
goods to be physically in New Zealand at the time of supply,
or for services, those services must be physically performed
in New Zealand. The time of supply provisions state that this
event arises at the earlier of the issuing of an invoice or receipt
of payment.
From 1 April 2014, non-residents businesses that are not
making taxable supplies in New Zealand are able to voluntarily
register for GST in order to recover the GST on costs they
incur. To be eligible to register the business will have to:
be registered for consumption tax in the jurisdiction they
are tax resident
where the jurisdiction of residence does not have a
consumption tax, the person is carrying on a taxable
activity, and has a level of taxable activity in a country or
territory that would render them liable to be registered
if they were carrying out the taxable activity in New
Zealand (ie more than $60,000 of taxable supplies in a
12 month period).
It must also have either:

the amount of the supply, excluding GST
the GST and total amount payable for the supply
if GST is included in the final price, it has to be expressed in
that case.
An input claim can only be made if a valid tax invoice is held at
the time the GST return is lodged.
For further information on indirect tax in the New Zealand please contact:
Dan Lowe
T +64 (09)308 2531
E dan.lowe@nz.gt.com
Pakistan
Standard rate of 17% for most of goods and 14% to 16% for most of services.
Reduced rates for certain goods and services are also applicable subject to respective conditions
applicable thereto.
Zero-rate of tax is applicable for export of goods and certain services.

these rates?
Majority of changes are usually notified by end of June each year which are applicable from first day of
July i.e. start of fiscal year in Pakistan.
General Sales Tax is the principal indirect tax in Pakistan. It is applicable on taxable supplies and imports.
Is there a registration limit for the tax ?
No pecuniary limit. Every manufacturer, importer, wholesaler, distributor or dealer is required to obtain
registration.
Not applicable.

Not applicable.
Sales tax returns are required to be submitted on monthly basis.

Yes. Penalties are applicable for delayed submission of returns. Default surcharge is separately applicable
for delay in payment of tax.
Not applicable.
Yes. Penalties are applicable for a range of errors or omissions.

Not applicable.
Deduction of VAT
A registered person shall not be entitled to deduct input tax from output paid in respect of:
transactions lacking evidence in support thereof
gifts and giveaways
food, beverages, garments, fabrics and other items for consumption or entertainment
items not directly used in making taxable supplies.
Pakistan

The principal indirect tax in Pakistan is General Sales Tax
(GST) charged on taxable goods under Sales Tax Act, 1990
(the Act). GST is a Value Added Tax (VAT) in which the
value added component at each stage of business transaction
is taxed. GST is collectable from a registered person at import
and charged by a registered seller of taxable goods. Tax credit
or input tax is allowed when the registered person keeps proper
record of claim regarding tax invoice and bill of entry. The
goods meant for export were zero-rated. The tax paid on raw
materials and other goods purchased in the course of business
are deducted automatically while determining the tax liability.
The system is based on self-assessment/clearance procedure and
payment of tax.
Sales tax on service has also been introduced in Pakistan
from 2011. Such tax is being charged, levied and collected by
provincial governments in different provinces under their
respective provincial legislations. Rate of tax on services varies
from 14% to 16% in different provincial jurisdictions.

No pecuniary limit/threshold for registration is here. Every
manufacturer, importer, wholesaler, distributor or dealer
is required to obtain registration. A person required to be
registered shall submit an application through the computerised
system along with the following documents, namely:
a) CNIC of all owners, members, partners or directors, as the
case may be, and the representative, if any, and in case of
non-residents, their passports
b) in case of a company or registered AOP, the Registration or
Incorporation Certificate, along with Form III or Form A as
prescribed in the Companies Ordinance, 1984 (XLVII of 1984)
c) in case of a partnership, the partnership deed
d) bank account certificate issued by the bank in the name of
the business
e) lease or rent agreement, if the premises are rented, along
with CNIC of the owner of the premises
f) ownership documents of the premises, such as registered
sale deed or registered transfer deed
g) latest utility bills (electricity, gas, land-line telephone, and
post-paid mobile phones, as the case may be)
h) list of machinery installed, in case of manufacturer
i) distribution certificate from the principal showing
distributorship or dealership, in case of distributor or dealer
j) balance sheet/statement of affairs/equity of the business
k) particulars of all branches in case of multiple branches at
various locations
l) particulars of all franchise holders in case of national or
international franchise.

Not applicable.

in your country?
Yes, such services like advertisement are taxable even if
provided from an offshore location outside the territorial
jurisdiction of Pakistan.

Not applicable.

GST returns cover a tax period of one month, ending on the
last day of a calendar month. A registered person is required to
furnish its monthly return by 15th of next month. Payment of
GST is also required to be made before submission of return.

In case of sales tax on goods, a penalty of PKR 5,000 is
applicable for delay in submission of return. Default surcharge
at the rate of KIBOR plus 3% is applicable for delay in
payment of tax.
For sales tax on services, different rates of penalties and
default surcharge are applicable for late submission of returns
and payment of tax respectively in different provincial
jurisdictions.

In addition to the monthly sales tax return, an annual sales tax
return is also required to be submitted.

Yes. A range of penalties are applicable for default of other legal
requirements as well.

claimed if they are not registered in Pakistan?
Not applicable.
Pakistan

a unique serial number
sellers name and address
sellers GST registration number
date of issue of invoice
date of supply
customers name and address
a description and quantity of the goods or services supplied
to the customer
value exclusive of sales tax
amount of sales tax
value inclusive of sales tax.
For further information on indirect tax in the Pakistan please contact:
Nadeem Tirmizi
T +92 (0)51 2271906 Ext 107
E ntirmizi@gtpak.com
Zahid Mehmood
T +92 (0)51 2271906 Ext 109
E zmehmood@gtpak.com
Muhammad Mansoor
T +92 (0)51 2271906 Ext 110
E m.mansoor@gtpak.com
Pakistan
Philippines
Standard rate of 12% for all taxable sale, barter, exchange, lease of goods or properties and supply
of services.
Zero-rated sales include export sales, foreign currency denominated sales, sale of power or fuel
generated through renewable sources of energy, services rendered to international shipping vessels
or aircraft transport companies, transport of passengers and cargo by domestic air and sea
carriers from the Philippines to foreign country, and sales to tax-exempt persons under special laws
or international agreements, processing, manufacturing or repacking goods or services for other
persons doing business outside the Philippines which goods are subsequently exported, where the
services are paid for in acceptable foreign currency and accounted for in accordance with the rules
and regulations of the Bangko Sentral ng Pilipinas (BSP).
Exempt sales cover transactions such as:

sale or importation of agricultural and marine food products (in original state), livestock and
poultry generally used for human consumption

sale or importation of fertilizers, seeds, seedlings, fingerlings, and feeds

sales by registered agricultural cooperatives

sales by registered non-agricultural, non-electric and non-credit cooperatives

services by agricultural contract growers and millers of palay, corn and sugar cane


sale of low-cost and social housing

medical, dental, hospital and veterinary services (except those rendered by professionals)

gross receipts from lending by credit or multi-purpose cooperatives

sale, importation, printing or publication of books, magazines and newspapers

services subject to percentage tax (eg services of banks, non-bank financial intermediaries
performing quasi-banking functions, and other non-bank financial intermediaries, among others)

services rendered by individuals pursuant to an employer-employee relationship

importation of personal and household products belonging to Philippine residents returning from
abroad and non-resident citizens coming to resettle in the Philippines provided exempt from tariff
and customs duties

importation of professional instruments and implements, wearing apparel and domestic animals
and personal household effects (except any vehicle, aircraft, machinery) belonging to persons
coming to settle in the Philippines for their own use, whether carried by them or arriving within
90 days before or after the arrival of such persons

Services rendered by regional or area headquarters acting as supervisory and coordinating
centres and do not earn or derive income

lease of residential unit with a monthly rental not exceeding P12,800

export sales by persons who are not VAT-registered
Philippines
sale, importation or lease of passenger or cargo vessels and aircraft

importation of fuel, goods and supplies by persons engaged in international shipping or air
transport operations
sale or lease of goods or properties or services by persons whose gross annual sales or
receipts do not exceed Php 1,919,500.

to these rates?
No.
Value Added Tax (VAT) is the principal indirect tax in the Philippines. It is levied on the sale, barter,
exchange, lease of goods or properties and services in the Philippines, and on importation of goods into
the Philippines.
Yes. Any person or entity engaged in trade or business whose annual gross sales and/or receipts exceed
Php 1,919,500 is required to register as a VAT taxpayer. If their gross sales and/or receipts do not
exceed Php 1,919,500, they may opt not to register as a VAT taxpayer but will be subject instead to 3%
percentage tax on their gross quarterly sales or receipts

No. A non-resident foreign corporation supplying goods to any person in the Philippines is not required to
register as a VAT taxpayer in the Philippines.

No. The appointment of a fiscal representative is not required in the Philippines. In case a non-established
person is subject to VAT in the Philippines, the VAT shall be withheld and remitted by the person or entity
in the Philippines making the income payment to the non-resident alien individual or non-resident foreign
corporation.
All VAT taxpayers are required to file monthly VAT declarations and quarterly VAT returns.

Surcharge, interest and compromise penalty apply to late filing and payment of VAT due.
Yes. All VAT taxpayers are required to submit a quarterly summary list of sales, purchases and importation
used for computerized matching of VAT taxpayers records.

No. The option to refund is available only in certain circumstances to VAT-registered taxpayers in the
Philippines.
Deduction of VAT
Taxpayer can deduct from the gross selling price sales discounts granted and determined at the time
of sale which are expressly indicated in the invoice and which amounts form part of the gross sales duly
recorded in the books of accounts. All the conditions should be complied with.

Sales allowances and sales returns which are not supported by documents (ex. credit memos, etc.)
cannot be deducted from the gross sales subject to VAT.

The Value-Added Tax (VAT) is the principal type of indirect
tax in the Philippines. VAT is levied on the sale, barter,
exchange, lease of goods or properties and services in the
Philippines, and on importation of goods into the Philippines.
The VAT is the liability of the supplier of the goods or services
but the burden of the tax may be shifted or passed on to the
buyer, transferee or lessee of the goods, properties or services.

(including any VAT paid at importation). If at the end of any
taxable quarter, the output tax exceeds the input tax, the excess
shall be paid by the VAT-registered person. If the input tax
exceeds the output tax, the excess shall be carried over to the
succeeding quarter or quarters. Any input tax attributable to
zero-rated sales by a VAT-registered person may at his option
be refunded or credited against other internal revenue taxes,
subject to certain conditions.
Philippines
However, with respect to purchases of depreciable assets,

the aggregate acquisition cost of which, in a calendar month,
exceeds Php1 million regardless of the acquisition cost of each
capital good, the input taxes from these purchases should be
spread evenly over a period of 60 months or the useful life of
the capital goods, whichever is shorter.
services in the Philippines; the standard rate of 12% and the
zero rate. In addition, some goods and services are exempted
from VAT.
all of the input tax that they incur, in which case, the VAT paid
would form part of the cost to acquire what was purchased.
The input tax on purchases of goods, properties or services
related to zero-rated sales shall be available as input tax credit
against the output tax due from transactions subject to the
12% VAT rate, or can be recovered from the government by
applying for a tax refund or tax credit.
Goods imported into the Philippines are subject to VAT
equivalent to 12% based on the total value used by the Bureau
of Customs in determining tariff and customs duties, plus
customs duties, excise taxes, if any, and other charges prior to
the release of such goods from the customs custody.
Export sales of VAT-registered entities that enjoy tax
incentives under the Philippine Economic Zone Authority
(PEZA) or the Board of Investments (BoI) are zero-rated.
PEZA and BOI-registered entities are not subject to 12% VAT
on importation, subject to certain conditions.

Registration for VAT is mandatory to all persons or entities
engaged in trade or business whose annual gross sales and/
or receipts exceed Php 1,919,500. In case of taxpayers whose
gross sales and/or receipts do not exceed Php 1,919,500 million,
they may opt not to register as VAT taxpayer. However, they
are required to pay 3% tax on their gross quarterly sales or
receipts.
Branches must register separately from the head or main
office, although only one consolidated VAT return must be
filed for the principal place of business or head office and all
of its branches. There is no group VAT registration in the
Philippines.
If a person who is liable to register for VAT fails to register,
he/it shall be liable to pay output VAT as he/it were a VATregistered person, but without the benefit of input tax credits
for the period in which he was not properly registered. The
person who fails to register may also face suspension or closure
of its business for a period of not less than five days.

An overseas company which is not established in the
Philippines is not required to register for VAT in the
Philippines.

in your country?
The Philippines follow the consumption doctrine which means
that services rendered outside the Philippine territory is not
subject to Philippine Tax. However, in some cases involving
e-commerce and electronically downloaded software, the
payments shall be considered as an importation subject to VAT.

The appointment of a fiscal representative is not required in the
Philippines. In case a non-established person is subject to VAT
in the Philippines, the VAT shall be withheld and remitted by
the person or entity in the Philippines in behalf of the nonestablished person by filing a separate VAT declaration/return
(BIR Form 1600).
The VAT withheld and paid for the non-established
business which VAT is passed on to the person or entity in
the Philippines may be claimed as input tax. The duly filed
BIR Form 1600 and proof of payment thereof shall serve as
documentary substantiation for the claim of input tax by the
person or entity in the Philippines upon filing its own VAT
return.
Philippines
The Philippine VAT law and regulations imposes upon

VAT-registered taxpayers an obligation to file monthly VAT
declaration and quarterly VAT returns. The monthly VAT
declarations are filed for the first two months of the quarter,
while the quarterly VAT return is filed at the end of the quarter.
The monthly VAT declaration returns covering the
monthly sales and/or receipts should be filed, and VAT due
thereon should be paid not later than the 20th day following
the end of the month. In the case of VAT-registered taxpayers
enrolled in the electronic filing and payment system (eFPS),
their monthly VAT return should filed on a staggered basis (not
later than the 21st day to 25th day after the end of the month)
depending on their industry grouping.
On the other hand, the quarterly VAT returns cover
the amount of gross sales or receipts for the taxable quarter.
The VAT payable for the taxable quarter is reduced by the
payments in the monthly VAT declarations and allowable input
taxes. The quarterly VAT return should be filed by a VATregistered taxpayer, whether filing manually or under eFPS,
not later than the 25th day following the close of the taxable
quarter.
No annual VAT return is required to be filed by VATregistered persons in the Philippines.
All VAT-registered taxpayers are required to submit a

quarterly summary list of sales (SLS), summary list of purchases
(SLP) and, if applicable, summary list of importations (SLI).
The information in the summary list of sales, purchases and
importation is used for computerized matching to detect under
declaration of sales and/or purchases.
VAT registered persons with discrepancy on their sales
and/or purchases shall be notified of the findings through the
issuance of a letter notice (LN). In case the taxpayer refutes
the discrepancy, the taxpayer shall be given the opportunity
to reconcile his/her/its records with the BIR and to submit
documentary proofs in support of his/her/its arguments.
If no response is received from the taxpayer or he/she/it
fails to settle his/her/its deficiency, a letter of assessment shall
be issued to the taxpayer.

A late or erroneous return attracts penalties: 25% surcharge,
20% interest and compromise penalty based on the amount
of tax unpaid or if there is no unpaid tax, depending on the
amount of gross sales or receipt of the taxpayer. The interest is
imposed on the unpaid amount of tax from the date prescribed
from the payment until the amount is fully paid.
However, in case of wilful neglect to file VAT return within
the prescribed period for filing the VAT return or in case a false
or fraudulent return is wilfully made, a surcharge of 50% of the
tax or deficiency tax shall be collected which shall be in addition
to the 20% interest to be imposed on the unpaid amount of tax,
and compromise penalty.

Yes. Various penalties are imposed for violations of the VAT
rules.
Aside from the penalties for late and erroneous filing of
returns, administrative and penal sanctions may be imposed,
among others, in the following cases:
a) failure to issue receipts and invoices
b) failure submit the quarterly list of sales and purchases
c) failure to maintain or keep any record and supply the
correct and accurate information
d) failure to indicate separately the VAT in the VAT invoice or
official receipt.

be claimed if they are not registered in the
Philippines?
No. The VAT incurred by an overseas business may not be
the subject of a claim for refund if it is not registered as a VAT
taxpayer in the Philippines.
A VAT-registered taxpayer may claim for refund of its
unutilized excess input tax if it is attributable to zero-rated
sales. It may also refund all of its accumulated input VAT upon
closure or cessation of its business.
Philippines

a statement that the seller is a VAT-registered person,
followed by his Taxpayer Identification Number (TIN)
the total amount which the purchaser pays or is obligated
to pay to the seller with the indication that such amount
includes the VAT, provided that:
the amount of tax shall be shown as a separate item in
the invoice or receipt
if the sale is exempt from VAT, the term `VAT-exempt
sale shall be written or printed prominently on the
invoice or receipt
if the sale is subject to 0% VAT, the term zero-rated
sale shall be written or printed prominently on the
invoice or receipt
if the sale involves goods, properties or services some of
which are subject to and some of which are VAT zerorated or VAT-exempt, the invoice or receipt shall clearly
indicate the break-down of the sale price between its
taxable, exempt and zero-rated components, and the
calculation of the VAT on each portion of the sale shall
be shown on the invoice or receipt. The seller has the
option to issue separate invoices or receipts for the
taxable, exempt, and zero-rated components of the sale
in the case of sales in the amount of one thousand pesos
(P1,000.00) or more where the sale or transfer is made
to a VAT-registered person, the following additional
information should be indicated in the VAT invoice/receipt:
(a) the name; (b) business style, if any; and (c) address and
TIN of the purchaser, customer or client.
Only VAT invoices and official receipts duly registered with
the Bureau of Internal Revenue can be issued and be used
as a valid source of input tax. In case the taxpayer uses a
computerized accounting system which include e-invoicing,
prior approval of the Bureau of Internal Revenue must be
secured before using the same.
For further information on indirect tax in the Philippines, please contact:
Edward D. Roguel
T +63 (2) 988-2288 local 540
E wowie.roguel@ph.gt.com
Philippines
Singapore
Standard rate of 7% for goods and services.

Zero-rate for export of goods and for international services.

to these rates?
No.
Goods and Services Tax (GST) is the principal indirect tax in Singapore. It is a broad-based consumption
tax and is levied on almost all supplies of goods and services in Singapore and on imports.
Yes. It relates to the turnover of taxable supplies made in a 12 month period, and once the threshold has
(or will be) reached it is necessary to register. The current registration threshold is SGD 1 million.

The same registration threshold applies to all taxable persons including individuals, residents and nonresidents.

Yes. An overseas entity (defined as one that is not a resident in Singapore and/or does not have an
established place of business in Singapore) is required to appoint a local agent.
Most businesses are required to submit GST returns covering three month accounting periods, ie on
quarterly basis. Returns can also be submitted on a half-yearly or monthly basis (subject to conditions and
prior approval from the tax authority).

Yes. If a GST return or the corresponding payment, is submitted or paid late, a late submission/payment
penalty can be imposed.
No.
Yes. Penalties can be imposed for a range of errors or omissions, providing incorrect information, failure
to register, etc.
Singapore

No.
Deduction of VAT
Disallowed input tax prescribed by legislation include club subscription fee charged by sports and
recreation clubs, medical and accident insurance premiums incurred for employees (unless the insurance
or payment of compensation is obligatory under the Work Injury Compensation Act or under any collective
agreement within the meaning of the Industrial Relations Act), medical expenses incurred for employees
(unless such expenses are obligatory under the Work Injury Compensation Act or under any collective
agreement within the meaning of the Industrial Relations Act), family benefits; the supply or importation of
a private motor car including the costs and running expenses incurred on private registered motor cars
and any transaction involving betting, sweepstakes, lotteries, fruit machines or games of chance.

taxation in Singapore.
It is a tax on consumption which is applied on the supply
of most goods and services in Singapore. It is also applied to
goods, when imported into the country. Although GST is
ultimately borne by the consumer by being included in the
price paid, the responsibility for charging, collecting and paying
it to the tax authority at each stage of the supply chain rests
with the business (including individuals) making the supply.
A business registered for the tax will charge GST (output
tax) on its sales/services, and incur GST (input tax) on its
purchases (including any GST paid at importation). The
in each accounting period will be the amount of GST payable
by the business to the tax authority. Where the input tax
exceeds the output tax, a refund can be claimed.
A transaction is within the scope of Singapore GST if the
interpretation
the supply is made in Singapore
person is a person or entity who is registered for GST in
Singapore, or has a liability to become registered
There are two rates of GST that are applied to goods and
services in Singapore; the standard rate and the zero rate. In
addition, some goods and services are exempt from GST.
Generally, businesses that make exempt supplies are
unable to claim the input tax that they incur, so the GST paid
to suppliers will be a real cost with the exception of certain
financial institutions where the input tax incurred may still be
claimed based on a fixed rate prescribed by the tax authority.
All goods imported into Singapore are subject to GST at

the standard-rate (except investment precious metals which
are exempt from import GST). The tax will have to be paid by
the importer at the time of importation (unless the importer
is under specific GST schemes/concessions which allow the
suspension/deferment of import GST). Where the importation
is for business purposes and the importer is registered for GST,
it is possible to reclaim the tax.
It is also important to note the interaction between GST
and Customs duty. Customs duty is levied on certain goods
imported in Singapore. Unlike GST, once customs duty
very important to ensure that the correct rate of customs duty
is applied. GST is charged on the cost, insurance and freight
(CIF) value of the imported goods, including any custom duty.

A taxable person who either makes or intends to make taxable
a business must register for GST if the value of its taxable
supplies made in Singapore exceeds the registration threshold,
or is expected to exceed the threshold in the next 12 months.
A taxable person can register on a voluntary basis even if the
registration threshold has not been exceeded.
A taxable person includes an individual, partnership,
company, club, association, society, management corporation
or non-profitable organisation.
Singapore

a GST group if:
1. Each member in the group is already registered for GST
individually.
2. Each member in the proposed group must have at least one
of the following attributes:
a) A resident in Singapore or an established place of
business in Singapore;
b) Annual turnover of at least $1 million;
c) Listed on a securities exchange established in or outside
Singapore;
d) A subsidiary of a body corporate that fulfills (b) or (c);
or
e) Financed by an entity (as part of its venture capital
investment business) who fulfills (b) or (c).
3. The nominated representative member must be a Singapore
resident or has an established place of business in Singapore.
A company has an established place of business in
Singapore if it has a place at which it carries on business in
Singapore, its physical presence is connected to a particular
premise and this place of business is intended to have a
degree of permanence.
4. For application which comprises an overseas person who
does not fulfill (2)(a) above, both the foreign member and
local representative member must have at least fulfilled (2)
(b), (c), (d) or (e).
5. Each member in the proposed group must satisfy one of the
following control requirements. In general, control exists
when there is a holding company-subsidiary relationship:
a) One of the members controls each of the others;
b) One non-member (whether a body corporate or an
individual) controls all the members; or
c) Two or more individuals (non-member) carrying on a
business in partnership control all of the members.
The main advantage of GST group registration is that any
supply of goods or services by a member of the group to
another member of the group is disregarded for GST purposes.
This reduces the risk of GST being accidentally omitted on
supplies between separately registered related companies.
However, there are some disadvantages and any decision
on whether to group register should be taken with care. For
example, all GST group members are jointly and severally liable
for the GST liability of the group during the period of their
membership.

The GST registration threshold applies to all businesses
regardless of whether it is a resident or non-resident.

your country?
Not at the moment. Although Singapore is not a member of
the OECD, it agrees with the principles and recommendation
proposed by the OECD with regards to the digital
economy. Singapore may take steps to implement OECDs
recommendations with regards to the digital economy.

The tax authority in Singapore requires an overseas entity
(defined as one that is not a resident in Singapore and/or does
not have an established place of business in Singapore) to
appoint a local agent to act on his behalf for GST purposes.

GST returns normally cover an accounting period of three
months, ending on the last day of a calendar month and are
lodged on a quarterly basis.
Businesses may also request for special accounting periods
to coincide with its financial reporting. Businesses that are in a
net refundable position (because of the nature of their activities)
may apply to submit returns on a monthly basis to improve
cash flow. For certain smaller businesses, they may also apply
to submit returns on 6 months basis.
All GST returns have to be submitted within 30 days of the
end of the relevant accounting period, together with any tax
due. Businesses with direct debit arrangement facility (GIRO)
with the tax authority get a further fifteen days (in addition to
the normal 30 days) to pay the tax due.
Singapore

Penalties may be imposed by the tax authority if GST returns
due date.
When payment is not received by the tax authority by
the due date, a 5% penalty may be imposed. A further 2%
additional penalty may be imposed 60 days after the 5%
penalty is imposed, if the tax is still not paid.
The 2% penalty is imposed for each month that the tax
remains unpaid. The total additional penalty that can be
imposed is up to 50% of the tax overdue.

No.

not comply with the GST rules.
additional declarations), or make repeated mistakes.
serious matters.

claimed if they are not registered in Singapore?
No.

A valid tax invoice must show:
the words Tax Invoice in a prominent place
the invoice date
for each description, the quantity of goods or the extent of
services and the amount payable (excluding tax)
any cash discount offered
the total amount payable excluding tax, the rate of GST,

the total tax chargeable and the total amount payable
including tax shown separately (any such amount expressed
in a currency other than Singapore currency, must also be
expressed in Singapore currency)
the breakdown of exempt, zero-rated or other supply,
stating separately the gross amount payable in respect of
each, if applicable.
Where a business makes supplies of goods or services where the
amount invoiced including GST does not exceed SGD 1,000, a
simplified tax invoice can be issued.
Tax invoices can be issued, received and stored in electronic
format and there is no need to obtain prior approval from the
tax authority (provided the conditions as prescribed by the tax
authority are fulfilled). Electronic invoices must contain the
same information as paper invoices. The method used to ensure
the authenticity of origin, the integrity of content and legibility
of the invoices is a business choice and can be achieved by any
For further information on indirect tax in Singapore please contact:
Lor Eng Min
T +65 6805 4127
E engmin.lor@sg.gt.com
Lorraine Parkin
T +65 6805 4110
E lorraine.parkin@sg.gt.com
Shareen Tan
T +65 6805 4134
E shareen.tan@sg.gt.com
South Korea
The standard VAT rate is 10% for most goods and services..
Zero-rating is applicable only to the traders who are residents or domestic corporations. However, in
case of international transportation service by ships or aircraft, the traders who are non-residents or
foreign corporations are subject to zero-rating on a reciprocity basis. Zero rated includes:

goods for exportation

services rendered outside Korea

international transportation service by ships and aircraft

other goods or services supplied for foreign exchange earnings.

to these rates?
No.
Value Added Tax (VAT) is the principal indirect tax in South Korea. It is a tax on consumer expenditure, and
No, there is no registration limit for the tax. The exemption from liability to pay VAT would be allowed to an
individual enterprise whose turnover (including VAT) of the supply of goods or services in a calendar year
is less than KRW 24 million.

Not applicable.

No.
Under the Korean VAT law, a company is required to file a VAT return on a quarterly basis, along with
payment of the concerned VAT, if any. The VAT payable (or refundable) is determined by deducting the
applicable purchase VAT from sales VAT. Furthermore, a company should maintain a purchase and sales
register to support the transactions subject to VAT.

Not applicable.
South Korea
Yes. A range of penalties can be imposed where businesses do not comply with the VAT rules.

Deduction of VAT
VAT on items below are not deductible:

expenditure without tax invoices and with tax invoices on which any information is omitted or incorrect
expenditure with a tax invoice issued upon receipt of the supply of goods or services exempt from
VAT or not subject to the imposition of VAT
expenditure not directly related to business
purchase, hire and maintenance of automobiles not directly used for operating a business
disbursement of entertainment expenses
expenditure related to a tax-free business
expenditure related to land
expenditure before filing an application for business registration.

South Korea.
VAT is an indirect tax which is charged on goods/services
sold within Korea or imports to Korea by individuals or
corporations licensed to carry on business under the Value
Added Tax Law (VATL) of Korea. Any tax paid on inputs
(purchases) can be used as a credit against tax collected in
connection with outputs (sales).
The VAT rate is 10%. Where the tax is applicable on the
VAT exclusive price, the 10% rate is applied. However, in case
of the VAT inclusive price of the retailers, the tax rate becomes
10/110. Where VAT is not separately collected at the time of
the transaction, the tax rate of 10/110 is applicable on the VAT
inclusive price.
Zero-rating
The following goods and services are VAT zero-rated and the
input tax incurred is refundable. Zero-rating is applicable only
to the traders who are residents or domestic corporations.
However, in case of international transportation service by
ships or aircraft, the traders who are non-residents or foreign
corporations are subject to zero-rating on a reciprocity basis. .
Zero rated includes:
goods for exportation
services rendered outside Korea
international transportation service by ships and aircraft
other goods or services supplied for foreign exchange
earnings.
Exemption
The supply of the following goods or services is subject to

exemption:
basic life necessities and services
social welfare services
goods or services related to culture
personal services similar to labour
duty-exempt goods.
The input tax incurred thereon is not refundable, however,
traders may elect not to be exempted.

A trader who newly starts a business is required to register
the required particulars of each business place within twenty
days from the business commencement date. The particulars
may be registered before the business commencement date.
The tax office having jurisdiction over the business place of the
trader will issue a business registration certificate to the trader
concerned.
A registered trader who has suspended or closed down
a business or who has come to recognise a change in any of
registered particulars is required to make a report without
delay to the competent tax office. The same applies when
a trader who has registered prior to the planned business
commencement date fails to actually start their business.
Special care for the administrative burden of VAT
calculation
Under the Korean VATL, the simplified taxation would be

allowed to an individual enterprise under certain circumstances
whose turnover (including VAT) of the supply of goods or
services in a calendar year is less than KRW 48 million. In this
regard, the VAT payable would be calculated as below.
South Korea
VAT payable = A(simplified output VAT) B (simplified input VAT)

A = Turnover (including VAT) in a calendar year x Average rate
of value-added for each category of business (ranging from 5%
through 30%) x Flat rate 10%
B = Input VAT on the tax invoice (if any) x Average rate of valueadded for each category of business (ranging from 5% through
30%)
In addition to the above, under the current VAT law, the

exemption from liability to pay VAT would be allowed to an
individual enterprise whose turnover (including VAT) of the
supply of goods or services in a calendar year is short of than
KRW 24 million.

Under the Korean VATL, the simplified taxation would be
allowed to an individual enterprise.
Neither a non-resident business entity nor a non-resident
individual without a permanent establishment in Korea is
obliged to register for VAT purposes. If necessary, the tax
authorities may give an identification number for administrative
purposes.

No.

your country?
Effective as of 1 July 2015, the revised Korean VATL requires a
foreign service provider to register for and charge VAT on the
supply of electronic services to customers in Korea (A foreign
supplier includes a non-resident or a foreign corporation
without a permanent establishment in Korea).
Definition of electronic service
Electronic service means the supply of:

game, audio, video files, electronic documents or software,
or similar items that are processed by optical or electronic
means and produced or modified in the form of codes,
letters, audio, and video, and any similar items
the upgrade of such electronic service.
Registration requirement
VAT shall apply to electronic services rendered by foreign

suppliers in overseas open market for domestic customers,
which will be regarded as being rendered in Korea. The
registration requirement also applies to a foreign service
provider who directly provides electronic services to its Korean
customers.
The registration is made with the Korean National Tax
Service (NTS) in a simplified way through the NTS website
within 20 days from the date of business commencement.
Compliance
A registered foreign service provider must file VAT returns

and pay VAT on a quarterly basis. The due date of filing is on
or before the 25th day, following a quarter-end month. The
foreign service provider is not required to issue a VAT invoice.

Taxable period
In general, the taxable period for VAT is divided into two

periods the first period from 1 January to 30 June and the
second period from 1 July to 31 December.
The initial taxable period for any trader establishing a new
business is from the starting date of the business to the last
day of the taxable period in which the starting date falls upon.
Where registration is made prior to the commencement of
business, the taxable period begins with the date of registration.
On the other hand, the last taxable period for any trader
liquidating a business shall be from the beginning date of the
taxable period upon which the closing date falls, to the date of
closing.
Tax return and payment
Preliminary return and payment
A trader is required to file a return on the tax base and tax

amount payable or refundable to the appropriate tax office
within 25 days from the end of each preliminary return period.
The first preliminary taxable period is from 1 January through
31 March and the second preliminary taxable period is from 1
July through 30 September.
A trader shall pay the tax amount payable for the
preliminary return period to the appropriate tax office at the
time of filing the return.
Final return and payment
A trader must file, to the competent tax office, a return on the

tax base and the tax amount payable or refundable in respect of
each taxable period within 25 days after the end of the taxable
period concerned.
South Korea
A trader is required to pay the tax amount payable to the

competent tax office at the time of filing the return.

Penalty taxes mentioned below may be imposed by the tax
related tax is not paid by the due date:
late filing of the return: 10% of the tax due
late payment of the VAT due: 0.03% of the unpaid tax
per day.

Not applicable.

Some of the penalty taxes under the VATL in Korea are as
follows:
penalty tax for non-registration: 1% of supply price
penalty tax for late issuance of tax invoice: 1% of supply
price
penalty tax for non-issuance of tax invoice: 2% of supply
price
penalty tax for false tax invoice: 2% of supply price.

claimed if they are not registered in Korea?
Yes, it may be possible to reclaim the VAT incurred in certain
circumstances.
When foreign companies or non-residents (foreign business
operators) with no permanent establishment in Korea, do
business outside Korea, and purchase or receive goods or
services in Korea for their business purposes, the VAT may be
refundable. However, this regulation applies only where the tax
refundable exceeds KRW 300,000.
The following is a list of applicable services:
food or lodging services
advertisement services
electricity and telecommunication services
real estate leasing services
office repairing services (in Korea)
office equipment rental service.
In order to receive the VAT refund, foreign business operators

must submit an application for the VAT refund by 30 June of
the following year with the following attachments:
one copy of the Certificate of Business Register (in English
or Korean only)
one copy of a transaction report
the original copy of the tax invoice (including sales
statements of credit cards, etc. which show the VAT
amount and personal data of the person who received the
supply).

An enterprise supplying goods or services, should issue a VAT
invoice to the purchaser under the Korean VATL. The
contents of the invoice should contain:
Mandatory information requirements
tax identification number and name of goods or service

provider
tax identification number of the purchaser of goods /
services
transaction price and the corresponding VAT amount
date when the invoice is issued.
Non-mandatory information requirements
address of goods/services provider

name of goods/services provider and the address of the
purchaser
business type and business items
name, quantity, and the unit cost of supplied items
other particulars as prescribed by the Presidential Decree.
Effective from 1 January 2010, all corporate taxpayers are
obliged to issue electronic tax invoices, which are transmitted to
the national tax service.
For further information on indirect tax in South Korea please contact:
Dong-Bum Kim
T +82 2 2056 3706
E dongb.kim@dmgt.co.kr
Sang-Il Kim
T +82 2 2056 3713
E sangi.kim@dmgt.co.kr
Joo-Yun Woo
T +82 2 2056 3783
E jooy.woo@dmgt.co.kr
Taiwan
Standard rate of 5% for all taxable supplies not otherwise specified.

Special rates for specified industries:

2% for financial institutions

20/25% for special food and beverage service enterprises

1% for small traders
VAT-exempted: includes certain essential and unprocessed foods, land, post office stamps, hospital
care, educational services
Zero-rated VAT: includes export of goods and services, sales made by duty free shops to
passengers, sales made to business enterprises located in export zone or science park, international
telecommunication related business, sales made by international transportation related business
(subject to the same reciprocal treatment be given by counter country) and others.

to these rates?
No.
The principal indirect tax in Taiwan is value added tax (VAT). It is charged on taxable supplies that take
place in Republic of China (Taiwan).
Article 28 of VAT regulations state The head office of a business entity and its branches with fixed places
of business shall each file an application for business registration individually with the competent tax
authority before commencement of business.

Yes.

Yes, the non-established business entity needs to appoint a business agent to register VAT in Taiwan.
Most businesses are required to submit VAT returns bi-monthly. Based on application this can be changed
to monthly.

Yes. Late returns and late payment are subject to penalties. The penalty is based on 1% of the tax payable
for every two days overdue, provided that the filing is less than 30 days past due. If filing is made after 30
days, there will be other penalties applicable. Late payment of tax is also subject to a 1% surcharge on
late payment for every two days in arrears, starting from the day immediately following the date the time
limit expires.
Taiwan
Not applicable.
Failure to register for VAT or failure to issue Government Unified Invoices in correct manner can also be
subject to penalties.

In general, no.

The main indirect tax in Taiwan is value added tax (VAT).
Article 1, of Value Added and Non-Value Added Tax law
states Business tax, in the form of value-added or non-valueadded, shall be levied in accordance with this Law on the sale of
goods or services within the territory of the Republic of China
(R.O.C.) and the import of goods.
Based on the above, VAT is charged on taxable supplies
that take place in Republic of China (Taiwan). The fact that
one party to the transaction may not be located in Taiwan is
not relevant.
VAT registrants collect the VAT from counter parties to
the transactions and pass on the tax to the government via VAT
filings as required by local law.
Once an application has been approved for the set-up of a
business entity, registrar of a company will automatically pass
on related information to tax office for VAT registration. The
tax office will notify responsible person of the profit seeking
enterprise to report to tax office to purchase the first set of
Government Unified Invoice (GUI) books.
District VAT officers on regular basis will also visit registered
business entities in the district. If a business entity appears to be
non-existing or non-trading, tax officer may at his or her discretion
suspend an entitys right to purchase GUI invoice books.
Through control over the serial numbers on GUI, the
government can track invoices issued by one business to
another. Through cross checking VAT filings to income tax
returns, it is difficult for businesses in Taiwan to
under-report income.

your country?
Yes, there is legislation in Taiwan to tax services provided over
internet. The scope of the legislation is fairly broad and in
most cases will deem the revenue to be Taiwan source income.
Therefore if in doubt, please consult a tax advisor before
concluding business arrangements.
Despite of the above, there is an exception rule relating to
purchase of packaged software for value less than TWD 3.000
each time. For such small value purchase, tax can be exempted.

Article 28 of VAT regulations state The head office of a
business entity and its branches with fixed places of business
shall each file an application for business registration
individually with the competent tax authority before
commencement of business.
Failure to register for VAT is subject to a fine of
NT$3,000 ~ NT$30,000.

As long as the non-established business entity has a permanent
establishment conducting trading activities in Taiwan, then
there is a need to register for VAT.

Yes, the non-established business entity needs to appoint a
business agent to register for VAT in Taiwan. If such person is
not appointed, the following people could be deemed to be the
tax agent for the business entity:
where the agent, in addition to representing its principal in
the purchase of goods, is authorised to regularly represent
the principal in making business arrangements and in
signing contracts
Taiwan
where the agent regularly keeps in store goods of its

principal and delivers the same, for its principal, to others
where the agent regularly accepts, for its principal, orders
of goods.

A VAT filing must be filed at least once every two month and is
due on the 15th day following the end of the period. Zero rated
taxpayer may apply to file VAT on a monthly basis.
Where the VAT refund is needed, the government will give
priority assessment if the VAT filing has been audited by a
CPA firm.
Furthermore, any amount of the above tax or surcharges shall

be subject to interest charge calculated on a daily basis at the
local banks prevailing rate of one-year term time deposit.

Not applicable.

Failure to register for VAT or failure to issue Government
Unified Invoices in correct manner can also be subject
to penalties.


claimed if they are not registered in Taiwan?
Both late returns and late payment of tax are subject

to penalties.
In the event that a business entity fails to file the sales
amount or a detailed list of uniform invoices used within the
time limit, the business entity shall be liable to a surcharge for
late filing or non-filing:
if the filing is less than 30 days past due, the surcharge
shall be equivalent to 1% of the tax payable for every two
days overdue. The administrative fine shall not be less than
NT$1,200 or more than NT$12,000
if the filing is in excess of 30 days past due, the business
entity shall be liable to a non-filing surcharge equivalent to
30% of the tax payable, as determined by the competent
tax authority. The amount of this surcharge shall not be less
than NT$3,000 or more than NT$30,000
where there is no tax payable, the surcharge for
belated filing or non-filing shall be NT$1,200 and
NT$3,000 respectively.
In general, no.
A taxpayer, failing to pay any tax or surcharge for late filing or

non-filing within the specified time limit:
if the payment made less than 30 days past due, it shall be
subject to a 1% surcharge on late payment for every two
days in arrears, starting from the day immediately following
the date the time limit expires
if the payment is late thirty days after the time limit, the
taxpayer shall be pursued for payment of taxes owed and be
fined no more than five times the amount of tax evaded, and
the operation of the taxpayers business may be suspended
by the competent tax authority.

A GUI (VAT invoice) must show:
an GUI number which is unique and sequential
which is pre-printed on invoice book purchased from
the government
the purchasers registered name
the purchasers GUI number
the invoice date
the customers name and GUI number
an item description sufficient to identify the goods or
services supplied
the unit price excluding VAT
item subtotal
the amount of VAT charged expressed in new
Taiwan dollar
the grand total of the transaction.
The GUI number is generally viewed as the identity number of
a business entity in Taiwan.
For further information on indirect tax in Taiwan, please contact:
Jay Lo
T +886 2 2789 0887 ext 314
E jay.lo@tw.gt.com
Taiwan
Thailand
The Value Added Tax (VAT) rate is 7% for most of sales of goods, provision of services and imports.
A zero percent VAT rate includes, but not limited to, the following activities: (a) export of goods
outside Thailand as well as services performed in Thailand and utilized in foreign countries; (b)
aircraft or sea-vessels engaged in international transportation; (c) supply of goods and services to
government agencies or state-owned enterprises; (d) supply of goods and services to the United
Nations and its agencies; (e) supply of goods and services between bonded warehouses or between
enterprises located in a duty free zone (EPZs)
Exempt sales and services includes transactions such as: (a) unprocessed agricultural products
and animals; (b) sale of fertilizers; (c) sale of fish meals and animal feeds; (d) sales of newspapers,
magazines or textbooks; (e) provision of educational services; (f) provision of medical services; (g)
provision of library, museum, or zoological garden services; (h) provision of domestic transport
services

to these rates?
The statutory VAT rate is 10%. However, since its adoption the government has announced a reduced VAT
rate of 7%, most recently in September 2015. The VAT rate will revert to 10% on 1 October 2016 unless
further extended.
VAT is the principal indirect tax in Thailand. It is a broad-based indirect tax on consumption. The liability
for VAT lies with the vendor or the service provider during each stage of production and distribution in
Thailand. Nonetheless, the actual incidence of the tax is normally borne by the ultimate consumer.
Yes. Any person or entity who regularly supplies goods and provides services in Thailand which is not
exempt from VAT is required to register for VAT if its annual revenue exceeds Baht 1.8 million.

No. However, a non-established business however can register for VAT at its option.

If the non-established person desires to register for VAT it must then appoint a VAT agent in Thailand.
The VAT return together with payments, if any, must be submitted on a monthly basis.
Yes. If a VAT return, or the corresponding payment, is submitted late a penalty and a surcharge can be
imposed.

Yes. Where VAT maybe due on a reverse charge basis a separate VAT return and payment must be
made within seven days of the month following the transaction.
Thailand
No. The VAT refund is available only to VAT-registered taxpayers in Thailand.

There are various kinds of input VAT which cannot be claimed including, for example: (a) insufficient proof
that the input VAT was actually paid; (b) the tax invoice contains incorrect or inadequate information; (c)
input tax is not directly connected with the business; (d) input tax originated from entertainment expenses.
Value Added Tax (VAT) is the principal indirect tax in

Thailand. It is a broad-based indirect tax on consumption. The
liability for VAT lies with the vendor or the service provider
for each stage of production and distribution in Thailand.
Nonetheless, the actual incidence of the tax is normally borne
by the ultimate consumer. The transactions subject to VAT
include sale of goods, provision of services and imports.
VAT returns are filed and VAT is paid on a monthly basis
with the filing of a VAT return (Form PP-30). The VAT
amount is generally calculated by the business on the basis of
the selling price or charges at that particular stage. The monthly
VAT liability is then computed by taking the difference
between output VAT accrued on its sales for the month and
any input VAT credits accrued on its purchases, including
credits for prior months. Where the input tax exceeds the
output tax either a request for refund can be made or the excess
input tax can be carried forward into the future without limit.
The tax base of VAT for general goods and services is
the total value received from the supply of goods or services.
In addition, tax base also includes any Excise Tax that has
been collected in connection with such supply (e.g. sale of
motor vehicles). The tax base is exclusive of any discounts or
allowances, but only if the discounts or allowances are clearly
shown in the tax invoice.
services in Thailand:
the general rate (currently 7%)
zero rated (0%)
Any person or entity that regularly supplies goods and

provides services in Thailand which are not exempt from VAT
is required to register as a VAT participant if its annual revenue
exceeds Baht 1.8 million. A service is deemed to be provided in
Thailand if the service is performed in Thailand regardless of
where it is utilised or if it is performed elsewhere and utilized
in Thailand. A person or entity can still register for VAT even
where its annual revenue is lower.
Furthermore, an importer is also subject to VAT in
Thailand no matter whether it is a registered person or not.
VAT will be collected by the customs department once goods
are imported to Thailand.
In addition, an agent who sells goods or renders services
on behalf of a trader not resident in Thailand is responsible
for payment of VAT. For other non-resident traders, persons
responsible for the operation of the business in Thailand on
the traders behalf, have a joint liability with the traders for the
VAT. Otherwise, the resident buyer of the goods and services
from the non-resident trader is required to pay the VAT (selfassessed or inverse VAT).
In the case where a VAT registrant wishes to open an
additional place of business, it must notify the revenue
department office not less than 15 days prior to the date of
opening the additional place of business in order to obtain the
VAT certificate for such place of business.
Furthermore, some goods and services are exempt from VAT.

In such case the VAT registrant may not claim any input tax
credit such that VAT paid is a real cost.
In addition, VAT is also paid at the time of import of
goods into Thailand, with the input tax credit realized by the
importer of record.
All VAT registrants are required to post their VAT
Certificate at their place of business.
Thailand


No. A foreign business that is not established in Thailand and

has no a permanent establishment or an agent in Thailand is not
subject to VAT in Thailand. The foreign business, hence, is not
required to register as a taxpayer in Thailand. However, if the
foreign business carries on its business through a permanent
establishment such as an agent, a subsidiary and a branch in
Thailand, the VAT registration requirements shall be applied.
Furthermore, any person or entity who is liable to register
VAT in Thailand must submit a registration form to the local
Revenue Department Office either before the operation of
business or within 30 days after the businesss income reaches
the threshold.
If a VAT return or the corresponding payment is submitted late a

penalty and a surcharge will be imposed. If the taxpayer fails to file a
tax return or a tax remittance return within the time limit, the penalty
shall be twice the amount of tax payable or due in the tax month.
If the taxpayer files a tax return or a tax remittance return
incorrectly or it contains errors affecting the amount of output
tax, input tax or tax payable, the penalty shall be equal to the
amount of the deficient output tax, the excess input tax or the
tax additionally payable. In addition, the taxpayer must pay the
additional penalty based on the number of days from the end of
the time limit for paying VAT. The penalty rate can be as high
as 20% of tax payable if the payment is made after 60 days from
the end of the time limit for paying VAT.
In addition, a surcharge will be imposed when the taxpayer
fails to pay or remit tax in full within the time limit. The
surcharge is equal to 1.5% per month or fraction thereof of the
amount of tax payable exclusive of penalties.

your country?
No current legislation.

If a non-established business wishes still to register for VAT
at its option, it must appoint a VAT agent to act on its behalf
in the filing of monthly VAT returns. In such case the nonestablished business will then be able to offset any input VAT
incurred for local purchases of goods and services against any
output VAT collected on the sale of goods to Thai customers.

The VAT return together with payments must be submitted
on a monthly basis to the Thai Revenue Department within
15 days from the end of the month in which the VAT liability
arises. A return must be filed regardless of whether there are
any VAT transactions or not.
In case of self-assessed VAT, the VAT return together with
payments must be submitted to the Thai revenue department
at a local office within seven days from the end of the month in
which the VAT liability arises.
For electronic filing of VAT returns a further eight days is
allowed for the filing of the return and payment.
If a taxpayer has several places of business, separate returns
must be filed at each local revenue department office unless the
taxpayer has applied to the revenue department for authority to
file a return and pay tax at a single local office.
There is no another declaration required in Thailand.

Various penalties can be imposed where the taxpayer does
not comply with the VAT rules. These include penalties for
the failure to prepare and deliver a tax invoice to a purchaser;
issuing a tax invoice, a debit note or a credit note without a
lawful right to do so; using of a false tax invoice; failure to keep
the copy of a tax invoice evidencing both input and output
taxes; failure to prepare other records as required by law. The
penalties can be imposed on both the taxpayer and its directors.

claimed if they are not registered in Thailand?
No. The VAT incurred by overseas cannot be claimed if the
business is not a VAT-registered taxpayer in Thailand.
Thailand

A VAT invoice shall contain at least the following particulars:
the word, Tax invoice, in a conspicuous spot
name, address and tax-payer identification number of the
registrant issuing the vat invoice, and place of business as it
appears in the VAT certification (head office or branch no.
0000X)
name, address and tax-payer identification number of the
purchaser of goods or the recipient of services and place of
business as it appears in the VAT certification (head office,
or branch no. 0000X)
serial number of the vat invoice, and of the pad (if any)
name, type, category, quantity, and value of goods and
services
amount of value added tax computed on the value of goods
and services, which shall be clearly separated from such a
value
date of issuance of the vat invoice
any other information specified by the director-general
(ie many documents issued in the same set is required to
contain the passage Document issued as a set).
The above particulars in the VAT invoice shall be in Thai
language with Thai currency unit, and using Thai or Arabic
numerals. However, it is possible to issue the VAT invoice
in English or other languages under the notification of the
director-general of revenue on VAT (No.92).
In addition, a registrant carrying on business of selling
goods or providing services by retail to a large number of
customers shall have the right to issue a summary tax invoice.
However, a registrant carrying on a retail business who wishes
to use a cash registering machine for issuing a summary tax
invoice shall file an application to revenue department for the
use of such a machine.
For further information on indirect tax in Thailand please contact:
Edward Strauss
T +66 (2) 205-8120
E edward.strauss@th.gt.com
Vietnam

Reduced rate of 5% generally applies to the provision of essential goods and services, including clean
water; fertilizer production; teaching aids; books; medicine and medical equipment,; scientific and
technical services; unprocessed foodstuffs; sugar and its by-products; various agricultural products
and services; and social housing.
Zero-rated applies to exported goods and services, including goods and services sold to overseas/
non-tariff areas and consumed outside Vietnam/ in the tariff areas, goods processed for export or incountry export (subject to conditions); construction and installation in overseas and in non-tariff areas;
marine and international transportation services.
Indirect tax exemption applies to certain agricultural products; goods/ services provided by
individuals having annual revenue of VND100 million or below; transfer of land use rights; certain
insurance services; financial and credit services; certain securities activities; medical services;
teaching and training services; transfer of technology, software and software services; imports of
machinery; equipment and material which cannot be produced in Vietnam for direct use in science
research and technology development activities or for prospecting, exploration and development
of oil and gas fields; goods imported for international non-refundable aid, including from Official
Development Aid, foreign donations to government bodies and to individuals; export of unprocessed
mineral products.

Under this treatment, no output Value Added Tax (VAT) shall be charged and the input VAT shall
not be creditable, but considered as deductible expenses for Corporate Income Tax (CIT) purposes.

to these rates?
No.
VAT is the principal indirect tax in Vietnam. It is a tax on consumer expenditure and collected by registered
businesses at each stage of the production and distribution supply chain.
Yes. Entities trading/crafting gold, silver and gems; entities with an annual revenue less than VND1
billion and newly established entities shall declare VAT under direct method; in which, the VAT payable is
equivalent to revenue multiply by specific ratio, depending on the business activities. Otherwise, business
entities maintaining full books of accounts, invoices and documents with (i) annual revenue more than
VND1 billion; and (ii) certain volunteer cases (subject to submission of Notification to the tax authority) shall
declare VAT under the credit method. The VAT payable under the credit method is calculated by output
VAT minus deductible input VAT.

Of note, the VAT credit method can be more beneficial for the business entity that incurs input VAT
frequently during its operations given that the business entity is allowed to claim a VAT refund in the event
if the input VAT is higher than the output VAT.
Vietnam

No. The non-established businesses (eg foreign business individuals and foreign organization) earing
Vietnam-sourced income shall subject to Foreign Contractor Tax (FCT), consist of Value Added Tax and
CIT. There are three methods FCT declaration applicable to the non-established businesses, including
deduction method, direct method and hybrid method (subject to conditions).

Depending on the selection of FCT declaration method, the non-established businesses may need to
appoint a fiscal representative in order to register.
VAT returns can be submitted on either monthly or quarterly basic, depending on its annual revenue.

Yes. If a VAT return, or the corresponding payment, is submitted late, a penalty can be imposed.
No.
Yes. Penalty on incorrect tax declaration/tax evasion shall be imposed in the event of the tax authority
identifying the additional tax liabilities upon the tax audit.

No. VAT incurred by overseas businesses cannot be claimed if they are not registered in Vietnam.
Deduction of VAT
In general, the input VAT is creditable if it meets the following requirements:

relevant to business activities
having sufficient legitimate invoice and vouchers
settlement via forms of non-cash payment for transaction more than VND20 million
paying under the registered bank account.
The input VAT is unable to meet the above criteria is not creditable for VAT calculation purpose, such as
expense having invoice with wrong information of the business entity (i.e. name, address, tax code, etc.).

Value Added Tax (VAT) is an indirect tax applies to products
and services used for production, business and consumption in
Vietnam; as well as on the duty paid value of imported goods;
in which the importer must pay VAT to Customs Authority at
the time of importing goods.
There are four applicable VAT rates in Vietnam, comprising
of goods not subject to VAT, 0%, 5% and the standard rate of
10%, particularly:
Reduced rate of 5% generally applies to the provision of
essential goods and services, including clean water; fertilizer
production; teaching aids; books; medicine and medical
equipment,; scientific and technical services; unprocessed
foodstuffs; sugar and its by-products; various agricultural
products and services; and social housing.
Zero-rated applies to exported goods and services, including
goods and services sold to overseas/ non-tariff areas and
consumed outside Vietnam/ in the tariff areas, goods
processed for export or in-country export (subject to
conditions); construction and installation in overseas and
in non-tariff areas; marine and international transportation
services.
Indirect tax exemption applies to certain agricultural

products; goods/ services provided by individuals having
annual revenue of VND100 million or below; transfer of
land use rights; certain insurance services; financial and
credit services; certain securities activities; medical services;
teaching and training services; transfer of technology,
software and software services; imports of machinery;
equipment and material which cannot be produced in
Vietnam for direct use in science research and technology
development activities OR for prospecting, exploration
and development of oil and gas fields; goods imported for
international non-refundable aid, including from official
development aid, foreign donations to government bodies
and to individuals; export of unprocessed mineral products.
Under this treatment, no output VAT shall be charged and
the input VAT is not creditable, but considered as deductible
expenses for CIT purposes.
Vietnam

The current Vietnamese regulations provide two VAT
calculation methods, as below:
VAT direct method:
The VAT direct method applies to business entities trading/

crafting gold, silver and gems; business entities with an annual
revenue subject to VAT less than VND1 billion; business
entities that do not maintain proper books of account and
foreign organizations or individuals carrying out business
activities in forms not regulated in the Law on Investment; and
newly established business entities that do not voluntarily apply
the VAT credit method.
The VAT payable under VAT direct method is equivalent
to revenue multiply (x) by specific rate, depending on the
business activities, including:
1% is for the business of distribution, supply of goods
3% is for the production, transportation, service associated
with goods construction including of the material
5% is for service, construction exclusive of material
2% is for other business activities.
VAT credit method:
The VAT credit method applies to business entities maintaining

full books of accounts, invoices and documents in accordance
with the relevant regulations, including (i) business entities
with annual revenue subject to VAT of VND1 billion or more;
and (ii) newly established entities that voluntarily to apply this
method cases (subject to submission of Notification to the tax
authority).
Under the VAT credit method, VAT payable is equivalent
to output VAT minus (-) creditable input VAT.
The input VAT is creditable if it meets the following
requirements:
relevant to business activities
having sufficient legitimate invoice and vouchers
settlement via forms of non-cash payment for transaction
more than VND20 million
paying under the registered bank account.
Of note, the VAT credit method can be more beneficial for
the business entity that incurs input VAT frequently during
its operations given that the business entity is allowed to claim
a VAT refund in the event if the input VAT is higher than the
output VAT.

The non-established businesses (eg foreign business individuals
and foreign organization) earing Vietnam-sourced income
shall subject to FCT, consist of VAT and CIT. There are three
methods FCT declaration applicable to the non-established
businesses as bellow:
Deduction method:
This method allows the non-established businesses declaring:

(i) VAT under the approach of crediting the input VAT against
the output VAT, and (ii) CIT at the declaration of revenue
and income similar to the local enterprises application. Of
note, only non-established businesses that meet some criteria,
including FCs adoption of Vietnamese Accounting System, are
allowed to apply this deduction method.
Direct method:
Under this method, the non-established businesss VAT

and CIT will be withheld by the Vietnamese customers
at prescribed rates from the payments made to the nonestablished business. Various FCT rates are regulated under the
nature of activities performed, including:
Industry

Effective Deemed
VAT rate
CIT rate
Trading: distribution, supply of goods,

Exempt
materials, machinery and equipment in Vietnam
1%
Services
5% 5%
Services together with supply of machinery

and equipment
3%
1%
Restaurant, hotel and casino management

services
5%
10%
Construction, installation without supply of

materials or machinery, equipment
5%
2%
Construction, installation with supply of

materials or machinery, equipment
3%
2%
Leasing of machinery and equipment
5%
5%
Leasing of aircraft, vessels (including

components)
Not Specified
2%
Transportation
3% 2%
Interest
Exempt 5%
Royalties
Exempt 10%
Insurance
Exempt 5%
Re-insurance, commission for reinsurance
Exempt
0.1%
Transfer of securities
Exempt
0.1%
Financial derivatives
Exempt
2%
Manufacturing, other business activities
3%
2%
Vietnam
Hybrid method:
This method is a combination of deduction method and direct

method, ie allows the non-established business to declare VAT
using creditable approach and CIT using direct method.

your country?

not comply with the VAT rules, including:
a penalty on incorrect tax declaration leading to the underdeclared VAT liabilities of 20% on the under-declared
VAT liabilities
a penalty on tax evasion from one to three times on the
evaded tax liabilities.
No.

claimed if they are not registered in Vietnam?

No. VAT incurred by overseas businesses cannot be claimed if

they are not registered in Vietnam.
Only a non-established business with the selection of FCT

deduction method and hybrid method is required to appoint
a fiscal representative in order to register; given that under
the direct method, the Vietnamese customers shall declare
FCT return and withhold the relevant FCT payable from the
payment paid to the non-established business for remittance to
the state treasury.

The business entity with an annual revenue more than VND50
billion is required to file VAT return and pay VAT payable
on a monthly basis by the 20th day of the following month.
Otherwise, the quarterly basis with the deadline by the 30th
day of the following quarter shall be applied (inclusive of the
newly established enterprise).

related tax is not paid by the due date, namely interest on late
payment amounting to 0.05% per day.

No.

The business entities may use pre-printed invoices, self-printed
invoices or electronic invoices to declare their VAT liability.
There are stipulated items that must be included and strictly
reflected onto the invoice:
an invoice number which is unique and sequential. The
business entities are required to register/ notify the invoice
issuance to the tax authority
the sellers name, address and tax code
the invoice date
the customers name, address and tax code
the total amount payable in VND, only certain business
activities are allowed to issue invoice in foreign currency
the signature and seal of the seller as well as the signature of
the buyer.
For further information on indirect tax in Vietnam please contact:
Nguyen Hung Du
T +84 8 3910 9231
E hungdu.nguyen@vn.gt.com
Valerie Teo
T +84 8 3910 9235
E valerie.teo@vn.gt.com
Vietnam
Switzerland has
extended Swiss VAT
registration requirements for
non-established businesses. Nonestablished businesses providing
construction work, installation work
or mere work on goods, even if
the goods are not altered, may
now have to register for VAT
The Union
in Switzerland.
Customs Code comes
into force on 1 May 2016,
replacing the Community Customs
Code. This EU-wide legislation will
impact businesses involved
in global trade in goods.

Europe
EU member states
continue to introduce SAF-T
requirements. With effect 1 July
2016, Poland will introduce a SAF-T
requirement, following Austria,
Portugal, France and Slovenia
who already have similar
requirements in place.
Europe
Albania
Standard rate: 20%
Other: 0%
Armenia
Standard rate: 20%
Other: 0%
Austria
Standard rate: 20%
Other: 13%, 10%
Belgium
Standard rate: 21%
Other: 12%, 6%, 0%
Standard rate: 5%
Other: 0%
Cyprus
Standard rate: 19%
Other: 9%, 5%, 0%
Czech Republic
Standard rate: 21%
Other: 15%, 10%
Denmark
Standard rate: 25%
Other: 5%, 0%
Estonia
Standard rate: 20%
Other: 9%
Finland
Standard rate: 24%
Other: 14%, 10%, 0%
France (Corsica1 and Overseas territories2)
Standard rate: 20% (20%1 and 8.5%2)
Other: 10%, 5.5%, 2.1% (13%, 10%, 2.1%, 0.9%)1,
(2.1%, 1.75%, 1.05%)2
Germany
Standard rate: 19%
Other: 7%
Greece
Standard rate: 23%
Hungary
Standard rate: 27%
Iceland
Standard rate: 24%
Ireland
Standard rate: 23%
Italy
Standard rate: 22%
Kazakhstan
Standard rate: 12%
Latvia
Standard rate: 21%
Liechtenstein
Standard rate: 8%
Luxembourg
Standard rate: 17%
Macedonia
Standard rate: 18%
Malta
Standard rate: 18%
The Netherlands
Standard rate: 21%
Poland
Standard rate: 23%
Other: 13%, 6%
Other: 18%, 5%
Other: 11%, 0%
Other: 13.5%, 9%, 4.8%, 0%
Other: 10%, 5%, 4%, 0%
Other: 0%
Other: 12%, 0%
Other: 3.8%, 2.5%
Other: 14%, 8%, 3%
Other: 5%
Other: 7%, 5%, 0%
Other: 6%, 0%
Other: 8%, 5%
Portugal (Madeira1 and Azores2)

Standard rate: 23% (22%1 and 18%2)
Other: 13% (12%1 and 9%2), 6% (5%1 and 4%2)
Romania
Standard rate: 20%
Other: 9%, 5%
Russia
Standard rate: 18%
Other: 10%, 0%
Serbia
Standard rate: 20%
Other: 10%, 0%
Slovakia
Standard rate: 20%
Other: 10%
Spain
Standard rate: 21%
Other: 10%, 4%
Sweden
Standard rate: 25%
Other: 12%, 6%
Switzerland
Standard rate: 8%
Other: 3.8%, 2.5%
Turkey
Standard rate: 18%
Other: 8%, 1%
Ukraine
Standard rate: 20%
Other: 7%, 0%
United Kingdom
Standard rate: 20%
Other: 5%, 0%
Republic of Albania

Zero-rated and exempt exports of goods, international transportation services and related supplies,
as well as supplies of goods and services relating to maritime activities, are zero-rated; there is a list
of exempt supplies of goods and services.

to these rates?
No any recent change is confirmed.
Albanian Value Added Tax (VAT) is the principal indirect tax in Albania. It is applied at each stage
of production and distribution process of a good or service. VAT generally applies to the following
transactions: The supply of goods and services performed by a taxable person in Albania; Importation of
goods into Albania, regardless of the status of the importer; services purchased by taxable persons in
Albania from service providers whose place of business is outside Albania, such services are subject to
the reverse-charge mechanism.
Yes. It relates to the annual turnover of taxable transactions in Albania, and once the limit has (or will be)
reached it is necessary to register. Persons involved in import or export activities must register for VAT
regardless of the amount of turnover.

No. There is no registration limit for businesses that are not established in Albania and they will need to
register as soon as they start to make taxable transactions.

In certain circumstances, a non-established person may be directed by Albanian tax authority to appoint a
fiscal representative.
The tax period is a calendar month.

No. Monthly VAT returns are the only one declaration required.

No. Non-established businesses may not obtain refunds of VAT incurred in Albania.
Republic of Albania

Albania. Value added tax (VAT) shall apply to:
the taxable supplies of goods and services provided by a
person who carries on business activities in the territory of
the Republic of Albania
the imports of goods into the territory of the Republic
of Albania.
A VAT taxable event is to be considered at the time and place
of supply for goods or service.
Time of supply
A supply of goods or services is considered to be performed

at the moment when a receipt is required to be issued or when
goods or services are delivered. If the payment is made before
delivery of goods or services, the moment of supply is the
moment when the payment is made. Special rules apply to
construction companies.
Place of supply
The place of supply of goods is the place where the goods are
delivered or made available by suppliers. The location of a
supply of services is the place where the service actually occurs
and is carried out by the supplier. A supply of services relating
to immovable property is performed where the immovable
property is located, a supply of services of transport, or
services that are included in transport, are performed where the
transport occurs.
Application of Reverse Charge System on the import
of services
For taxable services supplied by a supplier that does not have a

place of business activity in Albania, and where services do not
fall under the categories of international transportation and are
not related to immovable property, the customer (beneficiary of
the services) is considered to have supplied the services to itself
in the course of its business activity. In such cases, the reverse
charge system must be applied by the customer.
VAT payable by a taxpayer for a tax period equals the
VAT on the total taxable value of supplies made during the
tax period, minus any input VAT (including any VAT paid at
import) allowed as a deduction. If the input VAT is higher than
the output, then the difference is a VAT credit which can be
carried forward to subsequent months. Otherwise if the output
VAT is higher than the input VAT, the difference represents
VAT payable to the tax authority.
VAT rates
The VAT standard rate is 20%.

Exports of goods, international transport and services
relating to maritime activities and supplies relating to
international transport are zero-rated. There are exempt
supplies of goods and services stipulated in the Albanian VAT
law. The list below gives examples of exempt supplies of goods
and services, (the lists are not exhaustive):
supply and rent of land and buildings
financial services
postal services
education services
hydrocarbon exploration operations (only for the
research phase)
printing and sale of publications
media advertising
betting, lotteries and gambling
international services
supply of iron and cement, to the construction of
hydropower entities, which, under the respective
agreement, use as raw material for the construction of
hydropower plants
the supply of medicines and medical services
import of machinery and equipment, in order to meet
contracts and investments over 50 million ALL (or
approximately 359,000)
import of machinery and equipment, in order to
achieve the investment contracts in the active processing
and agribusiness
insurance and re-insurance services
supply of organs, blood and human milk.
Taxpayers who carry out VAT activities as well as VAT
exempt activities, can credit only that portion of their input that
corresponded to the VAT subject activities.
Most goods imported into the Albania from outside are
the time of importation. The taxable amount of imported goods
includes transportation and insurance costs, import costs and
any applicable taxes, duties or tariffs.
Input VAT on the certain supplies is not considered
deductible for VAT purposes.
Republic of Albania
VAT deferral scheme
The VAT deferral scheme applies to the importation of

machinery and equipment used for the business purposes of
the Albanian taxpayer, regardless of the type of economic
activity. VAT payment on such machinery and equipment
may be deferred for up to 12 months from the moment of
importation. For projects with an investment implementation
phase of longer than 12 months, deferral of VAT is extended on
fulfilment of requirements set out by the Ministry of Finance
of Albania.

VAT taxable persons are all individuals and legal entities
making taxable supplies and having an annual turnover in
excess of ALL 5 million, in such case, the registration for VAT
purposes is required, except for the supply of professional
services, for which the VAT registration is required regardless
the annual turnover. For individuals and legal entities that
operate in the import/export sector it is mandatory to be
registered, notwithstanding the annual turnover.
An option is available for entrepreneurs to register earlier
or on the beginning of their economic activity.
The Council of Ministers revises the minimum limit when
it deems necessary, taking into account inflation or economic
and administrative factors and replaces it with a new minimum
threshold for VAT registration purposes.
Any VAT registration covers all economic activities of
the person registered. The Albanian VAT law does not allow
group registration.

A non-established business is a business that does not have a
fixed establishment in Albania.
A non-established business that makes VAT taxable supplies of
goods or services in Albania must appoint a VAT representative
to register for VAT, to account for Albanian VAT on the
supplies. The VAT representative must be resident in Albania.
A non-resident taxable person is obliged to register
through a tax representative to pay VAT in Albania, regardless
of whether the value of the supply of service exceeds or no
minimum limit for VAT registration.

When a person is a taxable person for the purposes of VAT
law, but does not have a place of business, or in the case of an
individual, a usual place of residence in Albania, the Ministry of
Finance has the right to ask him to appoint another person as
his tax representative.
The VAT representative must be resident in Albania and
may act on behalf of the taxable person for all purposes related
to VAT and is directly responsible for compliance with all VAT
obligations. In case of a failure to appoint a tax representative,
the obligations and penalties would be paid by the domestic
beneficiary of the supply.
The tax authority in Albania may direct a person to appoint
a VAT representative to act on his behalf for VAT purposes
where the person:
is a taxable person or makes taxable supplies in Albania
is not established and does not have a fixed establishment
in Albania
of residence in Albania.
Example: Services related to immovable properties, a nonresident person provides services related to immovable
property in Albania and does not have a place of business in
Albania, has to register for VAT purposes (through a fiscal
representative) regardless of the value of the services provided.

The tax period is a calendar month. Purchase and sales books
must be submitted monthly by the tenth day of the following
month. VAT returns must be submitted monthly by the 14th
day of the month following the tax period. The deadline for a
VAT payment is the same as the deadline for the filing of
VAT returns.

related tax is not paid by the due date. Each late tax filing
is subject to a penalty in total amount of ALL 10,000. Late
payment of a tax obligation triggers a penalty amounting to 5%
of the tax due for each month of delay, capped at 25% of the
unpaid tax liability. In addition, default interest applies.
Republic of Albania

Not applicable, monthly VAT returns are the only
declaration required.

Inaccurate completion of a tax filing or a tax refund claim is
subject to a penalty of 5% of the undeclared tax liability or the
excess tax refund claimed for each month of delay, capped at 25%
of the relevant tax amount. In addition, default interest applies.
Concealment of tax obligations constitutes a fiscal evasion
and is subject to a penalty of 100% of the tax amount evaded.
Improper administration of sales and purchases books and
documentation is subject to a penalty. The failure to issue a
VAT fiscal invoice for the whole amount of the transaction is
subject to a penalty of 100% of the undeclared and unpaid tax
liability apart from the penalties determined.
A taxpayer, who issues an inaccurate VAT fiscal invoice,
decreasing VAT liability, or increasing the amount to be
reimbursed, is subject to a fine equal to 50% of the reduction
amount and additional taxes with interest calculated in
accordance with the provisions of the tax laws. A taxpayer,
who issues an inaccurate VAT fiscal invoice but has no effect
on the calculation and payment of taxes, will also be punished
with a fine. Criminal proceedings may be brought in the case of
more serious matters, these offenses relate to certain situations,
including, but not limited to, the following:
taxpayers willfully engaging in fiscal evasion
taxpayer not paying taxes to the state budget
taxpayers destroying and concealing important tax
documents and information.

claimed if they are not registered in Albania?
No, it is not possible to reclaim the VAT incurred by overseas
businesses if they are not registered in Albania. Non-established
businesses may not obtain refunds of VAT incurred in Albania.

The general director of the tax authority approves the VAT
invoice format, which is printed and distributed by the tax
authorities or by authorised private entities. VAT fiscal invoice
is compiled in the form prescribed by the Minister of Finance,
and includes:
the sellers name, address and VAT registration number

the customers name, address and VAT registration number
the transporters name, address and VAT registration
number as well as the license plate number of the vehicle
and the time of supply
the invoice date
pre-serial number
the ordinal number
the total amount of VAT charged (expressed in ALL).
the total amount payable, excluding VAT
the total amount payable, with VAT.
services, it must:
or services
A VAT invoice is issued with no less than three copies and is
distributed as follows:
page 1 for the buyer
page 2 and 3 for the seller and the transporter.
At the end, the invoice is marked with the name, surname,
signature and seal of the seller, the name, surname and signature
of the buyer and where there is a transporter, their name,
surname and signature.
For sales made to a customer (non-commercial individual)
the VAT invoice issued by the seller is marked name, surname
and address of the buyer.
The general director of the tax authority has the right to
allow the use of a VAT electronic fiscal invoice other those
pre-printed when the taxable person can demonstrate that his
registration system is computerised and capable of producing
fiscal invoices with a unique serial number for each taxable
transaction and that there is a significant number of customers.
For further information on indirect tax in Albania please contact:
Maja Filipceva
T +389 2 3214 700
E maja.f@grant-thornton.com.mk
Armenia
Standard rate of 20% applies for most goods and services.

Zero rate usually applies for the export of goods and services.
Exempt supply mainly applies to financial transactions.

to these rates?
Not applicable.
Value Added Tax (VAT) is an indirect tax, which is charged on the final consumption of certain goods and
services. It is collected at every stage of production and distribution. In case of import it may be collected
at the border.
New registered legal entities and subdivisions (branches and representative offices) of foreign legal
entities automatically become VAT taxpayers. Turnover tax payers become VAT taxpayers when their
taxable turnover for the past calendar year exceeds a threshold of 115 million Armenian Dram (AMD).

Not applicable.

Not applicable.
As a general rule, VAT returns are submitted quarterly. Taxpayers whose revenue for the previous year
exceeded AMD 100 million should submit their tax return on monthly basis.

Yes. If a VAT return, or the corresponding payment, is submitted late then penalties and a fine will
be imposed.
No.
Yes. The law on VAT defines the conditions under which penalties will be applied.

Not applicable.
The exchange rate defined by Central Bank of Armenia

as of 08 December 2015, 1 USD = 484.6 AMD
Armenia
VAT is a type of indirect tax, which is charged on the final

consumption of certain goods and services in the home market
but is collected at every stage of production and distribution.
Liability for VAT rests with the person supplying the taxable
goods or services. The final consumer bears the actual burden
of the tax and pays on the value added to the goods or services.
Armenia uses the input-output model. An individual
entrepreneur or legal entity (tax agent) accounts for output
VAT after deducting VAT paid on their inputs.
Usually the following transactions are VAT taxable:
the supply of goods and services where the place of supply
is in Armenia (including free of charge or partly free of
charge supply)
the importation of goods.
New registered taxpayers automatically become VAT payable.

Turnover tax payers become VAT taxpayers when their taxable
turnover exceeds AMD 115 million.
There are some peculiarities for becoming VAT payable
irrespective of this threshold, this is when:
the taxpayer imports or manufactures excise tax
taxable goods
the 20% or more of the charter capital of the company
belongs to the other company or entrepreneur (this applies
to both parties)
the 20% or more of the charter capital of the company
belongs to an individual having 20% or more participation
in the charter capital of another company (this applies to
both parties)
the parties are determined as a related parties.
Under the local customs legislation, individuals should pay

VAT when the amount or quantity of imported goods exceeds
limits defined by legislation.
Services supplied in Armenia by non-residents that are not
registered in Armenia are subject to reverse charge VAT.
The Turnover tax payers whose turnover is less then AMD 115
million may voluntarily become a VAT payer by applying to
the tax authorities.

Not applicable.

Not applicable.

As a general rule, VAT returns are submitted quarterly. The
taxpayers whose revenue for the previous year exceeded AMD
100 million should submit their tax return on monthly basis.
A VAT return should be submitted within 20 days
following the end of the reporting period.
Armenia


claimed if they are not registered in Armenia?
The legislation defines the following types of penalties where

the VAT return submission has been delayed:
a penalty of AMD 10,000 to 20,000 for the delayed tax
return submission
a penalty at the rate of 5% of the outstanding VAT amount
will be imposed per each 15 day period after the deadline
(the penalty amount should not exceed the outstanding
VAT amount).
Not applicable.
In cases of late payment of VAT fines, interest will be calculated

at the rate of 0.15% for each day of delay.

No.

The VAT invoice should include the following information:
the invoice number and date
the sellers name and address and VAT registration number
denomination and quantity of goods, or the type and
volume of services
the prices of goods or services as well as the total value
(excluding VAT)
the VAT amount (as a separate line).
For further information on indirect tax in Armenia please contact:
Davit Harutyunyan
T +374 (10) 54 51 48 ext 12
E davit.harutyunyan@am.gt.com
If during the tax audit the tax authorities identify that the tax
liability presented in the taxpayers return is understated, a
penalty at the rate of 50% will be imposed of the assessed tax.
A penalty at double rate of the total amount of the VAT
invoice (including the VAT amount), but no less than AMD
5 million will be imposed for issuing tax invoices on illegally
acquired or copied forms.
Armenia
Austria

Reduced rate of 13 % for example for living animals, works of art or activities of artists.
Reduced rate of 10% for example for food and beverages or rent for dwellings.

to these rates?
The reduced rate of 13% was imposed by 1 January 2016.
Value Added Tax (VAT) is the principal indirect tax in Austria. It is a tax on consumer expenditure, and is
Yes. It relates to the annual turnover of taxable transactions in Austria, and once the limit has (or will be)
No. There is no registration limit for businesses that are not established in Austria and they will need to
register as soon as they start to make taxable transactions. If the foreign entrepreneur makes no supplies
in Austria or makes only supplies for which the tax liability is shifted to the recipient of the supply, then he
may not be obliged to file a VAT return under certain conditions.

In certain circumstances, a non-established person may have to appoint a fiscal representative in Austria.
Most businesses are required to submit VAT returns on a monthly basis.

Yes. Additional declarations have to be submitted in respect of certain supplies made to customers who
are registered for VAT elsewhere in the European Union (EU). Declarations also have to be submitted in
certain circumstances in connection with goods moving to or from the EU.

Austria
Other indirect taxes
VAT is the main type of indirect taxation in Austria and in

other EU countries.
It is also applied to goods and certain services, entering the
stage of the process rests with the business making the supply
ie the sale.
Even if an entrepreneur conducts his business from abroad,
certain transactions may be taxable in Austria (notably the
supply of goods and services, the intra-EU acquisition of
goods, imports). Where the supply of goods occurs in Austria
or the supply of services is made in Austria (ie the place of
supply of goods or services is in Austria) such supply is, in
principle, taxable in Austria as well. The standard VAT rate is
20%, the reduced rates are 13% and 10%.
Most goods imported into Austria from outside the EU
are subject to import VAT. The tax will have to be paid by
the importer at the time of the customs clearance. Where
the importation is for business purposes and the importer
is registered for VAT, it may be possible to reclaim the tax
(subject to certain rules).
and customs duty. Customs duty is levied across the EU at
the place where goods are imported into the community. It
the EU up to the same level as those produced within it. Once
duty (and VAT) has been paid by the importer, the goods are
in free circulation and they can then be released for use in the
home market. Unlike other indirect taxes, such as VAT, once
duty has been paid it is not usually recoverable by the importer.
custom duty.
In addition to VAT, a number of other indirect taxes, both

federal and local, are levied on certain transactions with specific
products. An excise duty is levied on mineral oil, tobacco,
alcohol and alcoholic beverages.
Means of transport
Furthermore, a turnover tax (Normverbrauchsabgabe) is levied

on the supply of cars and motorcycles, mainly designed for
the transport of passengers, which have not been licensed for
general traffic. The taxable event is defined as either the supply
to the final consumer or the first licensing of the passenger car
for general traffic. A number of exemptions are provided for
(eg export supplies). The tax rate depends on the volume of
of CO2 emissions.
Other transactions subject to the following indirect taxes
are in principle exempt from VAT:
the immovable property acquisition tax
(Grunderwerbsteuer), which is levied on the transfer
of immovable property in Austria. The normal tax rate
amounts to 3.5%, with lower rates applying to donations
and heritages
insurance tax (Versicherungssteuer) on the consideration for
insurance protection on the basis of an insurance contract.

supplies of goods or services in the course business must
register for VAT if the value of its taxable supplies in Austria
exceeds the annual registration limit, or is expected to
exceed the limit in the near future. A business can register
on a voluntary basis even if the registration limit has not
been exceeded.
Austria
Two or more corporate bodies can be registered as a VAT

group (Organschaft):
each of the corporate bodies needs to be established, or has
a fixed establishment in Austria
any legal entity that is controlled by a third party may
qualify as an integrated company. A legal entity is not
considered independent if that legal entity and its decisions
are controlled or determined by the will of another
entrepreneur to an extent that the legal entity lacks the
capacity of self-determination (financial, economic and
organisational integration).
If a fiscal unity is established, the business activity of the
integrated company is attributed to the parent company: the
business of the integrated company and the parent company
form one single enterprise for VAT purposes. The VAT returns
filed by the parent company also comprise of the enterprise
of the integrated company and its taxable supplies. Supplies
between the integrated company and the parent company and
vice versa are not taxable, ie they are outside the scope of VAT.
A corporate body cannot be treated as a member of more
than one VAT group at a time.
The main advantage of a VAT group registration is that,
apart from a few limited exceptions, any supply of goods or
services by a member of the group to another member of the
group is disregarded for VAT purposes. This reduces the risk of
VAT being accidentally omitted on supplies between separately

who are not established in Austria. For businesses making
taxable supplies in Austria, they will need to register for VAT
as soon as they commence trading in Austria, irrespective of the
level of turnover.
If the foreign business makes no supplies in Austria or
only makes supplies for which the tax liability is shifted to the
recipient of the supply, then they are obliged to file a VAT
return in cases where:
they owe a tax as the recipient of the supply
they owe a tax on the basis of invoicing under Sec. 11 (12)
and (14) of the VAT Act
they are requested to file by the tax office
due to the reverse-charge system.
Registration for VAT in Austria may also be required where a

non-established EU business is involved with distance selling.
Distance selling occurs when a taxable supplier in one EU
country supplies and delivers goods to a customer in another
EU country who is not registered or liable to be registered
for VAT. Such customers are known as non-taxable persons,
and include private individuals and businesses and other
organisations that are not registered for VAT (either because
of their size, or the fact that they are exempt from having to
register due to the nature of their activities). The common
examples of distance sales are goods supplied by mail order and
via the internet.
Each EU country has the option of applying a distance
selling threshold of either 35,000 or 100,000 per calendar
year, or the equivalent in its own currency. Austria has adopted
an annual threshold of 35,000.
Distance sales from another EU country to non-taxable
persons in Austria will be subject to VAT at the appropriate
rate in the suppliers country. However, once the value of those
distance sales to Austria exceeds the Austrian threshold of
35,000:
the supplier becomes liable to register for VAT in Austria
Austria becomes the place of supply
any further sales to customers in Austria are subject to
Austrian VAT.
Suppliers can choose Austria as the place where the goods
are supplied by registering for VAT voluntarily before the
threshold is reached.
Is there any specific legislation to tax non-resident supplies
of electronically supplied/digital services to private consumers
resident in your country?
Electronically supplied services and digital services to
private consumers resident in Austria are taxable where the
consumer resides.

A person needs to appoint a VAT representative in Austria to
act on his behalf for VAT purposes if:
the person is established in a country or territory which is
not an EU country (or part of such a country)
it appears to the Austrian tax authority that there is no
provision for mutual assistance similar to that which
provided between Austria and other EU countries
the person makes deliveries or services to
non-taxable persons
the person makes intra-community deliveries
or acquisitions.
Austria

calendar month (pre-declaration period). The period amounts
to the quarter of a calendar year (three calendar months) if
the entrepreneur effected supplies of goods and services and
self-supplies the basis of assessment of which did not exceed
100,000 in the preceding calendar year. It is, however, possible
to opt for a monthly pre-declaration period for the entire
assessment period if the entrepreneur files a pre-declaration in
time for the first calendar month.
The entrepreneur must file a pre-declaration of VAT with
the competent tax office by the 15th day (due date) of the
calendar month which is the second month following the end
of the pre-declaration period (calendar month) for the levying
of VAT in respect of that entrepreneur. The pre-declaration is
treated as a tax return. The entrepreneur must effect payment of
VAT as assessed for the purposes of the pre-declaration on the
due date.
The obligation to file a pre-declaration is waived if:
the entrepreneurs turnover of the preceding year did not
exceed 30,000 and the prepayment calculated is paid by the
due date or if no prepayment is due
the entrepreneur effects only tax-exempt supplies and no
prepayment or input tax surplus arises for the respective
pre-declaration period.
Businesses that are registered for VAT in Austria, and make

supplies of goods or services to traders registered for the tax in
other EU countries are required to complete and submit EC
Sales Lists (ESLs). The ESLs must show details of the recipients
of the goods and services.
Generally, the ESLs must be submitted each calendar
month. Only if the entrepreneur files quarterly (instead of
monthly) VAT returns the ESLs must be submitted quarterly
as well.
In addition, if the value of the intra-EU trade in goods
dispatched or arriving from other EU state is above an annual
threshold, a supplementary declaration (referred to as an
Intrastat declaration) has to be submitted for either or both.
These declarations have to be submitted on a monthly basis.
However, a pre-declaration must be filed if the entrepreneur is

instructed by the tax office to do so.
The entrepreneur must effect the prepayment within the
time limit prescribed for the filing of the pre-declaration.

If the pre-payment is not effected on time, a penalty for late
payment (Sumniszuschlag) amounting to 2% of the VAT not
paid on time will be assessed.
If VAT returns are not filed in time and this failure
is not excusable, the tax authority may impose a penalty
(Versptungszuschlag) amounting up to 10% of the
assessed VAT.

Penalties can also be applied where a business has failed to
serious matters.

claimed if they are not registered in Austria?
Yes, it may be possible to reclaim the VAT incurred in
certain circumstances.
Two schemes exist, one for businesses established in the EU
and another for businesses established elsewhere.
VAT-refund for foreign entrepreneurs who are established
within the EU
Foreign entrepreneurs who are established within the EU,

but who have neither their registered office nor a fixed
establishment within the Austrian territory may claim their
input VAT in electronic form via the national electronic
system of the member state of fixed establishment (Art 7 of the
directive 2008/9/EC) if they:
make no taxable transactions in Austria
effect only tax-exempt transport of goods or only taxexempt transport of passengers by ship or aircraft
make only supplies for which the tax liability is shifted to
the recipient of the supply (supplies under the reverse charge
system according to the second sentence of Sec.19 (1))
Austria
The amount refundable is determined by the deduction rules

that apply in the country making the refund.
The refund period must not cover more than one calendar
year or less than three calendar months (unless it is covering the
remainder of a calendar year). The claim has to be made
by 30 September of the year following that in which the VAT
was incurred.
VAT-refund for foreign entrepreneurs who are not
established within the EU
Foreign entrepreneurs who are not established within the EU

and have neither their registered office nor a fixed establishment
within the Austrian territory, may claim their input VAT
by completing the forms as noted below and enclosing the
original invoices and imports documents for which the refund
is requested in original and forwarding them to the Austrian tax
office Graz-Stadt if:
they make no taxable transactions in Austria
they effect only tax-exempt transport of goods or only
tax-exempt transport of passengers by ship or aircraft
they make only supplies for which the tax liability is
shifted to the recipient of the supply (supplies under the
reverse charge system according to the second sentence of
Sec.19 (1))
they render only electrical services from a third country
to non-entrepreneurs and have applied the special scheme
under TITLE XII Chapter 6 of the VAT Directive
2006/112/EC.
The claim form, the certificate of entrepreneurial status, the
invoices and import documents must be sent as originals to the
tax office before the 30 June the following year.
The amount to be refunded must at least be 400. This does
not apply if the refund period is the calendar year or the last
period of a calendar year. For these refund periods the amount
to be refunded must be at least 50.

If the invoice does not contain all of the following data, it will
be insufficient for the credit of input tax:
the name and the address of the entrepreneur performing
the supply of goods or services
the name and the address of the customer (recipient of the
supply of goods or services)
the VAT identification number of the recipient provided
that the consideration exceeds 10,000, the supplying
entrepreneur has place of residence or fixed establishment in
Austria and the recipient is an entrepreneur
the amount and the commercially used description or name
of the supplied goods and/or the type and the scope of the
supplied services
the date of the supply of goods or services or the period
over which the supply of services extends
the consideration for the supply, the applicable VAT rate
and in the case of an exemption, a reference that the supply
is subject to an exemption rule
the amount of VAT payable on the basis of the
consideration in euros
the date of the issuance of the invoice
a consecutive number in one or more numerical sequences
which is assigned only once for the purpose of identifying
the invoice; foreign entrepreneurs need their own number
range for supplies in Austria
the VAT identification number of the issuer of the invoice;
the obligation to indicate the VAT identification number
exists only where the entrepreneur makes supplies of goods
or services which entitle to deduction of input VAT.
Where an invoice does not exceed 400, the name and address
of the recipient is not a prerequisite and it is sufficient for the
total amount (consideration including VAT) and the rate of
VAT to be referred to separately.
an electronic format and there is no need to inform the
tax authority. Electronic invoices must contain the same
For further information on indirect tax in Austria please contact:
Karl Newertal
T +43 1 26262 38
E karl.newertal@at.gt.com
Austria
Belgium

Reduced rate of 12% for some goods and services including restaurant and catering services (drinks
excluded), coals and solid fuels derived from coal, phytopharmaceutical products, margarine, tyres
for agricultural machines, housing as part of social policy.
Reduced rate of 6% applies for most food and drinks, pharmaceutical products and medical
aids, printed newspapers, magazines and books (including illustrated ones), original works of art,
automobiles for disabled persons, renovation works with respect to old buildings, renting of furnished
lodgings with or without breakfast by hotel operators, the granting of the right to enter institutes for
cultural, sport or entertainment purposes (eg concert tickets).
Zero rate applies to a very limited number of goods (under certain conditions: newspapers and
magazines appearing at least 48 times a year, scrap and recycling products).

to these rates?
No.
Value Added Tax (VAT) is the principal indirect tax in the Belgium. It is a tax on consumer expenditure and
is collected on business transactions, imports and intra-EU transfer of own goods (eg stock transfer).
In principle, no. However, for companies established in Belgium there is a special regime, the so-called
small enterprises regime. Small enterprises whose annual turnover is below 25,000 (excl. VAT) can
benefit from a VAT exemption on the performed supplies of goods and services (with no VAT deduction
right).

No. In principle there is no registration limit for businesses that are not established in Belgium and they
will need to register as soon as they start to make taxable transactions. However, for occasional/one-off
transactions a simplified procedure exists with a licence for non-registration and filing of a special (one-off)
VAT return. For businesses involved with distance sales made to Belgian consumers (B2C) a threshold of
35,000 (excl. VAT) applies (eg for mail order and internet sales).

Only companies established outside the EU are obliged to appoint a responsible (fiscal)
representative. EU companies can choose between a direct VAT identification and appointing a
responsible (fiscal) representative.
Belgium
In principle, a monthly VAT return has to be submitted. However, if the annual turnover realized in Belgium
does not exceed 2.5 million (250,000 for specific business sector), then quarterly VAT returns may
be filed (by option). If in the course of a quarter, the amount of the intra-community supplies exceeds
50,000, a monthly VAT return and ESL return has to be submitted.

If a VAT return is submitted late then a penalty between 100 and 1,000 can be imposed. For late
payment, a VAT interest can be charged at 0.8% per month as well as a 20% VAT penalty. If several VAT
returns are outstanding a special VAT account can be created by the Belgian VAT authorities. In the latter
case, both the 20% VAT penalty and the interest for late payment will be claimed.
For EU-trade: additional declarations have to be submitted in respect of certain supplies made to
taxable customers VAT registered in another EU country (so-called ESL return). In addition, a statistical
declaration will have to be submitted if certain thresholds are met for arrival of goods (so-called intrastat
arrival) or dispatch (so-called intrastat dispatch).

For non-EU trade: declarations also have to be submitted in certain circumstances in connection with
goods moving to or from the EU (export or import declaration).

For local Belgian trade: an additional Belgian declaration has to be submitted for local sales in
Belgium invoiced to a taxable customer with a Belgian VAT number (the so-called yearly Belgian
sales listing).
For a range of errors and omissions resulting in non-compliance with the VAT rules, administrative VAT
penalties can be imposed. There are two types of VAT penalties:
1. (reduced) proportional penalties.
2. lump-sum penalties.
In addition to the penalties, an interest for late payment is charged at 0.8% per month. In cases of
spontaneous VAT correction (ie prior to any intervention/question from any tax authority) no proportional
penalty will be due, but only the lump-sum penalties. In principle, the non-reduced proportional penalty
amounts to 200% of the VAT (eg non-payment of VAT due, irregular recovery of VAT, non-issue of sales
invoices or issue of incorrect sales invoices, incorrect import documents). The lump-sum penalties are
generally between 50 and 5,000, eg late filing of the VAT return. Under certain conditions, reduced
proportional penalties are foreseen in the VAT legislation.

In certain circumstances and subject to certain conditions (when no taxable turnover in Belgium) a VAT
refund request can be submitted by both EU (procedure under Directive 2008/09/EC) and non-EU
businesses (13th Directive 86/560/EEC). For both EU and non-EU businesses the request should be
submitted before 30 September of the year following the year of the expenses. In Belgium it is not
required that the concerned non-EU country would allow a similar VAT refund of incurred non-EU VAT
for a Belgian company (no reciprocity condition).

the Belgium and in other European Union (EU) countries.
It is also applied to goods and certain services entering or
located in Belgium. Although VAT is ultimately borne by the
for charging, collecting and paying it to the tax authority at
each stage of the process rests with the business making the
supply of goods or services.
A transaction is within the scope of Belgium VAT and

should be reported in the Belgian VAT return if the following
conditions are met:
it concerns one of the four taxable transactions: supply
of goods, supply of services, intra-community supply,
importation. A supply of goods is defined as the transfer
of the power to dispose over a good pursuant to a contract
for consideration. A supply of services is defined as any
transaction which is not considered as a supply of goods.
Intra-community supply is a supply of goods with
transportation of the goods to another EU member state.
Importation of goods means that the non-EU goods are
brought in free circulation and they can then be released
for use in the home market
it takes place in Belgium
it is made by a taxable person
Belgium
A business registered for the VAT will charge VAT (output

VAT) on its sales (unless payment of the Belgian VAT is shifted
to the co-contractant) and will incur VAT (input VAT) on its
purchases (including any VAT paid at importation). The difference
between the output VAT and the deductible input VAT in each
accounting period (ie month or quarter) will result in either a:
a VAT amount payable by the business to the
VAT authority
VAT credit amount, for which a refund can be claimed at
the end of the quarter
zero balance (eg only incoming transactions for which the
VAT should be self-accounted for and only VAT exempt
outgoing transactions).
There are four rates of VAT that are applied to goods and
services in Belgium; the standard rate (21%), the reduced rate
(6%), intermediate rate (12%) and a zero rate. Also a range
of VAT exemptions apply, some with a VAT deduction right
(such as export, intra-community supplies) and some with no
VAT deduction right (such as financial and insurance services,
medical services, rent of real estate (with exceptions), cultural
and sport related services). Businesses that make exempt
supplies are unable to claim all of the input tax that they incur,
so the VAT paid to suppliers will be a real cost.
Most goods imported into Belgium from outside the EU are
subject to VAT. The import VAT will have to be paid by the
importer at the time of importation. Where the importation is
for business purposes and the importer is registered for VAT, it
may be possible to reclaim the VAT via the Belgian VAT return
(subject to certain rules). Under certain conditions an import
VAT deferral licence (so-called ET 14.000 licence) can be
requested. This basically means that the import VAT due is to
be declared by the importer under a self-assessment scheme:
the VAT payable and deductible VAT will be mentioned in the
same Belgian VAT return. This system avoids pre-financing of
the Belgian VAT by the importer.
duty has been paid it is usually not recoverable by the importer.
customs duty.

In Belgium there is no registration limit for VAT. As such a
person who either makes or intends to make taxable supplies
of goods or services in the framework of a business activity
must register for Belgian VAT purposes. For occasional/oneoff transactions a simplified procedure exists with licence for
non-registration and filing of a special (one-off) VAT return.
In such cases, no Belgian VAT number will be assigned and
Belgian input VAT will be recoverable via the special (one-off
or few) VAT return.
However, for companies established in Belgium there is
a special regime, the so-called small enterprises regime. Small
enterprises whose annual turnover is below 15,000 (excl.
VAT) can benefit from a VAT exemption on the performed
supply of goods and services (with no VAT deduction right).
The Belgian tax authorities have announced an increase of this
threshold to 25,000 from 1 January 2016 (this has not yet been
implemented in the legislation).
A lump-sum penalty may be imposed by the tax authority
if a business fails to register at the correct time, as well as lumpsum penalties per VAT returns, yearly sales listing and intracommunity supplies not submitted for the related period.
For these purposes, a person includes any legal entity, also
non-profit organisations which meet the other conditions for
being regarded as acting in a business capacity are subject to
VAT. Two or more corporate bodies can be registered together
as a VAT group if:
each of the bodies is established, or has a fixed
establishment, in Belgium
they satisfy the three control and links test, i.e. financial,
organisational and economical link
all bodies should qualify as VAT taxable persons. One
single VAT return should be submitted for the VAT group.
A corporate body cannot be a member of more than one VAT
group at a time. The main advantage of VAT group registration
is that in principle any supply of goods or services by a member
of the group to another member of the group is disregarded for
VAT purposes. This results in advantages of (1) VAT optimised
structuring for immovable property within the group, (2)
avoidance of (double) VAT deduction limitation, (3) optimising
of VAT pre-financing and (4) avoidance of VAT risk for intragroup transactions. There are also some disadvantages, for
example, all VAT group members (including former members)
are jointly and severally liable for the VAT debt of the group
during the period of their membership. Consequently, any
decision on whether a VAT group is opportune should be
taken with care.
Belgium

All non-established businesses will need to register for VAT as

soon as they commence trading in Belgium, irrespective of the
level of turnover (except for distance selling).
For occasional/one-off transactions a simplified procedure
exists with licence for non-registration and filing of a special
(one-off) VAT return. In such case no Belgian VAT number
will be assigned and Belgian input VAT will be recoverable via
the special (one-off or few) VAT return.
In some cases a special registration procedure can be applied
for organisers of events such as conferences in Belgium. One of
the conditions to apply this special procedure is that the Belgian
turnover can not be more than 200.000 on a yearly basis. In
such case, special returns will have to be filed to pay the VAT
due and deduct the incoming VAT.
Registration for VAT in Belgium may also be required
where a non-established EU business is involved with distance
selling.
Distance selling occurs when a taxable supplier in one
EU country supplies and delivers goods to a non-taxable
customer in another EU country who is not (liable to be) VAT
registered. Non-taxable customers include private individuals
and businesses and other organisations that are not registered
for VAT (either because of their size or the fact that they
are exempt from having to register due to the nature of their
activities). Under a certain threshold these distance sales will be
subject to VAT at the appropriate rate in the suppliers country.
Each EU country has the option of applying a distance selling
threshold of either 35,000 (excl. VAT) or 100,000 (excl.
VAT) per calendar year, or the equivalent in its own currency.
Belgium has adopted an annual threshold of 35,000 (excl.
VAT). Suppliers can opt to make Belgium the place of supply
before the threshold is reached (by means of voluntary VAT
registration). In any case, once the value of those distance sales
to Belgium exceeds Belgian threshold:
the supplier is obliged to register for VAT in Belgium
the place of supply is Belgium
any further sales to non-taxable customers in Belgium are
subject to Belgium VAT.
Foreign companies that perform taxable transactions in

Belgium in principle need to obtain a Belgian VAT number. In
principle an individual VAT number is required. In that respect,
EU companies can choose between a direct VAT identification
and appointing anfiscal representative. Non-EU companiesare
obliged to appoint afiscal representative.
For certain limited transactions instead of requesting an
individual VAT number the Belgian VAT reporting can be
done under a special global VAT registration number (BE
0796.5 or BE 0796.6) assigned to a global fiscal representative.
This is the case for example for:
importation followed by a local supply of the same
(untreated) goods
non-community goods sold under a VAT
warehouse regime.
Under this system the global VAT representative will submit a

single VAT return for multiple taxable persons.
For occasional/one-off transactions a simplified procedure
exist with licence for non-registration and filing of a special
(one-off or ew) VAT return (see above).

Belgium?
With effect of 1 January, 2015, Article 21bis 2, 9 of the
Belgian VAT-Code was amended in line with article 5 of
Directive 2008/8/EC. The practical implementation of the
MOSS-regime is set forth in Administrative Decision ET
126.947 dd 22 December 2014.
The place of supply rules for electronically supplied
services supplied to private consumers (B2C) changed from the
Member State where the supplier is established to the Member
State of the consumer. This Member State determines amongst
others the applicable VAT rate.
According to the new rules, suppliers have the choice to
either register for VAT in each Member State where their
customers reside, or elect to register under the EU VAT MOSS
simplification scheme in a single Member State.
Belgium
A taxable person can operate MOSS in Belgium in

following cases: (1) Taxable person with head office in Belgium;
(2) Taxable person with head office outside EU, but with
permanent establishments in EU including Belgium; (3) Taxable
person with head office outside EU, without permanent
establishment in EU.
The MOSS cannot be used to report local sales to customers
in a Member State in which suppliers of electronically supplied
services are established.

In principle, a monthly VAT return has to be submitted.
However, if the annual turnover realised in Belgium does
not exceed 2.5 million quarterly VAT returns may be filed
(option). At the moment that the amount of intra-community
supplies of goods exceeds the threshold of 50,000 per quarter,
monthly ESLs and monthly VAT returns have to be submitted.
For companies trading in certain products a monthly
VAT return is obligatory if the annual turnover is more than
250,000 (ie energy products, mobile telephones and computers
and their peripherals, accessories and components, as well as
land vehicles).
All VAT returns have to be submitted within 20 days after
the end of the relevant accounting period (month or quarter),
together with any VAT amount due. Where VAT recoverable
exceeds VAT payable, a refund of VAT will, in principle, will
de by the VAT authorities on a quarterly basis (a special box is
to be ticked in the VAT return).
Businesses that are regularly in a net repayment position
(because of the nature of their outgoing activities) can ask for
a monthly VAT recovery licence. This will be the case when
a taxable person mainly exports or supplies goods to other
member states, but also in cases where a refund position is
caused by reverse charge, an authorisation may be granted for
monthly refunds (license for monthly VAT refund).
Where VAT payable exceeds VAT recoverable, the
difference must be paid by the 20th of the month following the
tax period (month or quarter). For a quarterly VAT payer,
two monthly instalments are also due on the 20th of the second
and third month of each quarter. These instalments amount
to one third of the VAT due for the preceding quarter. A
balancing payment for the quarter is then made when the return
is submitted.

For the late filing of a VAT return the Belgian VAT authorities
can impose a VAT penalty of 100 per VAT return with a
maximum of 1,000. For late payment of the VAT amount
due in principle (only) an interest for late payment at 0.8% per
month will be imposed. Please note the VAT code also foresees
that a VAT penalty of 20% can be imposed. If several VAT
returns are outstanding a special VAT account is opened. As
from this date, the VAT penalty of 20% on the VAT amount
due will in practice be claimed and is accumulated with interest
for late payment at 0.8% per month. In such cases the directors
are jointly and severally liable with the company.

Businesses that are registered for VAT in Belgium and make
supplies of goods or services to traders registered for VAT in
Sales Lists (ESLs). The ESLs must mention the VAT number of
the recipients of the goods and services.
At the moment that the amount of intra-community
supplies of goods exceeds the threshold of 50,000 per quarter,
monthly ESLs have to be submitted. Below the threshold,
quality ESLs may be submitted (by option) unless the company
is obliged or is filing monthly VAT returns (threshold of 2.5
million). The ESL has to be filed no later than the 20th of the
month following the month or quarter concerned. Where a
VAT payer has no supplies of goods and/or services to other
member states, no ESL must be filed for that particular month
or quarter.
dispatched (1,000,000) or arriving (1,500,000) from other
EU is above the annual threshold, a supplementary declaration
(so-called intrastat arrival and dispatch declaration) has to be
submitted for either or both. These declarations have to be
submitted on a monthly basis.
Finally, each year a VAT listing of the supplies to Belgian
customers registered with VAT in Belgium has to be filed
(so-called yearly sales listing). This list includes the following
information:
the VAT number of the clients
the total turnover per client
the total amount of VAT.
Belgium
In case of a VAT group, each member of the VAT group

should file their own annual sales listing. This list must be filed
by 31 March of the year following the year concerned (at the
latest). If no supplies to Belgian customers registered with VAT
in Belgium have been made during a year, the VAT authorities
must be informed (via a box in the VAT return or nil yearly
sales listing).

For a range of errors and omissions resulting in noncompliance with the VAT rules, administrative VAT penalties
can be imposed. There are two types of VAT penalties:
(reduced) proportional penalties and lump-sum penalties. In
addition to the penalties interests for late payment at 0.8% per
month can be claimed. In cases of spontaneous VAT correction
(ie prior to any intervention/question of any tax authority) no
proportional penalty will be due, but the lump-sum penalties
will remain due.
In case the infraction was committed with the intention
to evade VAT or to facilitate VAT evasion the 200% VAT
penalty will be claimed. In other cases, reduced proportional
VAT penalties apply ranging between 5% and 100% (for some
breaches a difference is made whether it concerns the first,
second or next breaches). Criminal proceedings and
penal sanctions may arise in the case of more serious matters
(eg fraud).
The Belgian VAT legislation foresees amongst others the
following VAT penalties:

Penalty
Non (or late) payment of Belgian VAT

20%
Non-issuance of an invoice
100%
For certain incorrect invoice statements
100%
No import document is made up
25%
For incorrect application of the reverse charge mechanism
20%
For incorrect VAT deduction
10%
For the non-reporting of transactions (without VAT due)
10%

Additional penalties
Lump-sum penalties ranging between 50 and 5,000 are foreseen for other
breaches of the VAT code. The penalty will depending on the nature and
severity of the breach (eg 3,000 for the non-filing of the yearly sales listing,
mistakes regarding obligatory (but not highly essential) invoice statements
(250 per invoice with a maximum of 5,000 per breach). For instance failure
to maintain adequate records, provide information (including answering to
questions of the VAT authorities) or (repeated) mistakes in the VAT reporting.

claimed if they are not registered in Belgium?
Only in case a foreign company is not obliged to register for
VAT purposes in Belgium it may be possible to reclaim the
VAT incurred in certain circumstances and considering Belgian
VAT deduction limitation rules.
(procedure under Directive 2008/09/EC, formerly 8th Directive
procedure) and another for businesses established outside the
EU (13th VAT Directive 86/560/EEC). In both cases the claim
has to be made by 30 September of the year following that in
which the VAT was incurred. The claim period in Belgium
is from 1 January to 31 December each year (or at least per
quarter with exception for the remainder of the year).
Businesses established in the EU
The EU cross border refund scheme is available in all EU

member states, and enables a business established in another
EU country to recover Belgian VAT incurred. To be eligible to
make a claim, the claimant must be a taxable person established
in an EU member state other than the one from which the claim
is to be sought. In addition, the claimant:
1. may not be registered, liable, or eligible to be registered in
the member state from which he is claiming the refund
2. may not have a fixed establishment, seat of economic
activity, place of business or other residence there.
Belgium
The claim is submitted electronically in the country of

establishment and will subsequently be sent over to the VAT
authority from whom the repayment is being sought. The
refund period must not cover more than one calendar year
or less than three calendar months unless it is covering the
remainder of a calendar year. The minimum amount for a
refund application is 400 (unless if the application relates
to a total calendar year or the remainder of a calendar year:
minimum of 50). The amount that is refundable is determined
by the Belgian VAT deduction limitation rules. The general
threshold for the submission of an electronic copy of an invoice
is where the taxable basis on the invoice or import document
is 1,000 or more (250 for invoices relating to fuel costs). The
serial number used in the application form should be included
on the documents.
Businesses established outside the EU
Businesses established outside of the EU can, subject to certain

conditions, also reclaim the VAT incurred on imports into
Belgium or purchases of goods and services used in Belgium.
The scheme is available to any person carrying on a business
when being established outside the EU, provided that in the
period of the claim:
1. they were not registered or liable to be registered for
VAT in Belgium
2. they were not established in any EU country.
The minimum amount for a refund application is 200 (unless if
the application relates to a total calendar year or the remainder
of a calendar: minimum of 25). A specific paper claim form
has to be submitted to Belgium VAT authority no later than 30
September of the next year.

the sellers name and address and VAT registration number
the invoice date
the date of taxable event if this differs from the invoice date
the customers name, address and VAT identification
number (if any)
per VAT rate the total amount of VAT charged expressed
in Euros.
the total amount payable (taxable amount), excluding VAT.
services, it must:
reference the reason for not charging VAT (such as
reference to the article of VAT exemption in the Belgian
VAT code or VAT Directive)
reference btw-verlegd reverse charge if the VAT is due by
the co-contractant
Electronic invoices must contain the same information as
paper invoices.. The method used to ensure the authenticity of
origin, the integrity of content and legibility of the invoices is
a business choice and can be achieved by any business controls
which create a reliable audit trail between an invoice and a
supply of goods or services. There is no need to ask for a special
license to the VAT authorities
Special rules apply for electronic archiving of sales and
purchase invoicesIf invoices are stored in another member state
the Belgian VAT authorities should be notified.
For further information on indirect tax in Belgium please contact:
Lode Agache
T +32 3 235 88 88
E lode.agache@be.gt.com
Belgium


Zero-rated supplies include exported goods and services, the sale of a going concern to a GST
registered person and transactions involving the supply of land between GST registered persons.
Exempt supplies include financial services, residential rent, fines, penalties and interest.

to these rates?
No.
Goods and Services Tax (GST) is the principal indirect tax in Jersey. It is a transactional tax and is charged
and collected on taxable supplies. It is worth noting that there is currently no VAT/GST in Guernsey or the
other Channel Islands.
Yes. If the annual turnover of taxable supplies in Jersey exceed (or are expected to exceed) UKP
300,000 in any 12 month period, it is necessary to register. Persons can voluntarily register for GST if
this threshold is not exceeded if they are conducting a taxable activity and are making taxable supplies.

However there are exemptions from registration for certain regulated business (banks, trust
companies, etc.) and non-established business. This exemption is through the International Service Entity
Regime (ISE) that is expanded upon below.

Yes.

No, although many non-residents do engage with local agents to reduce compliance and operational
matters.
Returns can be submitted on a quarterly or annual basis depending on the annual turnover of taxable
transactions of the registered person.

Yes. If a GST return, or the corresponding payment, is submitted late a penalty and surcharges can be
imposed.
No.
Yes. If errors or omissions have been made on the GST return penalties can be can be imposed.

No. A business must be registered for GST in Jersey to be eligible to claim any GST. Currently this
requires the entity to be carrying on a taxable activity in Jersey.

taxation in Jersey.
GST is a tax on consumption which is applied on the
supply of most goods and services. It is also applied to goods
upon importation into Jersey. Although GST is ultimately
borne by the consumer by being included in the price paid, the
responsibility for charging, collecting and paying it to the tax
authority rests with the business making the supply i.e. the sale.
GST must be charged on a supply of goods or services in
Jersey by a registered person in the course of furtherance of a
taxable activity carried on by that person this is referred to
as output tax. Any GST on costs incurred in generating such
supplies can be claimed this is referred to as input tax. The
in each accounting period will be the amount of GST payable
by the business to Comptroller of Taxes. Where the input tax
A taxable activity generally means any activity which
is carried on continuously or regularly, whether or not for
pecuniary profit, and involves or is intended to involve
the supply of goods and services to another person for a
consideration.
There are two rates of GST that are applied to goods and
services in Jersey: standard rate and zero rate. In addition,
some goods and services are exempted from the tax. The most
common exempt supplies include financial services, residential
rent, fines, penalties and interest.
Generally, businesses that make exempt supplies are unable
to claim input tax on costs incurred generating those supplies,
so the GST paid to suppliers is a real cost to these businesses.
However, there is the ability for businesses that operate
either within the Financial Services sector or where businesses
supply mainly goods or services to non-Jersey residents to elect
to fall within the International Service Entity regime and not
apply GST to what appears to be taxable supplies and also to be
able to recover any GST that they have suffered.
Goods imported into Jersey are subject to GST. This is

imposed by Jersey customs at the ports of entry. The GST
(plus any duties and other fees) must be paid by the importer
at the time of importation in order for the goods to be released
unless the importer has registered under the approved trader
scheme. The approved trader scheme allows for the entity that
is due to pay the GST on import to pay the GST through his
usual GST submissions.
Where the goods imported are for use in the taxable activity,
the importer (if GST registered) can recover the GST. GST is
charged on the value of the importation, including any customs
duty, freight and insurance.
It is important to note the interaction between GST and
customs duty. Customs duty is levied upon the importation
of certain goods into Jersey. Unlike other indirect taxes, such
as GST, once duty has been paid it is not recoverable by the
importer. It therefore represents a final cost to the importing
business.

your country?
No.

of goods or services in the course or furtherance of a taxable
activity must register for GST if the value of its taxable supplies
in Jersey exceeds UKP300,000 or is expected to exceed this
limit within any 12 month period. A person can register on
a voluntary basis even if the registration limit has not been
reached.
It is possible for two or more persons can be registered
together as a GST group if they satisfy certain control
conditions.
A person cannot be treated as a member of more than one
GST group at a time.
The main advantage of GST group registration is that, apart

disregarded for GST purposes. This reduces the risk of GST
registered, but associated persons.
However, there are some disadvantages and any decision on
whether to group register should be carefully considered. For
example, all GST group members (including former members)
are jointly and severally liable for the GST debt of the group

Yes, although non-resident businesses are only able to register
for GST in Jersey if their taxable supplies are generated when
the time of supply occurs within Jersey.
Time of supply arises at the earlier of an invoice being
issued or payment being received.


not comply with the GST legislation.
If an error is identified and voluntarily disclosed to the
Comptroller of Taxes this reduces any penalty exposure
(depending upon the nature of the offence and whether the
disclosure was made pre or post audit notification).
Can the GST incurred by overseas businesses be

claimed if they are not registered in Jersey?
No. You must register in Jersey in order to recover any GST
incurred.
Non-resident businesses are only able to register for GST
if they conduct a taxable activity in Jersey. This requires the
goods to be physically in Jersey at the time of supply, or for
services, those services must be physically performed in Jersey.
The time of supply provisions state that this event arises at the
earlier of the issuing of an invoice or receipt of payment.

the invoice date
the total amount of GST charged expressed in UK pounds.
GST returns may be filed quarterly or annually depending

upon the level of taxable supplies in a 12 month period.
A quarterly return period is the default filing frequency in
Jersey.
All GST returns have to be submitted on last day of the
following month, together with any payment.
It must also have either:

the amount of the supply, excluding GST
the GST and total amount payable for the supply
if GST is included in the final price, it has to be expressed in
that case.
No, this is not a requirement. However, depending upon the

types of supplies being made, the logistical considerations and
the volume of transactions, non-residents may engage with a
local agent to facilitate the supply.

An input claim can only be made if a valid tax invoice is held at

the time the GST return is lodged.
Late filing penalties and surcharges are imposed if GST returns

and the relevant payments are not lodged by the due date.
For further information on indirect tax in Jersey please contact:

John Shenton
T +44 (0)1534 885866
E john.shenton@gt-ci.com

Not applicable.
Cyprus

Higher reduced rate of 9% for some services including hotel accommodation and hospitality.
Lower reduced rate of 5% applies to services which include food for human consumption, medicines,
renovation of private dwellings and the purchase of new immovable property which is the principal
place of residence in Cyprus.
Zero-rated goods and services include supplies related to commercial shipping and exports.

to these rates?
No.
Value Added Tax (VAT) is the principal indirect tax in Cyprus. It is a tax on consumer expenditure, and is
Yes. It relates to the turnover of taxable transactions in Cyprus at any point in the previous 12 months,
and once the limit has (or will be) reached it is necessary to register.

Yes, the same registration limits apply to non-established business. Different registration requirements
also apply to businesses involved with distance sales made within the European Union (EU) e.g. mail
order and internet sales.

In certain circumstances, a non-established person may be directed by the Cyprus tax authority to appoint
a fiscal representative.
Businesses are required to submit VAT returns covering three month accounting periods.

Yes. If a VAT return, or the corresponding payment, is submitted late a penalty is imposed.
are registered for VAT elsewhere in the EU and in certain circumstances for goods moving to or from the
EU. Declarations also have to be submitted for supplies of electronic, telecommunications or broadcasting
services supplied to consumers in the EU.
Cyprus

Deduction of VAT
The following are examples of expenditure for which VAT cannot be deducted:
Expenditure which is not incurred for business purposes
Expenditure which relates to most exempt supplies
Input VAT which relates to supplies of gifts under certain conditions
Entertainment expenses for persons other than employees or directors
Input VAT on the cost of saloon vehicles.

Cyprus and in other European Union (EU) countries.
stage of the process in most cases rests with the business making
the supply ie the sale.
A transaction is within the scope of Cyprus VAT if the
it is a supply of goods or services
it takes place in Cyprus
it is made by a taxable person. For this purpose, a taxable
person is a person or entity who is or ought to be registered
according to the provisions of the Cyprus VAT law
it is made in the course of furtherance of a business.
services in Cyprus; the standard rate, the higher reduced rate,
the lower reduced rate and the zero rate. In addition, some
goods and services are exempted from the tax.
Businesses that make exempt supplies in most cases are
unable to claim all of the input tax that they incur, so the VAT
paid to suppliers will be a real cost.
Most goods imported into Cyprus from outside the EU are

and Customs duty. Customs duty is levied across the EU at
the EU up to the same level as those produced within. Once
common market.
Unlike other indirect taxes, such as VAT, once duty
custom duty.

supplies in Cyprus exceeds the annual registration limit, or is
expected to exceed the limit in the near future. A business can
register on a voluntary basis even if the registration limit has
not been exceeded.
Cyprus
Group registration
Two or more corporate bodies can be registered together as a

VAT group if:
each of the bodies is incorporated in Cyprus
there are financial, economic and organisational ties.
Financial ties exist where certain elements of control exist
between the members, economic ties exist where the nature
of the activities of the parties are similar or supplementary
and organisational ties exist where there is a common
management/governance structure.
A corporate body cannot be treated as a member of more than
one VAT group at a time.

The same registration limit applies to a non-established
business.
Registration for VAT in Cyprus may also be required
selling. Distance selling occurs when a taxable supplier in
one EU country supplies and delivers goods to a customer
in another EU country who is not registered or liable to be
registered for VAT. Such customers are known as non-taxable
persons, and include private individuals and businesses and
other organisations that are not registered for VAT (either
because of their size, or the fact that they are exempt from
having to register due to the nature of their activities). The
common examples of distance sales are goods supplied by mail
order and via the internet.
year, or the equivalent in its own currency. Cyprus has adopted
an annual threshold of 35,000s which equates to the lower
threshold.

persons in Cyprus will be subject to VAT at the appropriate
rate in the suppliers country. However, once the value of
those distance sales to Cyprus exceeds the Cypriot threshold
of 35,000:
the supplier becomes liable to register for VAT in Cyprus
Cyprus becomes the place of supply
any further sales to customers in Cyprus are subject to
Cypriot VAT.
Suppliers can choose to make Cyprus the place where the
goods are supplied by registering for VAT voluntarily before
the threshold is reached.

The VAT authority in Cyprus may direct a person to appoint
where the person:
is a taxable person, or without being a taxable person carries
out taxable supplies or acquires goods in Cyprus from other
member states
in Cyprus
is established in a country or territory which is not an EU
country (or part of such a country) and where it appears to
the Cypriot authorities that there is no provision for mutual
assistance similar to that which provided between Cyprus
and other EU countries
of residence in Cyprus.

VAT returns normally cover an accounting period of three
months, ending on the last day of a calendar month.
following the end of the relevant period.
Cyprus


claimed if they are not registered in Cyprus?
A default surcharge penalty is imposed by the tax authority if

VAT returns are not submitted on time, or the related tax is not
paid by the due date.
There is a late submission penalty of 51 if a VAT return is
not submitted on time. There is also a default surcharge for late
payment equal to 10% of the unpaid tax. Interest is imposed
on the unpaid tax and late payment surcharge according to
the government interest rate which is announced each year
(currently 4%). This is calculated on a monthly basis.

member States, and enables a business established in another
EU country to recover VAT incurred in Cyprus. To be
eligible to make a claim, the claimant must be a taxable person
established in an EU member State other than Cyprus and in
addition the claimant:
must not be registered, liable, or eligible to be registered in
Cyprus,
must have no fixed establishment, seat of economic activity,
place of business or other residence in Cyprus,
during the refund period they must not have supplied any
goods or services in Cyprus, apart from certain limited
exceptions.

Businesses that are registered for VAT in Cyprus, and make
ESLs must be submitted on a monthly basis, by the 15th
of the following month, regardless of the value of goods or
services which are supplied.
dispatched or arriving from other EU Member States is above
an annual threshold, a supplementary declaration (referred to as
an Intrastat declaration) has to be submitted for either or both.
These declarations have to be submitted on a monthly basis, by
the 10th of the following month.
Businesses which supply electronic, telecommunications
or broadcasting services to consumer residing in the EU are
required to report these supplies to each Member State via the
Mini One-Stop Shop (MOSS). The submission and payable
VAT for these supplies is made quarterly and are due 20 days
following the end of each quarter.

Penalties can also be applied in certain situations including
where the business has failed to maintain adequate records,
provide information (including additional declarations), issue a
legal receipt or comply with any of the directions or regulations
of the commissioner.
serious matters.
The amount that is refundable is determined by the deduction

rules that apply in Cyprus and the claim is submitted
electronically to the tax authority from whom the repayment is
being sought.
year or less than three calendar months unless it is covering
the remainder of a calendar year. The claim has to be made by
30 September of the year following that in which the VAT
was incurred.
Businesses established outside of the EU can, subject to
certain conditions, also reclaim the VAT incurred on imports
into Cyprus or purchases of goods and services used in Cyprus.
established in a third country ie outside the EU, provided that
in the period of the claim:
they were not registered or liable to be registered for VAT
in Cyprus,
they were not established in any EU country,
they made no supplies of goods and services in Cyprus
other than certain specified exceptions,
where they are established in a third country having a
comparable system of turnover taxes, unless the Cyprus tax
authority allows otherwise, that country provides reciprocal
arrangements for refunds to be made to taxable persons
established in Cyprus.
Cyprus
The claim period in Cyprus is from 1 July to 30 June each year.

Claim forms have to be submitted to the Cyprus tax authority
no later than six months from the end of the relevant designated
year, i.e. by 31 December each year.

A VAT invoice must normally show:
the invoice date
the customers VAT registration number where applicable
for each description the number of goods or the unit price
or the extent of services, the VAT rate and the net payable
in Euro
the total net amount without VAT
the portion of any discount offered
Analysis of each VAT rate and the total amount payable
thereon, for each rate
the total amount of VAT in Euro
where any of the margin schemes are used adequate
reference should be made on the invoice, e.g. Margin
Scheme Travel Agents
where the cash accounting scheme is used the invoices
should state Cash Accounting Scheme
where self billing is being applied the invoices should state
Self Billing
where the recipient in another Member State is responsible
for accounting for the tax the invoice should state Reverse
Charge.

format and there is no need to notify the tax authority.
paper invoices. The method used to ensure the authenticity of
For further information on indirect tax in Cyprus please contact:
George Karavis
T +357 22 600114
E george.karavis@cy.gt.com

services, it must:
or services
Cyprus
Czech Republic

Reduced rate of 15% for some goods and services including food and accommodation services.
Reduced rate of 10% for foodstuff marked as essential child nutrition, pharmaceutical products and
books.

to these rates?
No.
Value Added Tax (VAT) is the principal indirect tax in the Czech Republic. It is a tax on consumer
expenditure, and is levied on business transactions and imports.
Yes. It relates to the turnover of taxable transactions in the Czech Republic, and once the limit (CZK
1,000,000) has been reached it is necessary to register.

No. They will need to register as soon as they start to make taxable transactions.

The concept of a person of a fiscal representative does not exist in the Czech VAT law.
Businesses are required to submit VAT returns on a monthly basis. VAT returns can also be submitted on
a quarterly basis in certain cases.

Yes. If a VAT return, or the corresponding payment, is submitted late a penalty can be imposed (late
submission penalty and/or late payment interest).
Czech Republic
Yes. EC Sales Lists and control statement (this is how Financial Administration calls the report where
majority of incoming and outgoing VAT related transactions have to be reported individually in the
electronic way). The obligation to file a control statement is incurred by persons registered for VAT in the
Czech Republic as taxpayers, both Czech and foreign entities, who in a monitored tax period:
declare output tax
carried out a taxable supply under the regime of local reverse charge
claim input tax deductions
carried out a supply under a special regime for investment gold.
Legal persons have to submit the VAT control statement no later than the 25th day after the end of each
month. Natural persons have to submit the VAT control statement on the same day as their VAT return
(no later than the 25th day after the taxable period: month or quarter, or special taxable period e.g. in
insolvency procedure etc.).
First taxable period for which the VAT control statement has to be submitted is January 2016 or the first
quarter of 2016.

Yes, in certain circumstances and subject to certain conditions based on Directive 2008/9/EC. VAT is
paid back to entities from all EU countries and very limited amount from third countries.
Deduction of VAT
The VAT cannot be deducted from refreshment (beverage, meal, etc.), from supplies not used for the
business purposes and from supplies used for VAT exempt supplies with no right to VAT deduction.

in the Czech Republic and in other European Union (EU)
countries.
country. Although VAT is ultimately borne by the consumer by
A transaction is within the scope of the Czech Republic
VAT if the following conditions are met:
it is a supply of goods or services, acquisition of goods from
other EU member states and import of goods
it takes place in the Czech Republic
person is a person or entity who is registered for VAT in the
Czech Republic, or has a liability to become registered
it is made in the course of business carried on by that person
or entity
it is made for consideration.
services in the Czech Republic; the standard rate and two
reduced rates. In addition, some goods and services are
exempted from the tax.
Businesses that make exempt supplies with no VAT
deduction right are unable to claim all of the input tax that they
incur, so the VAT paid to suppliers will be a real cost.
Most goods imported into the Czech Republic from outside
the EU are subject to VAT. The tax will have to be paid by the
may be possible to reclaim the tax (subject to certain rules).
custom duty.
Another important Czech Republic indirect tax is excise
duty levied on tobacco, beer, wine, spirits and crude oil
products.
Czech Republic

A person who makes taxable supplies of goods or services in
the course of business must register for VAT if the value of its
taxable supplies in the Czech Republic exceeds the 12 months
registration limit of CZK 1,000,000 (approximately 40,000). A
business can register on a voluntary basis even if the registration
limit has not been exceeded.
business activities will be covered by the registration.
Two or more corporate bodies can be registered together
as a VAT group if each of the bodies is established, or has a
fixed establishment, in the Czech Republic. A VAT group
means a group of persons related through capital with the share
exceeding 40% or entities controlled by the same person.
disregarded for VAT purposes.

which are not established in the Czech Republic, but for the
purposes of the tax are making taxable supplies there. Those
businesses will need to register for VAT as soon as they
commence trading in the Czech Republic, irrespective of the
level of turnover.
Registration for VAT in the Czech Republic may also be
required where a non-established EU business is involved with
distance selling. Distance selling occurs when a taxable supplier
in one EU country supplies and delivers goods to a customer
in another EU country for whom the goods acquisition in that
state is not subject to tax. The common examples of distance
sales are goods supplied by mail order and via the internet.
year, or the equivalent in its own currency. The Czech Republic
has adopted an annual threshold of CZK 1,140,000.


persons in the Czech Republic will be subject to VAT at the
appropriate rate in the suppliers country. However, once the
value of those distance sales to the Czech Republic exceeds the
threshold of CZK 1,140,000:
the supplier becomes liable to register for VAT in the Czech
Republic
the Czech Republic becomes the place of supply
any further sales to customers in the Czech Republic are
subject to CZ VAT.
Suppliers can choose to make the Czech Republic the
place where the goods are supplied by registering for VAT
voluntarily before the threshold is reached.

in your country?
With effect 1 January, 2015, Article 58 of Directive 2006/112/
EC was amended. The rules determining the place of supply of
electronically supplied services supplied to private consumers
(B2C) changed from the Member State where the supplier
belongs (ie where established) to the Member State of the
consumer. The result of this is that local VAT is chargeable
at the applicable rate in each of the Member States in which
electronically supplied services are made (ie where the
customer belongs). Therefore B2C supplies of electronically
supplied services to customers in the Czech Republic are
subject to Czech Republic VAT. To ensure compliance with
this, suppliers have the choice to either register for VAT in
each Member State where their customers reside, or elect to
register under the EU VAT MOSS simplification scheme in a
single Member State (where they are established). Businesses
with multiple establishments in the EU can choose which
Member State to operate MOSS (the Member State of
Identification). However, the MOSS cannot be used to report
local sales to customers in a Member State in which suppliers
of electronically supplied services have a fixed establishment.
Non-EU suppliers without an establishment in a Member State
are free to select a Member State of their choosing to operate
MOSS and become their Member State of Identification. The
UK is popular choice for a MOSS registration due to the
English language.
Czech Republic

The concept of a fiscal representative is not defined in the
Czech Republic VAT law. However, the non-established
business may arrange for a representative based on power of
attorney.

VAT returns normally have to be submitted on a monthly
basis. Based on application and meeting certain conditions
required the entity may apply for a quarterly tax period.
end of the relevant tax period, together with any tax due.

If the VAT return is not filed in time a 0.05% tax liability
(maximum 5%) per day penalty is imposed from the 6th
working day. Delayed payment penalty is the annual rate
of the Czech National Bank repo rate plus 14% (currently
approximately 14-15% in total annually) is imposed from the
5th working day after the due date.

Businesses that are registered for VAT in the Czech Republic,
and make supplies of goods or services to traders registered
for the tax in other EU countries are required to complete and
submit EC Sales Lists (ESLs). The ESLs must show details of
Generally, the ESLs must be submitted each calendar
month. If just services under the reverse charge regime are
supplied the ESL is submitted in the same period as the tax
return.
dispatched or arriving from other EU is above an annual
threshold (CZK 8 million), a supplementary declaration
(referred to as an Intrastat declaration) has to be submitted for
either or both. These declarations have to be submitted on a
monthly basis.
As of January 2016 the taxable persons registered for VAT
in the Czech Republic are obliged to submit VAT Control
Statement in addition to regular VAT return. This statement
requires data based on issued and received tax documents which
are already required to be recorded in the tax evidence by the
VAT Act.

Besides penalties stated above, a penalty is imposed if tax
is additionally assessed by the tax authority. This penalty
amounts to 20% of the tax increased or VAT claim reduced by
the tax administrator.
serious matters.
If VAT Control Statement is not submitted on time the
following penalties may be imposed:
CZK 1 000, if it is submitted after the due date without
summons from the Tax Administration,
CZK 10 000, if it is submitted within the deadline given by
the Tax Administration in issued and delivered summons,
CZK 30 000 if the Corrective VAT Control Statement is
not submitted although summons to submit a Corrective
VAT Control Statement were issued and delivered by the
Tax Administration,
CZK 50 000 if the regular VAT Control Statement is not
submitted nor is submitted after summons of the Tax
Administration.

claimed if they are not registered in the Czech
Republic?
circumstances.
member States, and enables a business established in an EU
country to recover VAT incurred in another member State.
To be eligible to make a claim, the claimant must be a taxable
person established in an EU member state other than the one
from which the claim is to be sought. In addition, the claimant:
the member State from which he is claiming the refund
place of business or other residence there
during the refund period he must not have supplied any
goods or services in the member State of refund, apart from
certain limited exceptions.
rules that apply in the country making the refund. The claim
is submitted electronically to the tax authority from whom the
repayment is being sought.
Czech Republic
30 September of the year following that in which the VAT was
incurred.
into the Czech Republic or purchases of goods and services
used in the Czech Republic. The scheme is available to any
person carrying on a business established in a third country, ie
outside the EU, provided that in the period of the claim:
he was not registered or liable to be registered for VAT in
the Czech Republic
he was not established in any EU country
he made no supplies of goods and services in the Czech
Republic other than certain specified exceptions
where he is established in a third country having a
comparable system of turnover taxes, unless the Czech
Republic tax authority allows otherwise, that country
provides reciprocal arrangements for refunds to be made to
taxable persons established in the Czech Republic.
The number of the countries eligible for this refund is very
limited.

the invoice date
the date of supply (also known as tax point) if this is
the customers VAT registration number
the unit price exclusive of tax and discount, if not included
in the unit price
tax base
the rate
the total amount of VAT in CZK.
The invoice shall also include the following information:
a reference to the relevant provisions of the VAT Act, the
provisions of the EU or other information indicating that a
transaction is exempt if it is exempt from VAT
Self-billing if the person for whom the transaction is
carried out, is empowered to issue a tax invoice
Reverse charge if the person liable to pay tax person for
whom the transaction was carried out.
format. Electronic invoices must contain the same information
as paper invoices. The method used to ensure the authenticity
of origin, the integrity of content and legibility of the invoices is
For further information on indirect tax in the Czech Republic please contact:
Gabriela Hoppe
T +420 296 152 255
E gabriela.hoppe@cz.gt.com
Ondej tdr
T +420 296 152 305
E ondrej.stedry@cz.gt.com
Czech Republic
Denmark

Reduced (effective) rate of 5% for artists own art objects sold for the first time.
Zero-rated supplies newspapers and other supplies that mostly relate to international trade.

these rates?
No.
Value Added Tax (VAT) is the principal indirect tax in Denmark. It is a tax on consumer expenditure, and is
Yes. It relates to the annual turnover of taxable transactions in Denmark, and once the limit has (or will be)
reached it is necessary to register. The registration threshold for VAT registration is an annual turnover of
DKK 50,000 (About 6,700) and applies to traders who are established in Denmark.

No. There is no registration limit for businesses that are not established in Denmark and they will need
to register as soon as they start to make taxable transactions. Different registration requirements also
apply to businesses involved with distance sales made within the European Union (EU), eg mail order and
internet sales.

In certain circumstances, a non-established person outside of the EU may be directed by the Danish tax
authority to appoint a fiscal representative.
Most businesses are required to submit VAT returns covering three month accounting periods. Returns
can also be submitted on a monthly or biannual basis.

Yes. The most typical VAT related offenses are errors caused by negligence (eg failure to meet deadlines),
which may cause minor surcharges for reminders etc. In cases of late payment, interest will also be due.
are registered for VAT elsewhere in the EU. This reporting system is known as sales listings or EU sales
listings in the common language. Declarations also have to be submitted in certain circumstances in
connection with goods moving to or from the EU.
Denmark

Deduction of VAT
Non-deductible input VAT:

Acquisition and operation of passenger cars equipped for the carriage of no more than nine persons
(special rules applies to long-term leasing). However, this does not apply to the cost of crossing the
fixed link over the resund into Sweden, for traders who trade in or hire out motor vehicles or who
operate driving schools.
Purchase of commercial and cargo vehicles, (eg a van or lorry) with a total permissible weight of not
more than three tons, if it is not exclusively used in connection with the traders deductible supplies of
goods and services. VAT on costs related to operation can usually be fully deducted.
Purchases made for the benefit of the employees (staff) or the owners of a business (eg food, meals,
accommodation etc.)
Entertainment, hotel accommodation, restaurant services and gifts. A special rule applies whereby
of the VAT amount paid for restaurant services are deductible. 100% of the VAT on purchases
etc. related to hotel accommodation is deductible, provided that the costs relate strictly to business
purposes. VAT on costs of entertainment and gifts are not deductible.
Acquisition and operation of premises for the traders owner and staff.
Payment in kind of the traders staff.
Acquisition and operation of crches, kinder gardens, recreational centres, holiday homes, summer
cottages, and similar for the traders staff.

Denmark and in other European Union (EU) countries.
ie the sale.
A transaction is within the scope of Danish VAT if the
interpretation
it takes place in Denmark
Denmark, or has a liability to become registered
services in Denmark; the standard rate, the reduced rate, and the
from the tax.
Most goods imported into Denmark from outside the
EU are subject to VAT. The tax will have to be paid by the
custom duty.
Denmark

supplies in Denmark exceeds the annual registration limit
of DKK 50,000 (approximately 6,700), or is expected to
exceed the limit in the near future. A business can register on
a voluntary basis even if the registration limit has not been
exceeded.
Two or more taxable persons (corporate bodies) can be
registered together as a VAT group if:
establishment, in Denmark
they must carry out non-taxable or non-economic activities
the entities (eg a parent company) directly or indirectly
holds 100% of shares of the other entities.
The main advantage of VAT group registration is that
any supply of goods or services by a member of the group to
another member of the group is disregarded for VAT purposes.
This reduces the risk of VAT being accidentally omitted on
supplies between separately registered connected companies.
example, all VAT group members are jointly and severally
liable for the VAT debt of the group during the period of their
membership.
The Danish tax authority must give permission to form a
VAT group. The application must be submitted one month
before the start date.

who are not established in Denmark, but for the purposes of
the tax are making taxable supplies there. Those businesses will
need to register for VAT as soon as they commence trading in
Denmark, irrespective of the level of turnover.
Registration for VAT in Denmark may also be required
year, or the equivalent in its own currency. Denmark has
adopted an annual threshold of DKK 280,000 (about 37,500),
which almost equates to the lower threshold in Euros.
persons in Denmark will be subject to VAT at the appropriate
distance sales to Denmark exceeds the Danish threshold of
DKK 280,000 (about 37,500):
the supplier becomes liable to register for VAT in Denmark
Denmark becomes the place of supply
any further sales to customers in Denmark are subject to
Danish VAT.
Suppliers can choose to make Denmark the place where the
Denmark

in your country?
belongs (i.e. where established) to the Member State of the
electronically supplied services are made (i.e. where the
customer belongs). To ensure compliance with this, suppliers
have the choice to either register for VAT in each Member
State where their customers reside, or elect to register under
the EU VAT MOSS simplification scheme in a single Member
State (where they are established). Businesses with multiple
establishments in the EU can choose which Member State to
operate MOSS (the Member State of Identification). However,
the MOSS cannot be used to report local sales to customers in
a Member State in which suppliers of electronically supplied
services have a fixed establishment. Non-EU suppliers without
an establishment in a Member State are free to select a Member
State of their choosing to operate MOSS and become their
Member State of Identification.

The tax authority in Denmark may direct a person to appoint
where the person is established in a country or territory
which is not an EU country (or part of such a country) and
where it appears to the Danish tax authority that there is no
provision for mutual assistance similar to that which provided
between Denmark and other EU countries. However, this does
not apply to persons established on the Faroe Islands or in
Greenland (which are parts of the Kingdom of Denmark, but
not part of the EU) or in Iceland or Norway.
Traders established in the EU, Greenland, the Faroe Islands,
Iceland or Norway can elect to be registered directly at their
home address.

As a main rule, a newly registered business must declare
VAT electronically on a quarterly basis unless the expected
annual revenue is more than approximately 7,333,333 (in
which case the VAT period is a month).
A business with annual revenue of less than DKK 5,000,000
(approximately 666,667) must file an electronic VAT return
bi-annually. The VAT must be declared and paid at the latest on
the first day of the third month after the expiry of the tax period.
The VAT period is a calendar quarter for a business
with annual revenue of between DKK 5,000,000 and DKK
50,000,000 (approximately 666,667 6,666,667). The VAT
must be declared and paid at the latest on the first day of the
third month after the expiry of the tax period.
For businesses with annual revenue of more than DKK
50,000,000 (approximately 6,666,667), the VAT period is a
calendar month. VAT must be declared and paid at the latest on
the 25th day of the following month. However, VAT for June
should be reported and paid by a specific date indicated by the
tax authorities each year (around 17 August) as that is the main
summer holiday period.

If the payment is late, the tax authority will charge fees and
interest. Interest will be added to the outstanding VAT amount
for each day the business exceed the deadline. Therefore, the
outstanding amount will increase for each day the businesses do
not pay.

Businesses that are registered for VAT in Denmark, and make
Sales Lists (ESLs) electronically. The ESLs must show details of
The reports (ESLs) must be submitted on a monthly basis
by the 25th of the next month. There is also an option to file the
reports on a quarterly basis if the businesss revenue remains
below a certain threshold and if the company is not reporting
VAT on a monthly basis.
Denmark

serious matters.
Notifying the Danish tax authorities of an offence may
reduce (or even avoid) sanctions, provided that the violation of
the VAT provisions is not due to wilful intent. If a violation of
the Danish VAT Act occurs in a field with especially complex
VAT rules, the fine may also be reduced (unless it can be
proved that the violation was committed intentionally).

claimed if they are not registered in Denmark?
circumstances.
person established in an EU member State other than the one

into Denmark or purchases of goods and services used in
Denmark. The scheme is available to any person carrying on
a business established in a third country, ie outside the EU,
provided that the following four conditions are met:
1. The business is not domiciled or has a place of business or
the like in Denmark.
2. The goods or services are bought for commercial use.
3. The business would be subject to a registration tax in
accordance with the Danish VAT Act (Momsloven) if the
business was situated in Denmark.
4. During the period which the application concerns, the
applicant has not conducted business which is subject to
registration tax except for:
delivery of services (including transport services and
related services), if these services are directly related to
the export of goods to locations outside the EU
delivery of services (including transport services and
related services), if these services are directly related to
the import of goods which are included by a scheme
according to which complete VAT exemption is granted
on imports. This also applies to services in connection
with goods held in bond in a tax and customs
warehouse.
The claim period in Denmark is from 1 July to 30 June each
year. Claim forms have to be submitted to the Danish tax
authority no later than six months from the end of the relevant
designated year, ie by 31 December each year.

incurred.

Denmark

the invoice date
services, it must:
or services
Where a business makes retail sales and makes a sale of goods
or services for DKK 3,000 or less exclusive of VAT, a simplified
VAT invoice can be issued. This applies if the sales amount is
small or if the purchaser is a private person.
In some cases, there must always be issued a full invoice.
This applies, for example, if the buyer is another VAT
registered business that asks for a full invoice. This applies, for
example, also from the sale of services to private individuals, if
the invoice amount incl. VAT is DKK 5,000 or more.
electronic format in Denmark and there is no need to tell
the tax authority. Electronic invoices must contain the same

Electronic invoices may with regard to VAT be stored abroad,

provided that:
Danish tax authorities are notified of the storage location
Danish tax authorities have full online access upon request
storage does not take place outside the EU or the Nordic
countries.
For further information on indirect tax in Denmark please contact:
Niels Braad
T +45 35 27 52 41
E niels.braad@dk.gt.com
Estonia

Reduced rate of 9% for some goods and services including books, periodic publications, medicinal
products and accommodation services.

these rates?
Yes, as of 2017, the VAT rate of accommodation services and accommodation services with breakfast is
increased from 9% to 14%.
Value Added Tax (VAT) is the principal indirect tax in Estonia. It is a tax on consumer expenditure, and is
Yes. If the taxable supply of the transactions, except the transfer of fixed assets and distance selling to
a person of Estonia, carried out by a person exceeds 16,000 as calculated from the beginning of a
calendar year, an obligation to register as a taxable person arises.

Yes. In addition, if a taxable person of another EU is engaged in distance selling to a person of Estonia
(excluding distance selling of excise goods) and the taxable value of the supply of the distance selling
exceeds 35,000 as calculated from the beginning of a calendar year, the registration obligation arises.

If a non-established person is established outside of the EU, they are required to appoint a fiscal
representative.
The taxable period is one calendar month. The VAT return must be submitted to the tax authority by the
20th day of the month following the taxable period.

Yes. If a VAT return, or the corresponding payment, is submitted late a penalty can be imposed. If the VAT
payment is late, an interest of 0.06% per day is calculated based on the payable amount.
Yes. EC Sales list has to be submitted in respect of certain supplies made to customers who are
registered for VAT elsewhere in the EU. Intrastat declarations also have to be submitted in certain
circumstances in connection with goods moving to or from the EU.
Estonia

Deduction of VAT
The VAT of goods or services relating to the reception of guests or the provision of meals or
accommodation for employees is not deductible. In certain circumstances, when acquiring an automobile
and purchasing of goods and receiving of services for such an automobile then 50% of the input VAT is
deductible.

Estonia and in other European Union (EU) countries.
ie the sale.
A transaction is within the scope of Estonian VAT if the
it is a supply of goods or services (although the term
supply is not defined in the legislation, and has a broad
interpretation
it takes place in Estonia
Estonia, or has a liability to become registered
services in Estonia; the standard rate, the reduced rate, and the
from the tax.
Most goods imported into Estonia from outside the EU are

custom duty.

of goods or services in the course or furtherance of a business
must register for VAT if the value of its taxable supplies in
Estonia exceeds the annual registration limit (16,000), or is
expected to exceed the limit in the near future. A person is
required to submit an application for registration as a taxable
person to the tax authority within three working days as of the
date on which the registration obligation arises.
A business can register on a voluntary basis even if the
Estonia
The tax authority shall register a parent undertaking and

its subsidiaries as a single taxable person, ie VAT group, on the
basis of a joint application by such taxable persons. Taxable
persons who are economically and organisationally related
shall also be registered as a VAT group on the basis of a joint
application if more than 50 percent of the shares, holding or
votes of each company to be registered within the composition
of a VAT group are owned by one and the same person or if the
persons are related on the basis of a franchise contract.
The tax authority may register the company retrospectively,
on its own initiative, if a business fails to register at the correct
time.

The normal VAT registration limits and regulations also apply
to businesses who are not established in Estonia.
Registration for VAT in Estonia may also be required
persons, and include private individuals and businesses as well
as other organisations that are not registered for VAT (either
selling threshold of either 35,000 or 100,000 euros per
calendar year, or the equivalent in its own currency. Estonia has
adopted an annual threshold of 35,000.

persons in Estonia will be subject to VAT at the appropriate
distance sales to Estonia exceeds the threshold of 35,000:
the supplier becomes liable to register for VAT in Estonia
Estonia becomes the place of supply
any further sales to customers in Estonia are subject to
Estonian VAT.
Suppliers can choose to make Estonia the place where the

your country?
With effect from 1 January 2015, Article 58 of Directive 2006/112/
(B2C) changed from the Member State where the supplier belongs
(ie where established) to the Member State of the consumer. The
result of this is that local VAT is chargeable at the applicable rate
in each of the Member States in which electronically supplied
services are made (ie where the customer belongs). To ensure
compliance with this, suppliers have the choice to either register
for VAT in each Member State where their customers reside,
or elect to register under the EU VAT MOSS simplification
scheme in a single Member State (where they are established).
Businesses with multiple establishments in the EU can choose
which Member State to operate MOSS (the Member State of
Identification). However, the MOSS cannot be used to report
MOSS and become their Member State of Identification.

A person of another Member State engaged in business with
no permanent establishment in Estonia has the right to appoint
upon registration as a taxable person a tax representative, who
has been approved by the tax authority.
A person of a third country engaged in business with no
permanent establishment in Estonia shall appoint, upon
registration as a taxable person, a tax representative, who has
been approved by the tax authority.
Estonia

The taxable period is one calendar month. The VAT return and
appendix thereto shall be submitted to the tax authority by the
On the basis of a reasoned request made by a taxable
person, the tax authority may, by his or her decision, establish
a taxable period longer than one calendar month for the taxable
person, which begins on the first day of the calendar month
or first taxable period and ends on the last day of one of the
following calendar months. Also in this case, VAT returns shall
still be submitted to the tax authority by the 20th day of the
month following the taxable period.
The first taxable period for a taxable person (and taxable
person with limited liability) is the period from the date of
registration until the end of the same month. If the number
of calendar days in the first taxable period is less than fifteen,
the taxable person or taxable person with limited liability
may declare the supply of the first period together with the
supply of the following taxable period and submit one return
concerning two taxable periods.
The VAT return shall be submitted electronically if the
person has been a taxable person for at least 12 months or
more than five invoices are included in the appendix to the
VAT return. On the basis of a reasoned request made by a
taxable person or a taxable person with limited liability, the tax
authority may allow the submission of a VAT return on paper.
The data from the invoices issued to and received from a
legal person, sole proprietor and state, rural municipality and
city authority and the registry code issued to a transaction
partner in Estonia, the personal identification code in the case
of a notary and bailiff shall be reflected in the appendix to the
VAT return. The appendix to the VAT return shall reflect the
invoices in which the transferor of the goods or provider of
services has marked the supply taxable at the 20% and 9%
VAT rate, except for the invoices submitted under the special
arrangement, if the invoice or the total amount of invoices
without VAT makes up at least 1,000 for one transaction
partner during the taxation period. The transaction partnerbased threshold shall be calculated separately for purchase
and sale invoices. The invoices shall not be summed up in the
appendix to the VAT return.

authority if VAT returns are not submitted on time.
If the tax is not paid by the due date, 0.06% tax interest will
be calculated per day on top of the tax amount.
For the late submission or payment, the tax authority can
issue a notification to the taxpayer confirming that a penalty
may be imposed if the obligation will not be replete by a given
deadline.

Businesses registered for VAT in Estonia that make supplies of
goods or services to traders registered for the tax in other EU
countries are required to complete and submit EC Sales Lists
(ESLs). The ESLs must show details of the recipients of the
goods and services.
ESLs should be submitted for each taxable period, by the

serious matters.
Estonia

claimed if they are not registered in Estonia?
circumstances.
States, and enables a business established in the EU to recover
VAT incurred in another member State. To be eligible to make
a claim, the claimant must be a taxable person established in an
EU member State other than the one from which the claim is to
be sought. In addition, the claimant:
year or less than three calendar months unless it is covering the
remainder of a calendar year. The claim has to be made by 30
September of the year following that in which the VAT was incurred.
into Estonia or purchases of goods and services used in Estonia.
established in a third country, ie outside the EU, provided that
in Estonia
they were not established in any EU country
they made no supplies of goods and services in Estonia
other than certain specified exceptions
comparable system of turnover taxes, unless the Estonian
tax authority allows otherwise, that country provides
reciprocal arrangements for refunds to be made to taxable
persons established in Estonia.

the serial number and date of issue of the invoice
the name and address of the taxable person and the persons
registration number as a taxable person
the name and address of the acquirer of goods or the
recipient of services
the registration number of the acquirer of goods or the
recipient of services as a taxable person if the acquirer of
goods or the recipient of services has tax liabilities upon the
acquisition of goods or receipt of services
the name or a description of the goods or services
the quantity of the goods or extent of the services
the date of dispatch of the goods or provision of the services
or the date of receipt of full or partial payment for the goods
or services if the date can be determined and differs from the
date of issue of the invoice
the price of the goods or services exclusive of VAT and any
discounts, if these are not included in the price
the taxable amount broken down by different rates of VAT
together with the applicable rates of VAT or the amount of
supply exempt from tax
the amount of VAT payable. The amount of VAT shall be
indicated in Euros.
An invoice may be issued on paper or, subject to acceptance by
the acquirer of goods or the recipient of services, by electronic
means.
A simplified invoice may be issued, provided that the
amount indicated in the invoice does not exceed 160, exclusive
of VAT, in the following cases:
1) upon the provision of transport services for passengers
2) in the case of invoices printed by parking meters, automated
petrol stations and other similar machines.
For further information on indirect tax in Estonia please contact:
Kerttu Kuuseme
T +372 626 4500
E kerttu.kuusemae@ee.gt.com
Kristjan Jrve
T +372 626 4500
E kristjan.jarve@ee.gt.com
The refund period must not cover more than one calendar year
or less than three calendar months unless it is covering the
remainder of a calendar year. The claim has to be made by 30
September of the year following that in which the VAT was
incurred.
Estonia
Finland

Reduced rate of 14% for food, animal feed, restaurant and meal catering services.
Reduced rate of 10% for books, medicine, services relating to physical exercise and sports, movies,
entrance to cultural events and to entertainment events, transport of passengers, accommodation,
and TV licenses.
A Zero-rate applies in certain instances (e.g. intra-Community supplies of goods and exports of
goods). Additionally, certain services (e.g. financial services, insurance services, and certain
educational services) are exempted from VAT.

to these rates?
No.
Value Added Tax (VAT) is the principal indirect tax in Finland, which is levied on supplies of goods and
services.
Yes. It relates to the annual turnover of taxable transactions in Finland, and once the limit has been

No. As a rule non-established businesses are required to register for VAT purposes once they start to
make VAT taxable transactions in Finland. However, as an exception, there is a registration limit for nonestablished businesses engaged in distance sales.

A fiscal representative is required, if the person is established in a non-EU country or in a country with
Finland has not concluded a treaty regarding mutual change of information.
Most businesses are required to submit VAT returns on monthly basis. Quarterly and annual reporting is
available for small business.

Yes. If a VAT return, or the corresponding payment, is submitted late a penalty is imposed.
In addition to the VAT return a European Sales Listing (ESL) return needs to be submitted in connection
with supplies of goods and services to other EU countries.
Finland

Yes, overseas businesses may apply for refund in certain situations provided that all conditions for the
refund are met.
Deduction of VAT
VAT deduction can only be made from purchased made for VATable business use. Purchases made, for
example private use or entertainment is not VAT deductible.
Value Added Tax (VAT) is the main indirect tax in Finland as

in other European Union (EU) countries.
VAT is a consumption tax which is applied on the supply of
most goods and services. It is also applied to goods, and certain
services imported to Finland.
As VAT is levied on transactions the seller has the
responsibility for charging, collecting and paying VAT to the
tax authority on every supply (output tax). Thus, the seller
operating a value added taxable business in Finland is liable to
register for VAT purposes.
In addition to output tax, the seller may also incur VAT
(input tax) on its purchases including the VAT paid at
importation. The difference between the output tax and the
deductible input tax in each accounting period will be the
amount of VAT payable by the business to the tax authority.
Where the input tax exceeds the output tax, a refund can be
claimed.
Value added tax is payable in Finland on:
the sales of goods and services in the conduct of business,
which takes place in Finland
the importation of goods, which takes place in Finland
the intra-Community acquisition of goods, referred to in
Article 26 a, which takes place in Finland
the removal of goods from warehousing arrangements, as
referred to in Article 72 l, which takes place in Finland.
A person operating a value added taxable business is liable to

register for VAT purposes if his turnover during a calendar year
amounts to 8,500 or more (In 2016 the threshold is 10,000).
Additionally, a voluntary registration is available even if the
registration limit would not be exceeded.
For the registration purposes, a person includes any legal
entity engaged in business operations. The registration will
cover all business activities apart from voluntary registration for
letting of real property.
Two or more persons within the field of financial or
insurance services may form a group for VAT purposes
and apply for VAT group registration. For the VAT group
registration it is provided that the persons within the group:
are providing financial or insurance services
are established, or has a fixed establishment, in Finland
have close financial, economic and administrative
connections with each other.
services in Finland; the standard rate and the two reduced rate
and the zero rate. Additionally, a zero-rate applies in certain
instances. Even though VAT is broadly applied to transactions,
some goods and services are exempted from VAT.
The main advantage of a VAT group is that, any supply of

goods or services within the group is disregarded for VAT
purposes. However, there are also some disadvantages such as
the liability for taxes. Within the group all members of the VAT
group are jointly and severally liable for the VAT debt of the
group during the period of their membership.

No. The VAT registration threshold does not apply to supplies
made by a non-established business that does not have a fixed
establishment in Finland. If the reverse charge does not apply,
the non-established business must register for VAT in Finland.
A non-established person that does not have a permanent
establishment in Finland may apply for voluntary registration
for VAT purposes.
Finland
A non-established person engaged in distance selling is

liable to register for VAT purposes in Finland if the threshold
of 35,000 is exceed during a calendar year. Once the threshold
is exceeded the supplies are subject to VAT in Finland. Also a
voluntary registration for distance sales before the threshold is
exceeded is available.
Is there any specific legislation to tax

non-resident supplies of electronically
supplied/digital services to private consumers
As of the beginning of 2015, telecommunications, radio and
television broadcasting and electronically supplied services
sold to non-taxable persons will be taxed in the country where
the buyer is established. As of 1st January 2015, businesses
supplying electronic services to EU non-taxable persons are
able to choose Finland as their Member State of identification
and declare VAT on services sold to other EU Member State
consumers via the Finnish internet portal.
A business using the special scheme will take care of the
reporting and payment obligations related to the VAT of
telecommunications, broadcasting or electronically supplied
service sales in one EU Member State. A business not using the
special scheme must be registered for VAT purposes in Finland
if it sells telecommunications, broadcasting or electronically
supplied services to consumers in Finland.

Yes, a fiscal representative is required from such persons,
that are not established in Finland and do not have a fixed
establishment in the European Union or in a country which
have a treaty with Finland concerning mutual assistance. The
fiscal representative appointed must be domiciled in Finland
and needs to be approved by the Regional Tax Office. In
addition the Regional Tax Office may require a guarantee for
the payment of the tax.
However, there is relief available for smaller businesses. If

the turnover is under 50,000 per year the person liable to tax
may apply for quarterly accounting period, i.e. the periodic
VAT return is filed in every three months. If the turnover is
under 25,000 per year the person liable to tax may apply for
annual accounting period, i.e. the periodic VAT return is filed
in every twelve months.

Yes. If the periodic VAT return is submitted late a penalty for
late filing is imposed. The minimum amount of the penalty for
late filing is 5 and the maximum 15,000.
If the tax payable has not been paid by the due date a
late payment interest is payable. The taxpayer is expected
to calculate the correct amount of late payment interest and
account it to the tax account on ones own initiative. The
interest will start to accrue on the day following the due date
and it will stop accruing on the date of payment, both days
inclusive.

A person making intra-community supplies of goods or
services is required to submit EC sales listing (ESL return). The
ESL return states the details of the purchaser and the value of
the transactions of goods and services. The ESL return needs to
be submitted not later than the 20th day of the month.
Additionally, an intra-stat return for import or export needs
to be filed if certain thresholds have been exceeded in intracommunity supplies of goods. The intrastat return is submitted
on monthly basis.

In addition to penalty for late filing and late payment interest a
punitive tax increase may be imposed if the VAT rules are not
followed. Depending on the nature of the neglect or error, the
tax increase may vary from 5% to 20%. In case of tax fraud,
the tax may be increased by not less than 50% and to not more
than three times its amount.
The general accounting period for VAT is one month. The

periodic VAT return submitted on monthly basis must arrive at
the tax office on the 7th day of the second month following the
accounting period in question.
Finland

claimed if they are not registered in Finland?
Yes, Finland has adopted two special refund schemes for nonregistered businesses; one for EU established businesses and the
other for businesses outside EU.
The EU cross border refund scheme, available in all EU
member States, allows non-registered, but EU established
businesses to recover VAT incurred in Finland under certain
conditions.
Businesses established outside of the EU can also reclaim
the VAT incurred on imports or purchases of goods and
services under certain strict conditions.

The following information must be stated on a VAT invoice:
the date of issue of the invoice
a sequential number, based on one or more series, which
uniquely identifies the invoice
the VAT number of the taxable person who supplied the
goods or services to which the invoice relates
the buyers VAT number when reverse charge is applied,
and in the case of intra-community trade
full names and addresses of the seller and buyer
the quantity and nature of the goods supplied or the extent
and nature of the services rendered
the date on which the goods or services were supplied or the
date on which a prepayment on account was made
the price exclusive of VAT per rate of VAT, displaying
the unit price and any rebates, discounts and credits (if not
included in the unit price)
the rate of VAT chargeable
the VAT payable in respect of the supply of the goods or
services
indications of any VAT exemption or reverse charge
if applicable, the details necessary to identify the goods as a
new means of transport
if applicable, an indication concerning the VAT margin
scheme if second-hand goods, works of art, antiquities
and collectibles or certain travel agency services are being
supplied
if applicable, an indication concerning the supply of taxable
investment gold
if an earlier invoice is being amended, a reference to the
earlier invoice.
If the value of goods or services is less than 400 a simplified

invoice may be issued. A simplified invoice must state the
following information:
the date of issue
the sellers name and VAT number (business identification)
identification of the type of goods (including quantity) and
services supplied
the VAT due, specified by the rates of VAT chargeable, or
alternatively, the price(s) exclusive of VAT per rate of VAT.
For further information on indirect tax in Finland please contact:
Jan-Erik Rae
T +358 40 0642 467
E jan-erik.rae@fi.gt.com
France
Mainland
standard VAT rate: 20%
reduced VAT rates: 10%, 5.5%, 2.1%
Corsica
standard VAT rate : 20%
reduced VAT rates: 13%, 10 %, 2.1%, 0.9%
French overseas territories
standard VAT rate: 8.5%
reduced VAT rates: 2.1%, 1.75%, 1.05%

these rates?
No.
Value Added Tax (VAT) is the principal indirect tax in France. It is a tax on consumer expenditure, and is
No. There is no VAT registration threshold in France.

Under the franchise regime, the established entity is required to VAT-register. However, the latter is
dispensed from filing French VAT returns and paying VAT if the turnover generated during the previous
calendar year did not exceed:
82,200 excluding VAT for supplies of goods
32,900 excluding VAT for services.

Not applicable.

Businesses established in the European Union (EU) may appoint a VAT agent that acts under the
responsibility of the foreign entity. The VAT agent will be in charge of the French formalities in the name of
the foreign entity without being liable for VAT.

Businesses established outside the EU (except some countries having concluded with France
a convention of assistance for the recovery of a tax claim) must in principle appoint a French VAT
representative which is jointly and severally liable for the VAT obligations including the payment.
Under the standard regime, in principle, French VAT returns must be filed on a monthly basis. However,
VAT returns may be filed on a quarterly basis when the annual VAT amount due is less than 4,000.
France

Late filing of French VAT returns

The French tax authorities may apply:
10% penalty increased to 40% or 80% under specific cases
0.4% per late month (late payment interest).
Late payment of French VAT
5% penalty of the VAT due unless the taxable person submits the VAT returns too late but with the full
payment of the VAT due
Depending on the nature of the operations performed in France; additional declarations may be requested
(eg monthly Intrastat returns in case of intra-EU acquisitions or deliveries of goods; EC sales list for
services; export or import customs documents).
Yes, in cases of tax audits and bad faith or fraud.

Deduction of VAT
In principle, a taxable person may recover the input VAT incurred on the purchase of goods/services used
for business purposes, if this person is fully liable for VAT on its operations performed.
Some items do not entitle VAT recovery such as:
hotel accommodation for directors or employees
petrol
transport of passengers
business gifts valued at more than 65 including VAT/year and beneficiary.
Value Added Tax (VAT) is the main indirect tax in France.
No. There is no VAT registration threshold in France.

Under the franchise regime, the established entity is
required to VAT-register. However, the latter is dispensed from
filing French VAT returns and paying VAT if the turnover
generated during the previous calendar year did not exceed:
82,200 excluding VAT for supplies of goods
32,900 excluding VAT for services.
VAT is a tax on consumption which is applied during the

It is also applied to goods and certain services entering the
charging, collecting and paying it to the French tax authorities
at each stage of the process rests with the business performing
the supplies or selling the goods.
An established business will charge VAT (output VAT)
on its sales of goods or services and incur VAT (input VAT)
on its purchases. The difference between the output VAT and
the input VAT in each declarative period will be the amount
of VAT payable by the established business to the French tax
authorities. Where the input tax exceeds the output tax, a VAT
refund can be claimed.

Non-established entities in France performing operations in the
scope of French VAT need to register for VAT as soon as they
start their operations in the scope of French VAT, irrespective
of the level of turnover.A non-established person engaged in
distance selling is liable to register for VAT purposes in Finland
if the threshold of 35,000 is exceed during a calendar year.
Once the threshold is exceeded the supplies are subject to VAT
in Finland. Also a voluntary registration for distance sales
before the threshold is exceeded is available.
France

With effect 1 January, 2015, the VAT rules determining the
place of supply of electronically services supplied to private
consumers (B2C) changed from the Member State where the
supplier belongs (ie where established) to the taxation on the
Member State of the consumer.
The result of this is that local VAT is chargeable at
the applicable rate in each of the Member States in which
electronically supplied services are made (ie where the customer
belongs). To ensure compliance with this, suppliers have the
choice to either register for VAT in each Member State where
their customers reside, or elect to register under the EU VAT
MOSS simplification scheme in a single Member State (where
they are established). Businesses with multiple establishments in
the EU can choose which Member State to operate MOSS (the
Member State of Identification).
However, the MOSS cannot be used to report local
sales to customers in a Member State in which suppliers of
electronically supplied services have a fixed establishment.

Late filing of French VAT returns

10% penalty increased to 40% or 80% under specific cases
Late payment of French VAT

5% penalty of the VAT due unless the taxable person
submits the VAT returns too late but with the full payment
of the VAT due

Depending on the nature of the operations performed in
France; additional declarations may be requested (eg monthly
Intrastat returns in case of intra-EU acquisitions or deliveries
of goods; EC sales list for services; export or import customs
documents).

Yes, in cases of tax audits and bad faith or fraud.

Businesses established in the EU may appoint a VAT agent that
acts under the responsibility of the foreign entity. The VAT
agent will be in charge of the French formalities in the name of
the foreign entity without being liable for VAT.
Businesses established outside the EU (except some
countries having concluded with France a convention of
assistance for the recovery of a tax claim) must in principle
appoint a French VAT representative which is jointly and
severally liable for the VAT obligations including the payment.

Under the standard regime, in principle, French VAT returns
must be filed on a monthly basis. However when the annual
VAT amount due is less than 4,000, French VAT returns may
be filed on a quarterly basis.
France

claimed if they are not registered in France?
Yes, it may be possible for a foreign entity not established in
France to claim for the refund of the French VAT incurred
under the following conditions:
not be registered, liable, or eligible to be registered in France
during the refund period the foreign entity must not have
supplied any goods or services in the scope of French VAT,
apart from certain limited exceptions.
Two VAT refund procedures exist, one for businesses
established in the EU and another for businesses established
elsewhere.
Foreign entities established in the EU
Under the electronic VAT refund procedure (EU Directive

2008/9/EC), the deadline for the electronic filing of the
VAT refund application is 30 September of the calendar year
following the refund period.
The minimum claim period is three months, and the
maximum period is one year. The minimum claim for a period
of less than a year is 400. For an annual claim, the minimum
amount is 50.
Foreign entities established outside the EU
Under the VAT refund procedure provided by the 13th

Directive, the non-EU entities must appoint a tax representative
in France in charge of the VAT refund formalities.
From a practical standpoint, the VAT refund claims must be
submitted within six months after the end of the calendar year,
meaning by 30 June of the following year.
The minimum claim period is three months, and the
maximum period is one year. The minimum claim for a period
of less than a year is 200. For an annual claim, the minimum
amount is 25.

Under French VAT rules, an invoice must indicate notably the
following general information:
the invoice date
quantity and nature of the good/services supplied
taxable amount per rate
unit price (exclusive of any VAT)
rebates or discounts
VAT rate applicable
the total amount of VAT charged expressed in euros
the total amount excluding of VAT per VAT rate
in case of VAT exemption regime or reverse-charge
mechanism, the reference to the relevant provisions of the
French tax code or the VAT Directive 2006/112/EC or any
provision indicating that the operation benefits from a VAT
exemption, a reverse-charge mechanism or profit margin
regime. For reverse-charge mechanism, it is required to
indicate on the invoice Reverse-Charge.
As from 1 January 2014, VAT law allows electronic invoicing in
line with EU Directive 2010/45/EU. All formats of e-invoices
are accepted, but authenticity of the origin, integrity of content
and legibility must be satisfied from the invoices date of
issuance through the end of the archiving period. The electronic
invoices must quote the same information than paper invoices.
For further information on indirect tax in the France please contact:
Elvire Tardivon Lorizon
T +331 53 42 61 60
E etardivonlorizon@avocats-gt.com
Germany

Reduced rate of 7% applies to a specified list which includes, for example, books, newspapers,
cultural goods and services, certain agricultural and forestry goods, charitable services, work of art
and local public transport.

to these rates?
No.
Value Added Tax (VAT) is the principal indirect tax in Germany. It is a tax on consumer expenditure, and is
No.

Not applicable.

No.
Returns have to be submitted on a monthly basis in the first two years of registration. In addition all
taxable persons must submit annual VAT returns.

are registered for VAT elsewhere in the EU (EC Sales Listing). Declarations also have to be submitted for
commercial statistic purposes regarding the movements of goods from one member state to another
(INTRASTAT).

Germany

Germany and in other European Union (EU) countries.
It is a tax on consumption, which is applied during the
ie the sale.
Taxable supplies on goods and services
A transaction is within the scope of German VAT, if the

it is a supply of goods or services. According to German
law, a supply of goods is the transfer of the right to dispose
of tangible property for consideration. Activities for
consideration, which are not regarded as a supply of goods,
are services
it takes place in Germany
person is a person or entity who practices commercial or
professional activity independently and is registered for
VAT, or has a liability to become registered
Due date
Generally VAT is due and accounted for at the end of the

month in which the supply of goods is performed; as a general
rule, the tax has to be calculated on the agreed consideration.
On application the competent local tax office can allow that
an entrepreneur accounts for the VAT on basis of received
consideration. The consideration receipts basis is a method
available only to three groups of persons:
entrepreneurs whos total amount of supplies have not
exceeded 500,000 in the previous calendar year
entrepreneurs who are by way of exemption according
148 of the German Fiscal Code not required to keep
accounts and to make periodical financial statements on
basis of annual inventories
entrepreneurs who (and only as far as they) perform
turnovers in an independent profession according 18 (1)
No. 1 of the German Income Tax Act (e.g. lawyers, tax
advisors, engineers, architects, doctors etc.).
VAT rates and exemptions
services in Germany; the standard rate and the reduced rate. In
Businesses that make exempt supplies are, under certain
circumstances, unable to claim all of the input tax that they
incur, so the VAT paid to suppliers will be a real cost. In
relation to VAT exempt supplies, the supplier may opt for
taxation under specific circumstances.
Import
Most goods imported into Germany from outside the EU are
subject to import VAT. The tax will have to be paid by the
custom duty.
Germany
It is possible, subject to conditions, to defer the payment of

the VAT until the 16th day of the month following the import.
Taxpayers are entitled to the deduction of import VAT in the
VAT declaration period, in which the goods are imported.
Since nearly all imports are processed via the electronic customs
procedure called ATLAS, a print out from the customs will
suffice to recover the import VAT.
The person liable for customs duty on importation is also
liable for VAT on importation. This is the person in whose
name customs clearance has been applied for. The declarant
may therefore be the owner, the beneficial owner or any
person who is in possession of the goods at the time of entry
into Germany. Only commercial transporters may apply for
clearance on behalf of another person, who is not in possession
of the goods, i.e. the supplier or purchaser of the goods.

General rule
Generally a person who either makes or intends to make

taxable supplies of goods or services in the course or
furtherance of a business must register for VAT.
Small business rule
If the value of its annual taxable supplies in Germany did

not exceed 17,500 in the preceding calendar year and is not
expected to exceed 50,000 in the current calendar year and
thus the person is to be considered as a small entrepreneur,
an obligation to register for VAT does not exist. The privilege
for the small entrepreneurs only applies for businesses situated
in Germany. A business can register on a voluntary basis even
if the registration limit has not been exceeded. The effect of
the voluntary registration is an obligation to retain VAT on all
supplies and services for the next five years.
VAT group
In Germany there are no typical Group registration like in

the UK. However, in case a corporation is integrated into a
business from a fiscal, economic and organisational point of
view (so called Organschaft), it is not independent and has
to comply with the parents directions. Effect is that both
companies are taxed as one. Transactions between group
members are not subject to VAT. Solely the controlling
enterprise is taxed.
E-Services
For the e-services scheme, EU VAT can be registered and

accounted for in one EU member state. Non-EU entities
providing electronic services to non-entrepreneurs in the EU
could register in Germany, if they are not registered in another
EU member state. They have the option to file the periodical
VAT-forms within 20 days of the period end of a quarter year.
Before starting the business you have to announce your choice
to the Bundeszentralamt fr Steuern. The VAT-forms have to
be filed electronically. If the non EU entity chooses to register
and to file the VAT-forms in Germany, there is no need to
register anywhere else in the EU in connection with electronic
services. The periodical VAT-forms have to be made for the
electronic services provided all over the EU.
Since 1 January 2015: If EU entities providing electronic
services to non-entrepreneurs in Germany they are not
committed to be registered in Germany; if they are registered
in another EU member state and provide electronic services
(so called mini-one-stop-shop (MOSS)). German VAT payers,
who use the MOSS have to file the periodical VAT-forms
within 20 days of the period end of a quarter year and have to
submit the VAT-forms electronically to the tax authorities (ie
Germany: Bundeszentralamt fr Steuern).

General rule

who are not established in Germany, but for the purposes of
the tax, are making taxable supplies there. Those businesses will
Germany, irrespective of the level of turnover.
Intra-Community acquisition
In case of intra-Community acquisitions, if the volume of the

intra-Community acquisitions did not exceed 12,500 in the
preceding and will not exceed 12,500 in the current calendar
year, the purchaser will be treated as a private person, ie the
sales are taxed in the country they were sold, if the purchaser is:
an entrepreneur, who performs only tax exempt sales
a small entrepreneur.
Germany
Distance sales
Registration for VAT in Germany may also be required where

a non-established EU business is involved with distance selling.
via the internet.
year, or the equivalent in its own currency. Germany has
persons in Germany will be subject to VAT at the appropriate
distance sales to Germany exceeds the threshold of 100,000:
the supplier becomes liable to register for VAT in Germany
Germany becomes the place of supply
any further sales to customers in Germany are subject to
German VAT.
Suppliers can choose to make Germany the place where the

A new-established business is allowed to appoint a fiscal
representative but does not have to.

in your country?
Member State of Identification). However, the MOSS cannot
be used to report local sales to customers in a Member State in
which suppliers of electronically supplied services have a fixed
establishment. Non-EU suppliers without an establishment
in a Member State are free to select a Member State of their
choosing to operate MOSS and become their Member State of
Identification.

Monthly VAT return
As a general rule, VAT returns have to be filed quarterly. As

an exception, VAT returns have to be filed monthly (if certain
thresholds are met) or yearly.
Late filing of VAT returns may result in additional
assessments and penalties. The payment must be received by
the VAT authorities on time. If no payment has been received
on time, late payment surcharges will be fixed.
Returns are normally prepared for a one month period.
They are due for submission within ten days of the period
end. The period of ten days can be extended on application for
another month if prepaying 1/11 of VAT of previous calendar
year (will be repaid in the December return). The filing of VAT
returns should only take place electronically. The electronic
VAT return has to be prepared on the basis of special software,
which is available from the tax authorities.
Germany
If the VAT return for the previous calendar year does not
exceed 7,500, then the VAT return generally must be prepared
on a three month period (calendar quarter). They are due for
submission within ten days of the periods end. The period of
ten days can be extended on application for another month.
If the VAT amount for the previous calendar year does not
exceed 1,000, the taxable person must then only submit an
annual VAT return.
In case of new-registered companies the VAT returns have
to be prepared monthly in the first two years, notwithstanding
what the real VAT amount is.
Annual VAT return
Generally annual VAT returns must be submitted to the

competent local tax office by 31 May of the following calendar
year. However, for taxable persons who have appointed a tax
advisor the deadline for submitting is in general automatically
extended to 31 December of the following calendar year.

VAT returns which are filed late can be fined up to 10% of the
tax finally assessed (maximum 25,000).
Late payments are subject to a surcharge of 1% of the tax to
be paid for every month during the period the delay continues.
Interest is due from the beginning of the fifteenth month
after the end of the calendar year in which the taxable event
occurred. The interest is calculated at 0.5% per month. In cases
of tax evasion additional interest is possible from the beginning.
Further late or non-payments are seen as offences which
could be punished up to 100,000 and in serious cases a higher
fine at the discretion of the court or imprisonment of up to ten
years. Penalties can be appealed if there is reasonable excuse.
If a tax return is found to be incorrect it must be corrected
immediately by filing an amended tax return. Penalties may
arise according the general rules (see above).
EC sales lists which are submitted late can be fined up
to 5,000 per declaration. In addition this could be seen as an
offence punished up to 5,000. Finally the Federal tax office
could fix fines to force the taxpayer to submit the forms up to
25,000.
If an Intrastat report is not filed or filed late a penalty of up
to 5,000 per declaration can be implemented.

Businesses that are registered for VAT in Germany, and make
Generally, where the value of goods supplied to businesses
in other EU member states exceeds 50,000 in the current
or four previous quarters, the ESLs must be submitted
each calendar month. Otherwise the document for goods is
submitted for each calendar quarter.
ESLs for services should be submitted for each calendar
quarter.
threshold of 500,000 respectively 800,000 (for arrivals as of
1/1/2016), a supplementary declaration (referred to as an
These declarations have to be submitted on a monthly basis if
such transactions incur.

not comply with general rules.
Penalties can also be applied for example where the business
has failed to maintain adequate records or provide information.
serious matters.

claimed if they are not registered in Germany?
circumstances.
Germany
VAT-refund procedure for European-businesses

member states, and enables a business established in an EU
country to recover VAT incurred in another member state.
goods or services in the member state of refund, apart from
rules that apply in the country making the refund. The claim is
submitted electronically to the tax authority in the country of
establishment of the claimant.
incurred.
VAT-refund procedure for non-European-business

conditions, also reclaim the VAT incurred on imports into
Germany or purchases of goods and services used in Germany.
in Germany
they made no supplies of goods and services in Germany
comparable system of turnover taxes, that country provides
persons established in Germany.
Claim forms have to be submitted to the Bundeszentralamt fr
Steuern no later than six months from the end of the relevant
designated year, ie by 30 June each year.

the recipients VAT ID Number (in case of specific cross
border supplies)
the invoice date
supplied to the customer and the quantity of goods or the
extent of the services
the tax base with regard to each tax rate applicable or tax
exemption
the tax rate
indication of the application of the reverse-chargemechanism (if applicable).
Where a VAT invoice includes exempt goods or services, it
must show the reason for the tax exemption.
Where a business makes a sale of goods or services for 150
or less including VAT, a simplified VAT invoice can be issued.
VAT invoices can be issued, received and stored in an
electronic format and there is no need to tell the tax authority.
For further information on indirect tax in the Germany please contact:
Ulrike Slotty-Harms
T +49 211 9524 8228
E ulrike.slottyharms@wkgt.com
Ira Rave
T +49 211 9524 8212
E ira.rave@wkgt.com
Marie Charlotte Kramer
T +49 211 9524 8125
E mariecharlotte.kramer@wkgt.com
Greece

Reduced rate of 13% for some goods and services including hotels and sales of unprocessed food,
including bread.
Super reduced rate of 6% applies to medicines, books, newspapers and theaters.

these rates?
No.
Value Added Tax (VAT) is the principal indirect tax in Greece. It is a tax on consumer expenditure, and is
No threshold exists for taxable persons. However, small businesses, having a turnover up to 10,000
may be exempted from VAT registration.
No. There is no registration limit for businesses that are not established in Greece and they will need
internet sales.

In certain circumstances, a non-established person may be directed by the tax authority to appoint a fiscal
representative. The appointment of fiscal representative is not obligatory for taxable persons established
in the EU.
are submitted on a monthly basis for S.A., Ltd, and taxable persons keeping double entry books.

Yes. Additional declarations have to be submitted in respect of certain supplies made to customers
who are registered for VAT elsewhere in the EU. Declarations also have to be submitted in certain
Greece

Deduction of VAT
No deduction applies for products such as tobacco, alcohol, private cars of a capacity up to 9 seats and
their fuel etc.

Value Added Tax (VAT) is the main indirect tax in France.
Greece and in other European Union (EU) countries.
ie the sale.
A transaction is within the scope of Greek VAT if the
supply is not extensively defined in the legislation, it has a
broad interpretation.
it takes place in Greece
Greece, or has a liability to become registered
services in the Greece; the standard rate, the reduced rate, and
the super reduced rate. In addition, some goods and services are
exempted from the tax.
Most goods imported into Greece from outside the EU are

custom duty.

a business must register for VAT in Greece. Since 2014, an
exemption option may apply if the taxable person does not
exceed a turnover of 10,000 per year.
VAT groups are not provided in the Greek VAT Code.
Greece

who are not established in Greece, but for the purposes of the
tax are making taxable supplies there. Those businesses will
Greece, irrespective of the level of turnover.
Registration for VAT in Greece may also be required where
via the internet.
year, or the equivalent in its own currency. Greece has adopted
an annual threshold of 35,000 which equates to the upper
threshold in euros.
persons in Greece will be subject to VAT at the appropriate
those distance sales to Greece exceeds the Greek threshold of
35,000:
the supplier becomes liable to register for VAT in the
Greece
Greece becomes the place of supply
any further sales to customers in Greece are subject to
Greek VAT.
Suppliers can choose to make Greece the place where the goods


The tax authority in Greece may direct a person to appoint
where the person:
a) is a taxable person or makes taxable supplies or acquires
goods in Greece from one or more other EU countries
b) is not established, and does not have a fixed establishment
in the Greece
c) is established in a country or territory which is not an EU
country (or part of such a country).

VAT returns cover an accounting period of three months,
ending on the last day of a calendar month for taxable persons
having single entry books. For taxable persons keeping double
entry books, such as SA and Ltd, accounting periods are
monthly.
of the end of the relevant accounting period, together with
electronically.
Greece

A penalty may be imposed by the tax authority if VAT returns
due date.
The penalty is 250 per return for persons keeping single
entry books and 500 per return for persons keeping double
entry books. A penalty of 100 per return applies in case no tax
arises from the return. Also an interest of 0.73% per month is
calculated on the amount of tax.

Businesses that are registered for VAT in Greece, and make
Generally, where the taxable persons keep double entry
books the ESLs must be submitted each calendar month.
Otherwise the document is submitted for each calendar quarter.

Administrative penalties and interest can be applied for
errors and omissions made on tax returns, or where the tax
is paid late. Penalties can also be applied where the business
has failed to maintain adequate records, provide information
(including additional declarations), or makes repeated mistakes.
serious matters.

claimed if they are not registered in Greece?
circumstances.
Two schemes exist, one or businesses established in the EU


incurred.
into Greece or purchases of goods and services used in Greece.
established in a third country ie outside the EU, provided that
Greece
he made no supplies of goods and services in Greece other
than certain specified exceptions
comparable system of turnover taxes, unless the Greek tax
established in Greece.
Greece

the invoice date
the total amount of VAT charged expressed in Euros.
Where a business makes retail sales a simplified receipt can be
issued.
For further information on indirect tax in Greece please contact:
Sotiris Gioussios
T +30 210 7280000
E sotiris.gioussios@gr.gt.com
Greece
Hungary

Reduced rate of 18% for accommodation service and for some food products (milk and
bakery products).
Lower reduced rate of 5% for some medical products, books and for district-heating, some meat
products and some performance services.

to these rates?
No.
VAT is an indirect tax paid by the end user on the use of goods and services. This is built on the
presumption that VAT is charged in every phase of production and trade, but the user is entitled to allow
for it in the VAT due. Only the VAT of costs incurred by the taxpayers for the purpose of VAT taxable
business activities can be deducted.

Under the Hungarian VAT system, VAT is charged on goods and services supplied by taxpayers in
Hungary (actual or deemed), goods purchased from the European Union (EU) and importation of goods.
There is no threshold in Hungary for registration, ie if a person or entity makes taxable supplies in
Hungary, it has to register at the Hungarian tax authority and submit declarations.

Businesses who are not established in Hungary, but for the purposes of the tax are making taxable
supplies there, those businesses will need to register for VAT as soon as they commence trading in
Hungary, irrespective of the level of turnover.

Foreigners from non-EU countries are obliged to appoint fiscal representatives. Foreigners from EU
countries can appoint fiscal representatives for their Hungarian tax issues.
As a general rule, VAT returns are filed quarterly. As an exception, VAT returns can be filed monthly or
yearly, based on the data of the second year preceding the actual year. Taxpayers with a total cumulated
VAT balance reaching a positive HUF 1,000,000 in the current year are liable to file monthly returns.
Newly registered taxpayers need to submit the returns monthly in their first two years.

Yes. If a VAT return or the corresponding payment is submitted late a penalty and fine can be imposed.
Hungary
Yes. Separated declarations have to be submitted in connection with goods moving to or from the EU
and about the services provided and bought within EU. Additional declaration (domestic sales list) has to
be submitted about the invoices between Hungarian taxpayers, if the VAT amount in the invoice is HUF
1,000,000 or more.
Yes. Penalties can be imposed for a range of errors or omissions, up to 200% of the unpaid tax.

Yes, it exists for taxpayers within EU. For taxpayers form non-EU countries it is based on reciprocity.

The act on VAT prescribes that VAT is to be paid on the goods
and services supplied by taxpayers in Hungary, on acquisitions
from within the European Union (EU) and on the importation
of goods.
The main elements of the VAT liability are as follows:
there must be a supply
the transaction must take place inland (actual or deemed)
the transaction must be VAT taxable (subject to a normal or
reduced VAT rate)
there must be a supply by taxpayers (taxpayers are persons
performing business activities on their own accounts)
the transaction must take place within the framework of
business activities.
VAT on imports
In Hungary, import VAT is to be paid on product entries from

a so-called third countries outside the territory of the EU. For
product entries from other EU member states the import rules
do not apply but the rules for intra-community entries
are applicable.
VAT liability occurs in Hungary, if:
the goods are imported to the territory of Hungary directly
from a third country
after imported to the territory of the community, the goods
are put into free circulation in Hungary.

There is no threshold in Hungary for registration, ie if a person
or entity makes taxable supplies in Hungary, it has to register at
the Hungarian tax authority and submit declarations.
Taxpayers with their head office in Hungary are entitled to opt
to be tax exempt annually for the given tax year, provided that
their revenue is below a certain threshold. This threshold is
HUF 6,000,000.
Companies of other member states supplying goods to

non-VAT registered Hungarian private individuals or entities
are not obliged to register in Hungary (distance sale). The
requirement that the company arranges for the goods to be
delivered to its buyer in Hungary and the total value of these
sales to Hungarian customers does not exceed 35,000 in
the given year and in the preceding year. If the sales of the
given company exceed 35,000 in a calendar year, the foreign
company has to register in Hungary and to charge Hungarian
VAT on these transactions.
Even if the threshold is not exceeded, the foreign supplier
can opt to register, however, the decision is binding for two
calendar years. The procedure for distance sales also applies
in the opposite situation, in which a trader sells goods from
Hungary to private individuals or non-taxable entities who
resides in other EU member states.

Businesses who are not established in Hungary, but for the
purposes of the tax are making taxable supplies there, those
businesses will need to register for VAT as soon as they
commence trading in Hungary, irrespective of the level of
turnover.

Foreigners from non-EU countries are obliged to appoint fiscal
representatives. Foreigners from EU countries can appoint
fiscal representatives for their Hungarian tax issues.
Hungary

As a general rule, VAT returns are filed quarterly. As an
exception, VAT returns can be filed monthly or yearly, based
on the data of the second year preceding the actual year.
Taxpayers with a total VAT balance reaching a positive HUF
1,000,000 in the reference year are liable to file monthly returns.
Taxpayers with a total VAT balance below HUF 250,000 in
the reference year and sale income is under 50 million HUF
and having no IC tax number are to file annual VAT returns
(regardless of the algebraic sign).
Taxpayers with EU tax number can submit their VAT
returns monthly or quarterly only. VAT groups can submit
their VAT returns monthly. Companies in the year of
registration and the next year have to submit the VAT returns
monthly (calendar month).
Taxpayers liable to quarterly returns may apply for
monthly returns and taxpayers liable to annual returns
may apply for the quarterly return frequency. The Tax
Authority permits the frequency of the returns to be higher
than stipulated by law for a given tax year. The permission is
generally granted if the VAT rate applicable to the supplies of
the taxpayer is lower than the VAT applicable to acquisitions or
if an investment is implemented by the taxpayer.
Taxpayers liable to annual returns are obliged to switch
to quarterly returns during the year if the threshold of HUF
250,000 or sale income of HUF50 million is reached or tax
authorities given IC tax number for them. Taxpayers with their
VAT balance reaching a positive HUF 1,000,000 are obliged
to switch to monthly returns from the first month following
the quarter (regardless of whether they were liable to annual or
quarterly returns).
The amount of VAT computed in a currency other than
HUF is to be translated to HUF at the selling exchange rate of a
Hungarian trade bank or at the exchange rate of the Hungarian
National Bank or European Central Bank (ECB). If the
taxpayer wishes to apply the exchange rate of the Hungarian
National Bank (MNB) or European Central Bank, may choose
it, if it declares its choice previously to the tax authority.
The deadline to submit the VAT return is the 20th day of
the month following the return period. The VAT return is to be
filed on the yy65 form from the tax authority.
Quarterly VAT returns
Most entrepreneurs/taxable persons are required to submit

VAT returns each calendar quarter. VAT returns must be filed
and VAT amounts paid by 20th of the month following the
tax period.
Monthly VAT returns
Monthly filing required when the VAT amount payable

reaching a positive HUF 1,000,000 in the second preceding year
or within the actual year. Newly registered taxpayers need to
submit the returns monthly in their first two years.
Annual VAT returns
Entrepreneurs/taxable persons whose VAT balance does not

exceed HUF 250,000 on a yearly basis in the second preceding
year and sale income is under 50 million HUF and having no
IC tax number are to submit an annual VAT return.
Importers
VAT is levied on importation of goods into the territory of

Hungary. As a general rule, every person importing goods
will be responsible to pay VAT to the customs authorities.
Taxpayers are entitled to the deduction of import VAT in the
VAT declaration period in which the payment is made. It is a
prerequisite for deduction that the taxpayer should have the
certificate issued by the customs authority.
Large trading companies can apply for a permission to use
the reverse charge system. Taxpayers with permission of the
customs authority are entitled to recover VAT paid on the
importation of goods acquired for the purpose of business
activities in the same VAT declaration in which the input VAT
is shown. The permission is valid for one year.
The prerequisite of tax recovery is that the taxpayer
should have the resolution on putting the goods into free
circulation as well as documents authentically certifying the
data necessary for the determination of the VAT amount on
the import of goods.
Should an indirect customs representative be appointed
by the taxpayer to act in the import procedure, the taxpayer is
entitled to recover VAT paid on behalf of him by the indirect
customs representative.
The indirect customs representative is entitled to recover
VAT on importation, if they:
are a taxpayer and meets the personal conditions of
tax recovery
have the resolution on putting the goods into
free circulation
have the documents necessary for the determination of
the VAT amount
have paid the input VAT.
Hungary

Late or missed returns
For non-natural persons a default fine up to HUF 500,000 can

be levied (HUF 200,000 for private individuals as taxpayers) if
the declaration obligation is not fulfilled or fulfilled with delays.
The tax authority also sets a deadline for the elimination of the
default. Should this deadline be not adhered to, the duplicate of
the original fine is levied as default fee.
Incorrect returns
In case of self-assessment calculations, mistakes or other similar

misprints are corrected officially by the tax authority. Should
this correction affect the amount of tax liability or tax reclaim,
the taxpayer is notified within 30 days. For returns filed with
errors, for non-natural persons a default fine of up to HUF
100,000 (private individuals up to HUF 20,000) can be levied.
Late payment of tax
In case of the delayed payment of taxes a late fee is to be paid

for the days of delay, but for a maximum of three years. The
daily late fee amounts to the duplicate of the official National
Bank Prime Rate divided by 365 (calculated with the interest
rate valid in the period of delay and not the one valid
when charged).

EC Sales Lists (ECLs) are to be filed by those having EU VAT
numbers to the tax authority. The reporting liability is monthly
or quarterly, in accordance with the VAT return period. The
taxpayer has to file the ECLs monthly instead of quarterly if
the EC purchases or sales in the current quarter are more than
50,000. In this case in the following year the taxpayer has to
file the ECLs monthly.
Recapitulative statements (return yyA60) includes the
net value of the turnover in the given period for each partner
taxpayer in case of Intra-community supplies and, Intracommunity acquisitions and services provided and bought
within EU.
In addition to the recapitulative statements, those
obliged are to file the following special yy86 declaration to
the tax authority.
yy86: VAT return for special customers and legal entities
as non-taxpayers liable to pay taxes on the Intra-community
acquisitions and for taxpayers without an EU VAT number on
the Intra-community acquisition of new means of transport not
regarded as passenger cars.
The ordinary tax return contains the declaration including:

data supply on new means of transport supplied by
taxpayers within the community to customers of another
member state without an EU VAT number
the invoices between Hungarian taxpayers, if
the VAT in the invoice is more than HUF 1,000,000.
cumulated VAT charged by the same supplier is more
than HUF 1,000,000.
The VAT yy86 returns are to be filed by the 20th day of the
month following the month when the tax liability occurred.

Fines for errors detected during the Tax Authority inspection
or during the inspection prior to VAT return (VAT shortfall
or illegitimate VAT reclaim) may amount to 50% of the tax
difference detected as debiting the taxpayer. If the tax
difference is in connection with fraud the penalty is 200%
of the tax difference.

claimed if they are not registered in Hungary?
Hungarian VAT can be reclaimed by taxpayers registered in
another member state not having head offices or permanent
establishments in Hungary and not supplying goods or services
inland except for the transportation of goods in connection
with the international movement of goods and related services
as well as services where VAT is to be paid by the customer
according to the reverse charge procedure.
Taxpayers registered abroad are entitled to tax reclaim to
the same extent as taxpayers registered inland are entitled to
tax recovery. Tax on goods and services acquired by taxpayers
registered abroad by means of their branch offices established
inland cannot be reclaimed (in this case branch offices may
assert their right of recovery within the framework of the
procedure for domestic taxpayers). Furthermore, VAT on
goods and services acquired by foreign taxpayers on their own
accounts but for the purpose of others cannot be reclaimed.
Taxpayers established in a member state file Hungarian
VAT refund claims with the tax authority of the country of
registration in accordance with the regulations of Council
Directive 2008/9/EC.
Hungary
VAT on invoices issued in the given year may be reclaimed

from 1 January to 30 September of the calendar year following
the given year (requests are to be filed by this date and nonadherence to this deadline will lead to the forfeiture of rights).
In contrast with the main rule, reclaim may be requested for
a three-month-period within the given year, in the month
following the quarter if the request reaches or exceeds 400.
Taxpayers can file refund claim maximum five times for a
given year.
The Hungarian VAT for taxpayers from non-EU countries
is recoverable based on reciprocity only. Reciprocity countries
are Switzerland and Liechtenstein. The refunding request of
non-EU taxpayers has to arrive to the Hungarian tax authority
in paper form until 30 September of the calendar year following
the given year.
If invoices are made out in a foreign currency, the amount of

the recharged value added tax is also to be indicated in HUF in
the invoice.
Regarding the exchange rate applicable for the currency
translation, for this purpose the rate of the National Bank of
Hungary (MNB), European Central Bank (ECB) or the selling
rate of any resident (Hungarian) bank (credit institution)
holding a foreign exchange licence in Hungary. If a taxpayer
opts for the application of the MNB or ECB rate, he has to
report this fact to the tax authority, and is not allowed to
deviate from that until the end of the calendar year following
the year when the selection is made.
For further information on indirect tax in Hungary please contact:
Waltraud Krbler
T +36 1 455-2000
E waltraud.koerbler@hu.gt.com

the date of issue of the invoice
the sequential number of the invoice (with a
continuous numbering)
the tax identification number of the taxable person
supplying the goods, or services
the tax identification number of the customer, if the
customer is liable for the tax payable
the name and address of the taxable person supplying the
goods or services, and the name and address of its customer
the designation of the goods (services) supplied
the date of fulfilment, if it differs from the date of issue of
the invoice
the taxable amount, the unit price exclusive tax of the goods
supplied or services rendered and any applied discounts or
rebates, if they are not included in the unit price
the tax rate applied
the amount of the tax charged
the VAT number of the customer if the tax charged reaches
or exceeds HUF 1 million.
Hungary
Iceland

Reduced rate of 11% for some goods and services including most food, accommodation, books and
magazines and etc.
Zero-rated work and services include health care services, education services, operation of
museums, charity work and etc.

to these rates?
No.
Value Added Tax (VAT) is the principal indirect tax in Iceland. It is a tax on consumer expenditure, and is
Yes. It relates to the annual turnover of taxable transactions in Iceland, and once the limit has (or will be)

Yes. There is a same registration limit for businesses that are not established in Iceland and they will need
to register as soon as they start to make taxable transactions.

In certain circumstances, a non-established person may be directed by Icelandic tax authority to appoint a
Most businesses are required to submit VAT returns covering two month accounting periods. Returns can
also be submitted on a year basis.

Yes. If a VAT return, or the corresponding payment, is submitted late a penalty will be imposed.
No.

Iceland

in Iceland.
ie the sale.
A transaction is within the scope of Icelandic VAT if the
it is a sale of all goods or services that is not specifically
exempt in the law
it takes place in Iceland
Iceland, or has a liability to become registered.
services in Iceland the standard rate, the reduced rate, and the
from the tax.
Most goods imported into Iceland are subject to VAT.
When you import good you have to pay both VAT and
custom duty. Once duty (and VAT) has been paid by the
importer, the goods are in free circulation and they can then
be released for use in the home market. Unlike other indirect
taxes, such as VAT, once duty has been paid it is not usually
recoverable by the importer. It therefore represents a bottom
line cost to the importing business if it cannot be passed on in
higher prices. It is therefore very important to ensure that the
correct rate of duty is applied. VAT is charged on the value of
the importation, including any custom duty.

supplies in Iceland exceeds the annual registration limit, or is
not been exceeded.
a VAT group if:
the parent company owns at least 90% of the daughter
company
the companies have the same accounting year
the parent company applies for it and is in its name
the registration is for minimum of five years.
Iceland

The normal VAT registration limit does apply to businesses
who are not established in Iceland, but for the purposes of the
need to register for VAT not later than eight days before they
commence trading in Iceland, irrespective of the level
of turnover.

A non-established business need to appoint a fiscal
representative to act on his behalf for VAT purposes where
the person:
goods in Iceland
in Iceland.

your country?
According to VAT law no. 50/1988, paragraph 12, section 10.D:
D. Digitally delivered services; the service is always considered
utilized at the buyers residence or place of operation.

VAT returns normally cover an accounting period of two
Businesses that are in a net repayment position (because of
the nature of their activities) and those incurring exceptionally
high expenditure (eg as a result of set up costs or a capital
project) can apply to submit returns on a monthly basis to
improve cash flow. If the annual turnover is less than 3,000,000
ISK the accounting period is the calendar year.
Exceptions from the general rule:
agriculture has an accounting period of six months
fish processing companies can apply for a weekly refund of
input VAT of fish products.
All VAT returns have to be submitted within one month and 5
days of the end of the relevant accounting period, together with
any tax due. As all returns have to be submitted electronically.

A default penalty will be imposed by the tax authority if VAT
returns are not submitted on time, or the related tax is not paid
by the due date. The penalty is 1% per day for maximum of
ten days plus interest. If a return is not submitted on time the
VAT will be estimated by the tax authority. The estimation will
be cancelled when a return is submitted and an extra surcharge
of 5,000 ISK will be charged. If the accounting period is the
calendar year and estimation is made the accounting period
will be changed to two months regardless of the turnover.
If estimation has been made for two consecutive accounting
periods the tax authority can remove the VAT registration and
the business has to register again with accounting period of
one month.
Iceland

No.

Penalties and interest will be applied for errors and
omissions made on tax returns (the same percentages as in no 6
are valid here). Penalties can also be applied where the business
has failed to maintain adequate records, provide information, or
makes repeated mistakes.
serious matters.

claimed if they are not registered in Iceland?
Yes, it may be possible to reclaim the VAT input incurred in

and pre-printed
the sellers name and social security number
the invoice date
the customers name and social security number
type of transaction, quantity, unit price and total price
the total amount of VAT charged expressed in ISK
if the invoice consists of 24% and 11% VAT the invoice
must show the total of those values separately.

services, it must:
or services
show the total of those values separately
Where a business makes retail sales and makes a sale of goods or
services for 6,000 ISK or less including VAT, a simplified VAT
invoice can be issued.
Electronic invoices must contain the same information as paper
invoices. If a firm uses an electronic computer system that the
tax authority has approved the invoice number does not need to
be pre-printed.
Further information
It is necessary to return a yearly tax report to the tax authority

in addition to the VAT returns.
For further information on indirect tax in Iceland please contact:
Theodr S. Sigurbergsson
T +354 520 7000
E theodors@grantthornton.is
Ireland

Reduced rates include 13.5% (building services), 9% (tourism related) and 4.8% (livestock).
Zero-rated goods and services include certain foods/drinks, oral medicines and childrens clothes.

to these rates?
No.
Value Added Tax (VAT) is the principal indirect tax in the Republic of Ireland (ROI). It is a tax on consumer
expenditure, and is collected on business transactions and imports.
Yes. It relates to the annual turnover of taxable transactions in the ROI, and once the limit has (or is likely
to be) reached, it is necessary to register. The thresholds are 75,000 (sale of goods) and 37,500
(supply of services).

No. There is no registration limit for businesses that are not established in the ROI and they will need to
register as soon as they start to make taxable transactions. Different registration requirements also apply
to businesses involved with distance sales made within the European Union (EU), eg internet sales.

No.
Most businesses are required to submit VAT returns on a bi-monthly basis, eg January/February. However,
the Irish Revenue may determine that returns can be submitted on a quarterly, six monthly or an annual
basis.

Yes. If a VAT return or the corresponding payment is submitted late, interest and a penalty can be
imposed.
Yes. A detailed annual VAT return must be submitted. Additional declarations have to be submitted in
respect of certain supplies made to customers who are registered for VAT elsewhere in the EU (VIES
returns). Declarations also have to be submitted in certain circumstances in connection with goods
moving to or from other countries in the EU (Intrastat).
Ireland

Yes, in certain circumstances and subject to certain conditions (EU refund claims and 13th directive
claims).
Deduction of VAT
VAT incurred on business entertainment, food and drink or other personal services for the business or
staff, hotel accommodation (other than for a qualifying conference), petrol and the purchase, hire or
leasing of cars* is not generally deductible.
*20% of VAT incurred allowable in certain circumstances.

in the Republic of Ireland and in other European Union (EU)
countries.
VAT is a tax on consumer spending. It is collected by
VAT-registered traders on their supplies of goods and services
affected within the state, for consideration, to their customers.
Generally, each such trader in the chain of supply from
manufacturer through to retailer charges VAT on his/her sales
and is entitled to deduct from this amount the VAT paid on
his/her purchases.
A transaction is within the scope of Irish VAT if the
interpretation.
it takes place in Ireland
RoI, or has a liability to become registered
There are five rates of VAT that are applied to goods and
services in Ireland; the standard rate (23%), the reduced rate
(13.5%), the second reduced rate (9%), the rate for livestock
(4.8%) and the zero rate. In addition, some goods and services
are exempt from VAT.
Most goods imported into Ireland from outside the EU are
custom duty.
Ireland

supplies of goods or services in the course or furtherance
of business must register for VAT if the value of its taxable
supplies in Ireland exceeds the annual registration limits, or is
expected to exceed the annul limits in the near future.
A business must register for VAT as follows:
1. The general turnover threshold for the supply of goods
is 75,000; however persons supplying goods liable at the
reduced or standard rates which they have manufactured
or produced from zero-rated materials must register if their
turnover is 37,500 or more.
2. The general turnover threshold for the supply of services
is 37,500; whoever for persons supplying both goods and
services where 90% or more of the turnover is derived from
supplies of goods (other than of the kind referred to in the
above paragraph) then the threshold for goods applies.
3. Intra-community acquisitions of goods for business
purposes by a person in the Member State exceed 41,000.
4. Distance sales of goods by a foreign trader to non-registered
customers in the Member State exceed 35,000.
5. Persons not established in the Member State but supplying
goods and services here must register regardless of the level
of turnover.
6. Persons receiving services from abroad for business
purposes in the Member State must register regardless of the
level of turnover.
Where a non-established EU based business is involved

with distance selling, registration for VAT in Ireland may also
be required. Distance selling occurs when a taxable supplier
in one EU country supplies and delivers goods to a customer
year, or the equivalent in its own currency. Ireland has adopted
the minimum annual threshold of 35,000.
persons in Ireland will be subject to VAT at the appropriate
distance sales to Ireland exceeds the 35,000 threshold:
the supplier becomes liable to register for VAT in Ireland
Ireland becomes the place of supply
any further sales to customers in Ireland are subject to Irish
VAT at the appropriate rate.
Suppliers can choose to register for VAT voluntarily in Ireland
before the threshold is reached.

Therefore, once a person is registered for VAT, all of their
the natures of some of those activities are very different.

Businesses that are not established in Ireland cannot avail of
the normal VAT registration thresholds. As soon as these
businesses commence trading, they will need to register for
VAT in Ireland, irrespective of the level of turnover.
Ireland

your country?
Identification.

It is not necessary to appoint a VAT representative to act on
behalf of a non-established business for VAT purposes but an
option to do so is available.

Most businesses are required to submit VAT returns on a bimonthly basis. However, the Irish Revenue may agree that
returns can be submitted on a quarterly or 6 monthly basis
if the level of VAT payment is low. Businesses that are in a
constant repayment position (because of the nature of their
activities) can apply to submit returns on a monthly basis to
improve cash flow.
All VAT returns have to be submitted on the 23rd of the
following Month (eg the return for the January/February
period must be filed by 23 March) together with payment of
electronically.

A penalty may be imposed by the tax authority if VAT returns
due date. In practice, interest is generally charged (rather than a
penalty).

VIES
Traders who sell goods or supply services to VAT registered

traders in other EU Member States must complete VIES
returns (on a monthly or quarterly basis) and submit them
electronically. There are no minimum thresholds involved and
all such supplies must be reported.
Intrastat
Traders that acquire goods from other EU member states

exceeding 500,000 annually and/or dispatch goods to other
EU Member States exceeding 635,000 annually must complete
the detailed monthly Intrastat return. In addition, all traders
involved with intra EU transactions must complete boxes E1
and E2 (goods) and boxes ES1 and ES2 (services) on their VAT
3 returns.
Are penalties imposed in other circumstances

omissions made on tax returns (particularly when returns are
being audited by the revenue commissioners, or where the tax
is paid late. Penalties can also be applied where the business
(including additional declarations), or make repeated mistakes.
serious matters.
Ireland

claimed if they are not registered in Republic of
Ireland?
circumstances.
Two schemes exist, one for businesses established in the
EU (called a European VAT Refund (EVR)) and another for
businesses established outside the EU (13th directive claims).
The EU cross border refund scheme (EVR) is available in
all EU Member States, and enables a business established in an
EU country to recover VAT incurred in another Member State.
person established in an EU Member State other than the one
must not be registered or liable, or eligible to be registered
in the Member State from which he is claiming the refund
goods or services in the Member State of refund, apart from
is submitted electronically by the claimant to the tax authority
in the claimants own country the tax authority transmits the
claim to the VAT authority of the country from whom the
incurred.
A person who is engaged in business outside the EU
(and who is not engaged in business in Ireland) may claim
repayment of Irish VAT on most business purchases in Ireland
using a 13th directive claim. Currently, the main conditions
governing repayment are:
Where the claimant is carrying on business outside of
the European Union s/he must provide written proof of
economic activity issued by the competent authority of his/
her own State
The goods/services giving rise to the claim must be goods/
services in respect of which tax would be deductible if the
claimants business was carried on in Ireland, and must not
include goods for supply within the State or motor vehicles
for hiring out for utilisation within the State
The business for which the goods/services were purchased

must be a business which would be taxable if carried on in
Ireland
The original supplier invoices must be submitted with the
claim form.

the invoice date
if the supply relates to a supply to a person registered for
VAT in another EU Member State, the VAT identification
number of the person to whom the supply was made and an
indication that a reverse charge applies
any discounts or price reductions not included in the unit
price
the total amount of VAT charged expressed in Euro.
Simplified invoices may be issued where the total value of the
sale is 100 or less.
For further information on indirect tax in the Republic of Ireland please contact:
Jarlath OKeefe
T +353 (0)1 680 5817
E jarlath.okeefe@ie.gt.com
Ireland
Israel

Some transactions are subject to zero VAT rate (export transaction, providing tourist services).
Some transactions are exempt from VAT (transaction in EILAT free zone, residential rental).

these rates?
No.
Value Added Tax (VAT) is the principal indirect tax in the Israel. It is a tax on transaction in Israel and import
of goods. However, a wage tax shall be imposed on the activity in Israel of a non profit organization at a
rate of 7.5% and a wage and profit tax shall be imposed on the activity in Israel of a financial institution at
a rate of 17%.
No. However, exempt dealer (turnover does not exceed of approximately NIS 100,000 a year) report only
once a year.

Yes.

Yes.
Monthly basis. However, the period for a dealers return shall be two months, if his business turnover in
the determining year did not exceed NIS 910,000.

Yes.
Yes. Penalties can be imposed for a range of errors or omissions as: fine for not keeping books, fine for
failure to pay on time.
Israel

No.
Deduction of VAT
Only a dealer is entitled to deduct input tax. Input tax on private vehicle cannot be deducted, a dealer shall
not be entitled to deduct input tax on the acquisition of his own dwelling or its construction, input tax in
respect of an employee an asset or a service, such as a meal, housing, gifts or entertainment intended
for the enjoyment, profit, welfare or benefit of an employee or of members of his family, input tax on
hospitality except for input tax on hospitality extended to a visitor from abroad.

the Israel.
Section 2 of the Israeli VAT Law (hereinafter: The VAT
Law) states that: Value Added Tax shall be imposed on
transactions in Israel and on the importation of goods.
Although VAT is ultimately borne by the consumer by
A dealer will charge VAT (output tax) on its sales or service,
and incur VAT (input tax) on its purchases (including any VAT
paid at importation). The difference between the output tax
and the deductible input tax in each accounting period will be
the amount of VAT payable by the dealer to the tax authority.
Where the input tax exceeds the output tax, a refund can be
claimed.
A dealer is defined as a person, other than a non-profit
organization or a financial institution, who sells any asset or
renders any service in the course of his business, and also a
person who effects an occasional transaction.
A transaction is within the scope of Israel VAT if the
1. the sale of an asset or the performance of a service by a
dealer in the course of his business, including the sale of
equipment
2. the sale of any asset, if the input tax imposed on its sale to
the seller or on its importation by the seller was deducted
3. an occasional transaction
4. it takes place in the Israel.
Section 14 of the VAT Law, addressing sales type transactions,
states that: An asset shall be deemed to have been sold in
Israel, if the asset was in Israel at the time of its delivery to the
purchaser, or if it was exported from Israel and the asset is
intangible if the seller is an Israel resident.
Section 15 of the VAT Law, addressing service type

transactions, states three alternatives, whereby it is sufficient for
one of them to exist to determine that the service will be seen as
a service rendered in Israel. Below are the three alternatives:
1. it was rendered by a person whose business is in Israel;
whoever has an agent or branch in Israel will be deemed, in
this respect, as a person who has a business in Israel
2. it was rendered to an Israeli resident
3. it was rendered in respect of properties located in Israel.
Usually, a transaction in Israel and import of goods are subject
to VAT at a standard rate of 17%. There is some exception
which zero VAT applied or exempt.
Deduct input tax:
1. a dealer is entitled to deduct from the tax to which he is
liable the input tax included in a tax invoice lawfully issued
to him or in an import entry or other document approved
by the Director for this purpose, on condition that the
import entry or other document name the dealer as owner
of the goods and that the deduction be made within six
months after the invoice, the entry or the document was
issued
2. input tax shall not be deducted, unless the input is to be
used in a transaction liable to tax.
Businesses that make exempt supplies are unable to claim all of
the input tax that they incur, so the VAT paid to suppliers will
be a real cost.
Israel

The person liable to tax a dealer, a non-profit organisation or
a financial institution, even if exempt of paying the tax or if all
his transactions are exempt of tax, except for:
1. a person all whose transactions are exempt of tax under
section 31(1) or 31(2) of the law (rentals for residential
purposes for a period of not more than 25 years, giving
possession of real estate against key-money)
2. a person, the tax on all of whose transactions is paid by the
recipient of the service ynder regulation 6A of the VAT
regulations
3. a person, for whose tax on real estate sold by him is paid
under regulation 6B of the implementation regulations and
who is not a non-profit organization, a financial institution,
or a dealer within the meaning of sub regulation (d) of the
said regulation.

Yes. Obligation to register:
1. dealers, non-profit organisations and financial institutions
must register at the time and in the manner prescribed
2. a person liable to tax who is a foreign resident who has
business or activity in Israel shall within thirty days after
he began to carry on business or activity in Israel appoint
a representative whose permanent place of residence is in
Israel, and he shall so inform the Director, attaching the
representatives written consent
3. a representative appointed under this section, shall, for
purposes of the VAT Law, be treated like the person liable
to tax.

your country?
Proposed legislation - It is proposed that for the supply of
electronic services, communication services and radio and
television services to a private individual (not to a dealer, nonprofit organisation, financial institution) by foreign resident
will be subject to VAT in Israel, the tax liability shall be on the
foreign resident and he will obliged to register for vat in Israel.

Yes. Section 60 of the VAT Law determined as follows: A
person liable to tax who is a foreign resident who has business
or activity in Israel shall within thirty days after he began to
carry on business or activity in Israel appoint a representative
whose permanent place of residence is in Israel, and he shall
so inform the Director, attaching the representatives written
consent.
A representative appointed under this section, shall, for
purposes of the VAT Law, be treated like the person liable to
tax.

Monthly basis. However, the period for a dealers return shall
be two months, if his business turnover in the determining year
did not exceed NIS 910,000.

Yes.
1. fine for delay in filing return if a person liable to tax did
not file a periodic return when it must be filed, than he shall
be liable to an arrears fine of NIS 219 in respect of every
two weeks or part them
2. fine for not keeping books in a person liable to tax did
not keep account books or records as prescribed, or if he
kept them in substantive deviation from the provisions
of this Law or of the regulations there under, then the
Director may impose a fine equal to 1% of the total price
of his transactions or of the total amount of his wages and
profit, as the case may be, for the tax year in which books or
records were not kept as prescribed
3. fine for failure to pay on time if tax was not paid at the
prescribed time, then in addition to linkage differentials
and interest under section 97 an arrears fine 0f 0.25% of
the overdue amount shall be added to it in respect of every
week or part thereof in period of delay of up to six months,
and of 0.5% in respect of every week or fraction thereof in
the period of delay after six months.
Israel


claimed if they are not registered in Israel?

services, it must:
or services
No.
For further information on indirect tax in Israel please contact:

Asaf Behar
T +972 + 03-7106638; 03-7106644
E asaf.behar@il.gt.com
Yigal Rofhe
T +972 + 03-7106644
E yigal.rofhe@il.gt.com

the sellers name (dealer name) and address
the title Tax invoice
the word original
the word authorised dealer
the dealer VAT registration number
the invoice date
the customers name and address and is VAT registration
number
delivery note number and date, except if the invoice was
held at the goods delivery
amount of the goods
value of the transaction without VAT
amount of the VAT and the words Value added tax and
the tax rate (17%, 0%).
total amount include VAT.
Italy
Standard rate of 22% most of goods and services standard rated unless defined to be reduced
rated or exempted.
Reduced rate of 10% applying to food, hotel services and shops, drugs, etc.
Reduced rate of 5% applying to medical, welfare and educational services rendered by social wellbeing cooperatives towards senior citizens, drugs-addicted, persons affected by AIDS, disables,
refugees, imprisoned persons, etc.
Reduced rate of 4% usually, applying to consumer staples, houses, fertilizers, company canteens,
etc.
Zero rated supplies export sales and similar transactions, international services and intra-EU sales.
Exempt supplies VAT-exempt transactions generally comprise services delivery. Some of them
(financial operations, bets) are VAT-exempt for practical reasons, as they are not fit for VAT
application. Others refer to the supply of special public interest services (healthcare, school etc.)
so the exemption is for more favourable conditions for the end-user.

to these rates?
The Stability Law for 2016 stated the following increases of the VAT rates:
The standard rate will be increased to 24% starting from 2017 and to 25% starting from 2018
The reduced VAT rate will be increased to 13% starting from 2017.
Such increases will enter into force whether no other measures will be implemented to generate an
increase of State revenues or a reduction of Treasury costs.
Imposta sul Valore Aggiunto (IVA) is the principal indirect tax in Italy. It is a value added tax on consumption
of goods and services, that is levied at each stage of the production and distribution.
No. Any legal or physical person who carries on a business or undertakes an artistic or professional
activity independently from an employer, or who sets up a permanent establishment in Italy, must register
for VAT before commencing the activity (i.e. before performing any supply and/or purchase of goods and/
or services).

Yes, with the exception of distance selling rules.
Italy

European Union (EU) taxpayers, without a permanent establishment in Italy, can register for VAT in the two
following alternative ways:
via the direct identification procedure (as per art. 35-ter of the VAT Act); via the appointment of an
Italian resident as its VAT representative (as per art. 17, para 3 of the VAT Act).
A non European Union (EU) taxpayer, without a permanent establishment in Italy, can register for VAT via
the appointment of an Italian resident as its VAT representative (as per art. 17, para 3 of the VAT Act) only.
All taxpayers are required to file:

an annual VAT data communication either electronically or through authorised intermediaries by the
end of February following the year the return refers to. It is possible to avoid the filing of the annual
VAT data communication, should the annual VAT return be filed by the end of February (this rule will
change starting from 2017)
an annual VAT return either electronically or through authorised intermediaries by the end of
September following the year the return refers to (this rule will change starting from 2017).

Yes. If the VAT return, or the payment, is submitted lately, penalties apply. The quantification and nature of
such penalties depends on the gravity of the omission.

Furthermore, specific declarations have to filed to:
transactions with counterparties resident in tax havens
all transactions carried on during a calendar year.


Imposta sul Valore Aggiunto (IVA) is the principal indirect tax
in Italy.
It is a value added tax on consumption of goods and
services, that is levied at each stage of the production and
distribution. Liability for VAT rests with the person supplying
the taxable goods or services or importing goods into Italy.
However, the supplier is allowed to deduct from its VAT
liability on sales made the amount of VAT paid and properly
invoiced to it in relation to purchases effected by it, or VAT
paid by it at importation. The actual burden of the tax is
therefore borne by the final consumer.
VAT is chargeable on supplies of goods and services for a
consideration made in Italy by a taxpayer acting as such.
The constituent elements of the charging provision are
as follows:
there must be a supply (either of goods or services)
the supply must be made in Italy rather than elsewhere
the supply must be a taxable supply (i.e. chargeable to VAT
at the standard or reduced rates)
the supply must be made by a taxpayer (in Italy, a taxpayer
is any person carrying on a business, or an artistic or
professional activity registered for VAT purposes)
the supply must be made in the course or furtherance of
a business.
In Italy the following categories of VAT rates are applicable:

standard rate of 22%
reduced rate of 10%
reduced rate of 5%
reduced rate of 4%
zero rate.
In addition, some goods and services are exempted from the
tax. Businesses that make exempt supplies are unable to recover
custom duty.
Italy

Any legal or physical person who carries on a business or
undertakes an artistic or professional activity independently
from an employer, or who sets up a permanent establishment
in Italy, must register for VAT, by filing a specific application
form with the Italian tax authority. Under certain conditions,
simplifications are foreseen for business with a yearly
turnover below 30,000. Under certain other conditions, other
simplifications are foreseen for business with a yearly turnover
between 15,000 and 40,000 (depending on the type of activity
carried out).
A penalty may be imposed by Italian tax authority if a
business fails to register at the correct time.

As mentioned above any legal or physical person who
carries on a business or undertakes an artistic or professional
activity independently from an employer, or who sets up a
permanent establishment in Italy, must register for VAT, by
filing a specific application form with the Italian tax authority.
The VAT registration procedure must be completed before
commencing the activity (ie before performing any supply and/
or purchase of goods and/or services).
With reference to distance sales, if an EU seller carries out
distance sale transactions in Italy for an overall annual amount
below 35,000, it does not have to apply the VAT in Italy but
in the origin country, unless it opts for the VAT taxation in
Italy.
The distance sale rule does not apply to the supply of new
means of transport or to the supply of goods supplied under a
supply and installation contract.

your country?
Effective 1 January 2015, article 58 of Directive 2006/112/EC
was amended. In line with the EU VAT Law, the Italian VAT
rules determining the place of supply of electronically supplied/
digital services supplied to private consumers (B2C) changed
from the Member State where the supplier belongs (ie where
established) to the Member State of the consumer. The result
of this is that local VAT is chargeable at the applicable rate in
each of the Member States in which electronically supplied
services are made (ie where the customer belongs). To ensure
compliance with this, suppliers (Extra EU as well as EU) have
the choice to either:
register for VAT in each Member State where their

customers reside
elect to register under the EU VAT MOSS (VAT Mini One
Shop Stop) simplification scheme in an one Member State
(where the suppliers are established) to report and pay VAT
due on sales of digital services to consumers in the EU.

A European Union (EU) taxpayer, without a permanent
establishment in Italy, can register for VAT in the two
following alternative ways:
via the direct identification procedure (as per art. 35-ter of
the VAT Act)
via the appointment of an Italian resident as its VAT
representative (as per art. 17, para 3 of the VAT Act).
A non European Union (EU) taxpayers, without a permanent
establishment in Italy, can register for VAT via the appointment
of an Italian resident as its VAT representative (as per art. 17,
para 3 of the VAT Act) only.
A foreign business without a permanent establishment
in Italy is required to register only if its Italian supplies are
towards persons who are not themselves VAT-registered in
Italy or are VAT registered but not established in Italy. Foreign
businesses making taxable supplies to Italian resident businesses
are not requested to VAT register in Italy because, in such
circumstances, the Italian purchaser of the goods or services
is obliged to account for the VAT on the supplies received
under the reverse charge procedure. This is unless the VAT
registration is requested for other transactions (ie intra-EU
purchases of goods, intra-EU supplies of goods, exports).

All taxpayers are required to file either electronically or through
authorised intermediaries an annual VAT data communication
by the end of February following the year the return refers
to. It is possible to avoid the filing of the annual VAT data
communication, should the annual VAT return be filed by the
end of February following the year the return refers to.
All taxpayers are required to file an annual VAT return
either electronically or through authorised intermediaries by
the end of September following the year the return refers to.
Italy
The annual return permits the final settlement of the

taxpayers VAT payable or receivable. It consists in disclosing
the algebraic sum of all the transactions (both sales and
purchases) carried out all through a solar year. It permits to
establish the turnover and, therefore, whether to benefit from
some simplifications for the following year. Finally it usually
serves as the basis for the tax authorities assessments.
Rules pertaining to the aforementioned returns will change
from 2017.
No additional regular returns are provided. However, all
taxpayers (with some exceptions) are required to determine
their VAT position before the tax authorities on either a
monthly or a quarterly basis. This is done through preparing on
their ledgers a VAT calculation as the difference between VAT
on sales and deductible VAT on purchases, and to complying
with the regular settlement obligation. Should the taxpayer be
in a debt position, they are required to remit to the Treasury
the payable VAT. However, should a VAT credit result from
the VAT calculation, the VAT receivable is carried forward and
offset with VAT debts in the next periodical VAT calculations
or, under certain conditions, asked for refund.
Taxpayers with a limited turnover (below 400,000.00 if
they provide services or 700,000.00 if they supply goods) can
opt for quarterly calculations provided that they increase the
VAT amount to be remitted to the Treasury by 1% as interest.
The other taxpayers must determine their VAT obligations
through regular computations to be effected on a monthly basis
by the 16th day of the following month.

The main administrative penalties can be summarised as
follows:
failure to submit annual return or submission of return
more than 90 days after the deadline, when taxes are owed:
penalty between 120% and 240% of the total tax owed with
a minimum of 250
more than 90 days after the deadline, but before the expiring
of the deadline for filing the annual return for the next fiscal
year, when taxes are owed: penalty between 60% and 120%
of the total tax owed with a minimum of 200
more than 90 days after the due date, when taxes are not
owed: penalty between 150 and 500
tax payment violations: failure to pay, late payment or

insufficient payment of VAT on account, of VAT resulting
from periodic payments or of adjusted VAT resulting from
the annual return: penalty of 30% of the unpaid amount.
In cases where payments occur within 90 days after the
deadline, the penalty is 15% of the amount paid with delay.

Black list reporting
This is a mandatory form taxpayers must file with the Italian

tax authority reporting the data concerning sales and purchase
of goods and services supplied or received to/by taxpayers
resident or established in black-listed countries. Since 1 January
2014, such transactions, among others, should be mentioned
in a section of the form so-called Modello Polivalente. Such
form, filled in only in the section related to above mentioned
transactions, will have to be filed to the Italian tax authorities
by the 10th or 20th of April of the year following the one the
Modello Polivalente refers to (depending of periodicity of
VAT calculations).
Reporting of the operations occurred in the calendar year
This reporting obligation must be fulfilled by all Taxpayers.

The transactions carried out in to the calendar year be
mentioned in such a report are as follows:
business to business transactions
business to consumer transactions: the value of the transaction
should be equal to or exceed 3,600 (including VAT).
The transactions related to FY 2013 will have to be indicated in
a specific section of the form so-called Modello Polivalente,
to be filed, with reference only to such Section, within the
10th or 20th April of the year following the one of reference
(depending of periodicity of VAT calculations).
EC-lists (ECL) reporting
For intra-EU movement of goods VAT legislation requires

certain reports in connection with this trade. ECLs are required
for dispatches of goods to other Member States and for arrivals
of goods from other Member States.
From 1 January 2010, ECLs must be filed with the Italian
customs authority in relation to the supply of services provided
to or received from a taxable person established in another EU
Member State.
Italy

not comply with the VAT rules:
failure to issue an invoice subject to VAT: from 90% to
180% of the VAT to be charged
failure to issue an invoice not subject to VAT, when the
failure has relevance for income tax purposes: from 5% to
10% of the amount of the invoice
failure to issue an invoice not subject to VAT, when the
failure has not relevance for income tax purposes: from 250
to 2,000
false declaration: return in which the amount of tax
indicated is less than that which is due, or in which the
deductible or reimbursable amounts are higher than those
claimable: penalty between 90% and 180% of the increased
tax and/or of the credit difference
request for reimbursement which differs from that of
the return and thus for a higher amount than it appears
on the return: penalty of 30% of the amount unlawfully
reimbursed
form filled in incorrectly according to the administrative
regulations. Omission of information or incorrect
information for the identification data of the taxpayer or his
agent; for the calculation of the taxes or for anything else
which is necessary regarding the carrying out of checks:
penalty from 250 to 2,000.
Criminal penalties are provided in a limited number of cases
if the Italian tax authority proves that the behaviour of the
taxpayer is fraudulent; there may be evasion of VAT liabilities
or overstatement of VAT credits by, for example, the violation
of accountancy rules, use of counterfeit documents and
invoices, the hiding and the destruction of accountancy records.

claimed if they are not registered in Italy?
circumstances.
Member States and enables a business established in an EU
country to recover VAT incurred in another Member State.
the Member State from which he is claiming the refund

goods or services in the Member State of refund, apart from
was incurred.
in Italy or purchases of goods and services pertaining to their
activity. The scheme is available to any person carrying on
a business established in a third country ie outside the EU,
provided that in the period of the claim:
he was not registered or liable to be registered for VAT
in Italy
he made no supplies of goods and services in Italy other
comparable system of turnover taxes, unless the Italian tax
established in Italy. Currently, these countries are Israel,
Norway and Switzerland only.
The claim has to be made by 30 September of the year
following that in which the VAT was incurred.

A VAT invoice, pursuant to Article 21, paragraph 2,
Presidential Decree 633/1972, contains the following
information:
the issue date
progressive number which identifies it in a univocal manner
companys name or corporate name, name and surname,
residence or domicile of the seller or supplier, the tax
representative as well as the location of the permanent
establishment for non-resident persons
VAT number of the seller or supplier
Italy
companys name or corporate name, name and surname,

residence or domicile of the seller or supplier, the tax
representative as well as the location of the permanent
establishment for non-resident persons
VAT number of the seller or supplier or, in case of taxable
persons established in another Member State of the
European Union, the VAT identification number attributed
by the Member State of establishment; in case the seller or
supplier resident or domiciled in the territory of the State
is not engaged in the furtherance of the business, trade or
professional activities, tax code
nature, quality and quantity of the goods and services
concerned by the transaction
considerations and other data needed to determine the
taxable amount, including the data related to the goods
transferred with a discount, premium or allowance under
Article 15, first paragraph, no. 2
considerations related to the other goods transferred with a
discount, premium or allowance
rate, amount of the tax and taxable amount with rounding
up to the euro cent
date of the first vehicle matriculation or registration in the
public registries and number of kilometres travelled, hours
sailed or flown, if it refers to intra-Community supply of
new means of transport, pursuant to Article 38, paragraph
4, of Decree-law N 331 of 30 August 1993, converted, with
amendments, into Law N 427 of 29 October 1993
annotation that the same is issued on behalf of the seller or
supplier, by the buyer or the client or by a third party.
The invoice should be issued also for the other types of
transactions and it contains, in place of the amount of the
tax, the following notes with the indication of the relevant
community or national regulation:
supplies related to goods in transit or deposited in locations
subject to customs surveillance, not subject to tax pursuant
to Article 7-bis, paragraph 1, with the annotation not
subject to taxation
non-taxable transactions under Articles 8, 8-bis, 9 and
38-quarter, with the annotation non-taxable transaction
exempt without credit transactions under Article 10, except
for those stated under no. 6) bearing the annotation exempt
transaction
transactions subject to the margin scheme provided for by
Decree-law N 41 of 23 February 1995, converted, with
amendments, into Law N 85 of 22 March 1995, bearing
the annotation, depending on the case, margin scheme
second-hand goods, margin scheme works of art or
margin scheme antiques or collectors items
transactions carried out by travel and tourism agents subject

to the regime under Article 74- ter, bearing the annotation
margin scheme travel agencies.
A simplified VAT invoice can be issued where a business makes
retail sales and makes a sale of goods or services for an overall
amount not exceeding 100.
electronic format. Pursuant to article 21, paragraph 1,
Presidential decree 633/1972, electronic invoicing means the
invoice that was issued and received in any electronic format;
the use of electronic invoicing is subject to acceptance by the
recipient. Invoicing either on paper or electronic, by the client
or a third party resident in a country with which there are no
legal instruments to regulate reciprocal assistance, is allowed
provided that prior notification is given to the revenues agency
and that the national taxable person has commenced the activity
at least five years before and that he has not received in the
previous five years, notifications of tax proceedings or disputes
for substantial violation as regards VAT. The method, contents
and electronic procedures of the notification is determined by
regulations of the revenue agency director. The invoice, on
paper or electronic, is intended to have been issued at the time
of its delivery, dispatch, transmission or when made available to
the supplier or customer.
For further information on indirect tax in Italy please contact:
Simonetta La Grutta
T +39 02 783351
E simonetta.lagrutta@bernoni.it.gt.com
Kazakhstan

Financial, educational, medical, veterinary, services, pharmaceuticals, land and residential buildings
are exempt from VAT.
Zero rate applies to exports of goods, certain international transportation services, and sale of
goods/services to companies registered in a special economic zone.

to these rates?
VAT is expected to be replaced by sales tax in 2017.
Value Added Tax (VAT) and Excise duty are the principal indirect taxes in Kazakhstan. VAT is a tax on
consumer expenditure, and is collected on business transactions and imports. Excise duty shall be levied
on the goods produced in Kazakhstan or imported into Kazakhstan, such as all types of alcohol, alcoholic
products, tobacco products, gasoline (excluding aviation fuel), diesel fuel.
Shall the annual turnover of transactions in Kazakhstan certain limit it is required to register as VAT payer.
Currently, the limit is approximately USD 181,000.

No. There is no registration limit for businesses that are not established in Kazakhstan except for those
which register a branch or representative office in Kazakhstan.

No.
Businesses are required to submit VAT returns quarterly, covering three month accounting periods.

Yes. If a VAT return was failed to be submitted on time, penalty can be imposed. If tax was paid late then
penalty, under certain circumstances, and late payment interest could be imposed.
Yes. Taxpayers would be required to file additional tax forms with respect to imported goods.

No, only taxpayers, who obtained tax registration, are allowed to reclaim input VAT.
Deduction of VAT
Deduction of VAT, which is not allowed for offset, is possible under certain circumstances.
Kazakhstan
VAT is the principal indirect tax in Kazakhstan. The tax rate

could be:
12% applies to sales taking place (or deemed taking place)
in Kazakhstan and imports;
0% applies to exports of goods from Kazakhstan,
international transportation services, sales of approved
goods to a company registered in a special economic zone.
Registration as a VAT payer becomes mandatory if taxable sales

exceed approximately USD 180,000 during calendar year. VAT
registration is optional for all others.
Registered VAT payers must charge VAT on their sales and

may claim a credit for input VAT indicated on the suppliers
VAT invoices. VAT payers tax liability is the excess of output
VAT over corresponding input VAT.
A credit for input VAT cannot be claimed if it was paid
in connection with sales exempt from VAT or sales regarded
as occurred outside of Kazakhstan. In case of mixed sales (i.e.
some subject to and some exempt from VAT), the amount
of input VAT can be calculated proportionally or by tracing
input VAT directly to the sales to which it relates. The chosen
method should be indicated in the taxpayers tax accounting
policy and cannot be changed during a calendar year.
VAT charged on a car must be capitalized into the initial
cost of the car and then deducted through tax depreciation
charges.
If a foreign non-established company provides services
to a registered VAT payer, these services need to be tested
for whether or not they are deemed provided in Kazakhstan
for VAT purposes. If a particular service is deemed provided
in Kazakhstan for VAT purposes, the buyer (i.e. Kazakh
registered VAT payer) should self-charge VAT on the service
fees.
VAT Refund
Input VAT incurred in connection with exports subject to VAT

at 0% can be claimed for refund. Excess of input VAT over
corresponding output VAT is refundable subject to conditions
and exceptions. In practice, the tax authorities tend to deny a
refund for any formal reason.
Refund can be claimed within the statute of limitation of 5
years. Past this period, the refund option expires, but the excess
can still be carried forward indefinitely to offset future VAT
liability.

No, a foreign company cannot register as a VAT payer until it
has set up a branch or representative office in Kazakhstan.

in your country?
Not applicable.

Not applicable.

VAT returns are due on quarterly basis. The deadline for
a regular VAT return is the 15th day of the second month,
following the quarter reported. The deadline for the payment of
tax liability is the 25th day of the second month, following the
quarter reported.

For the first late submission, the tax authority will issue
a notification with the warning to the tax payer. If another
submission or payment is late within the next 12 months, a
fixed percentage penalty is imposed on that occasion.
Failure to pay taxes on time is punished by imposing, under
certain circumstances, penalties and late payment interest.
Kazakhstan

Businesses that import goods from the territory of Custom
Union should submit a special VAT return to the tax
authorities.

Administrative penalties and interest can be applied for
errors and omissions made on tax returns. Penalties can also
be applied where the business has failed to maintain adequate
records, document securing, etc.
serious matters.

claimed if they are not registered in Kazakhstan?
No, only registered VAT payers can claim a credit for input
VAT incurred in Kazakhstan.

VAT invoice should show the following information:
number of invoice in Arabic numerals only
date of sale (if invoice issued electronically)
date when VAT invoice was issued
address of the seller and buyer
status of consignor or consignee (if applicable)
code of the foreign currency and exchange rate (if
applicable)
business identification number of the seller and buyer
number of the sellers VAT registration certificate
name of the services/goods sold
the amount of taxable (non-taxable) sale
VAT rate
VAT amount
total amount inclusive of VAT.
For further information on indirect tax in Kazakhstan please contact:
Yerzhan Dossymbekov
T +7 727 311 1340
E yerzhan.dossymbekov@gtkaz.com
Kazakhstan
Republic of Kosovo
Currently there is only one VAT rate of 16%.

to these rates?
Ministry of Finance may issue a sub-legal act introducing reduced and higher VAT rate for designated
supplies of goods and services. The reduced rate will not be lower than 5% and the higher rate will be not
higher than 21%.
Value Added Tax (VAT) is the principal indirect tax in the Republic of Kosovo. It is a tax on consumption,
Yes. It is required to register for VAT from the moment when total supplies in the previous 12 month
period, exceed a threshold of 50,000.

No. There is no registration limit for businesses that are not established in the Republic of Kosovo, they
will need to register from the beginning of their economic activity in Kosovo.

In certain circumstances, a non-established person shall appoint a fiscal representative.
Tax period for all taxable persons is each calendar month; therefore a taxable person shall submit VAT
returns every month.

Yes, there are local tax declarations, including, urban maintenance and construction tax, education
surcharges and flood prevention expense.

Not applicable.
Republic of Kosovo

the Republic of Kosovo.
It is a tax on consumption which is applied in different
phases of the production, delivery and trade with goods and
services, and in the end it is carried forward from the last
consumer. It is also applied to goods, and certain services,
entering the country. Although VAT in the end is carried
forward from the last consumer by being included in the price
paid, the responsibility for charging, collecting and paying it
to the tax authority at each stage of the process rests with the
taxable person making the supply.
Taxable person is any natural or legal person who is, or
is required to be registered for VAT, and who in Kosovo
independently carries out any economic activity in a regular or
non-regular manner, whatever the purpose or results of that
economic activity.
A taxable person will charge VAT (output tax) on its sales,
and will deduct VAT (input tax) on its purchases (including any
VAT paid at importation). The difference between the output
tax and the deductible input tax in each tax period will be the
amount of VAT payable by the business to the tax authority.
be claimed.
VAT shall be charged on supply of goods and services made
for consideration within the territory of Kosovo by a taxable
person and on the importation of goods in Kosovo.
Currently there is only one VAT rate applicable which is
16%. In addition, some goods and services are exempted with
credit right and some others are exempted with no credit right.
Taxable person that make exempt supplies with no credit
right are unable to claim all of the input tax that they incur, so
the VAT paid to suppliers will be a real cost, while taxable
person that is exempted with credit right is entitled to claim all
the input tax which is used for taxable supplies.
Most goods imported into the Republic of Kosovo are
purposes, it may be possible to reclaim the tax (subject to
certain rules).
Every person who meets all conditions of the definition of

taxable person is required to register for VAT from the moment
when total supplies in the previous 12 month period, exceeds a
threshold of 50,000.
The month in which the threshold is exceeded counts for the
twelve 12 months period calculation. Only that proportion of
the supply which results in surpassing the threshold will be
taken into consideration for purposes of VAT.
When calculating the threshold, the person shall consider
the total amount of all supplies during the previous 12 month
period. Supplies shall be deemed any supplies of any goods and
services at any rate, including those exempt, with or without
right to deduct.
When a person is registered for VAT purposes, Tax
Authorities shall issue such taxable person a registration
certificate containing his information. A physical person
conducting the same or different economic activities and has
several places of economic activity within Kosovo, shall
be identified by one individual and unique VAT
registration number.
A natural person conducting the same or different economic
activities and has several places of economic activity within
Kosovo, shall be identified by one individual and unique VAT
registration number. A partnership and grouping of persons
shall be identified by one single VAT registration.
Every person who has not notified and has not been
registered in due time shall be registered in a compulsory
way by tax authorities with retroactive effect as of the date
of exceeding the threshold. Furthermore, a penalty may be
imposed by the tax authority if a taxable person fails to register
at the correct time.

The normal VAT registration limit does not apply to persons
who are not established in the Republic of Kosovo. The persons
not established in Kosovo are subject to VAT registration, from
the beginning of their economic activity in Kosovo, regardless
of the threshold.
Republic of Kosovo

Taxable person not established in Kosovo which is engaged in
economic activity in Kosovo shall appoint a tax representative
except for those cases that the receiver of the taxable supplies is
liable to report and pay VAT.
The taxable person shall be registered under his own name
and the name of his tax representative within 5 days after the
appointment as tax representative and prior to the starting of
economic activity in Kosovo.

A taxable person shall submit a tax declaration and remit the
related payment not later than the 20th of the calendar month
following the end of each tax period.

Administrative penalty for late declaration is 5% of due tax for
each month or part of the month that is late, with a maximum
administrative penalty of 25% of tax due. While, administrative
penalty of late payment is 1% of tax due for each month or part
of the month that payment is late, up to maximum 12 months.
Furthermore, an interest for late payment at rate of 1.25% per
month is also applicable.

Yes. There are local tax declarations, including, urban
maintenance and construction tax, education surcharges, flood
prevention expense.

Administrative penalty for late declaration is 5% of due tax for
each month or part of the month that is late, with a maximum
administrative penalty of 25% of tax due. While, administrative
penalty of late payment is 1% of tax due for each month or part
of the month that payment is late, up to maximum 12 months.
Furthermore, an interest for late payment at rate of 1.25% per
month is also applicable.

Yes, there are local tax declarations, including, urban
maintenance and construction tax, education surcharges and
flood prevention expense.

Penalties are applicable also to the taxpayer who makes
supplies without being registered for VAT. Such penalties are
provided below:
15% of the VAT due on those supplies if failure to register
is due to negligence of person making taxable supplies of
less than 10,000
25% of the VAT due on those supplies if failure to register
is due to negligence of person making taxable sales of
10,000 or more.
In addition, a taxable person who fails to issue a VAT
invoice, or who issues an incorrect invoice that results in an
apparent decrease in the amount of VAT due or an apparent
increase in the amount of credit claimable shall be liable to an
administrative penalty of:
15% of the apparent decrease or increase in the amount of
VAT due where the failure to issue a VAT invoice or the
issue of an incorrect invoice was due to the negligence of the
taxable person
25% of the apparent decrease or increase in the amount of
VAT due where the failure to issue a VAT invoice or the
issuance of an incorrect invoice was due to the carelessness
of the taxable person.
A taxable person who commits any of the following violations
with respect to VAT shall be liable to an administrative penalty
of 250 Euros for each of the violation:
failure to apply for VAT registration upon reaching the
applicable threshold
failure to apply for removal from the VAT register when
required to do so
failure to display a copy of the VAT registration certificate
in the manner required by applicable law.
Furthermore, a taxpayer registered for VAT who allows
another person to use its unique VAT registration certificate
shall be liable to an administrative penalty of up to 5000. The
person using a VAT certificate belonging to someone else will
be liable for the same administrative penalty.
In addition to the administrative penalties, such cases
shall be presented by the tax investigation unit to the public
prosecutor for criminal prosecution.
Republic of Kosovo

claimed if they are not registered in the Republic
of Kosovo?
Not applicable.

A taxable person who issues an invoice to a taxable person shall
indicate the following data on the invoice:
date of issue
sequential number enabling the identification of the invoice
VAT registration number as well as the fiscal number of the
taxable person under which he supplies the goods
or services
VAT registration number as well as fiscal number of the
customer or the purchaser, if the customer or the purchaser
is liable to pay VAT on goods or services supplied to him
full name and address of the taxable person and his customer
quantity and nature of goods supplied, or the extent and
nature of the services performed
the date on which the supply of goods or of services was
made or completed, or the date of receipt of the payment on
account, in so far as that date can be determined and differs
from the date of the issue of the invoice
the taxable amount on which VAT is charged for each
individual rate or for which the individual exemption
applies, the unit price exclusive of VAT for the goods
or services, and any price reductions and discounts not
included in the unit price
the VAT rate applied
the amount of VAT, except where a special arrangement
is applied
in the case a taxable person supplies goods or services for
which a VAT exemption is prescribed, the invoice
must indicate the provision of the Law that stipulates
such exemption
if a taxable person supplies goods or services where the
customer is liable for payment of VAT, reference to the
applicable provision of the law shall be mentioned
a taxable person who charges VAT on the margin scheme
must state on the invoice the provision of the law pursuant
to which VAT on the price difference is charged
where one of the special arrangements applicable to secondhand goods, works of art, collectors items and antiques is
applied, reference must be made to the relevant articles of
these arrangements
where the person who issues the invoice is liable to pay
VAT as a tax representative, the fiscal number and the
VAT registration number and his full name and address are
obligatory details to be mentioned.
While a taxable person, who issues an invoice to non-taxable
person shall at least indicate the following data on the invoice:
the date of issuance
the time of the supply
a sequential number enabling the identification of
the invoice
the VAT registration number and the fiscal number under
which the taxable person supplies the goods or services
the full name and address of the taxable person
the full name, address and tax identification numbers of
the customer
the total amount to pay including VAT
the sales value of the goods or services excluding VAT
the amount of VAT
if a taxable person supplies goods and services at different
tax rates, he must show the value including VAT separately
for each tax rate and also show the value of VAT separately
if a taxable person supplies goods or services for which
VAT exemption is prescribed, the invoice must indicate the
provisions of the law which stipulate the exemption.
For further information on indirect tax in Kosovo please contact:
Maja Filipceva
T +389 2 3214 700
Latvia
Standard rate of 21% applies for most goods and services.

Reduced rate of 12% applies to some goods and services including some medical products,
special products for new-born babies, local public transportation, educational literature, periodical
newspapers, heating products generated from forestry, heating and hotel services.
0% applies to goods and services supplied to diplomatic structures, International and EU
organisations, NATO.
Most medical, social- care, educational, and financial services are VAT non-applicable. VAT is also not
applied to some real-estate transactions, gambling, social, cultural and postal services.

to these rates?
No.
Value Added Tax (VAT) is the principal indirect tax in Latvia, income from VAT makes the biggest part of
the State Budget. Along VAT, excise tax and customs duties also is a part of indirect tax system in Latvia.
Yes. There is a VAT registration threshold 50,000 (the total annual turnover of the taxable transactions
in Latvia), there are some exceptions to the above mentioned threshold, based on the kind and number of
the performed transactions:
10,000 threshold for The purchase of goods in EU (if performed by non-taxable legal person)
no threshold for services provided to and received from company settled in other EU member state
(a non-registered taxable legal person has to register from the very first transaction).

No. In general the VAT directive is quite widely incorporated in Latvian VAT law and there is no registration
limit for businesses that are not established in Latvia they have to register as soon as they start to
perform the taxable transactions. The duty of registration does not apply to those situations when
a company moves or sells goods operating through the customs warehouse or free zone. For VAT
purposes it is better to analyse each business in detail as the regulation is very complex.

Different registration rules are applied to distance sales made within the EU if the distance sales
is performed by the tax-payer of another member state, a registration threshold would be 35,000 (there
is no threshold for distance sales of excised goods). But it can voluntarily register before reaching this
threshold.
Latvia

Yes, the companies from third countries should apply for VAT registration only via authorised person. The
fiscal representative (which is not the same as above-mentioned authorised person) is a new invention in a
Latvian VAT Law and it can be a very effective tool for companies supplying goods from third countries in
order to sell the goods further in the EU (they would not need to register in the VAT register).

But due to the fact that there are very high financial demands for companies to become fiscal
representatives, there are only few fiscal representatives registered in Latvia, mainly companies owning
customs warehouses.
The terms for VAT reporting depend on the total value of taxable transactions. The taxable periods are: a
month, a quarter, six months.

Yes.
Yes, except regular VAT declaration there is a number of additional reports to be submitted. Some of
them refer to transactions with the companies from other EU member states and some declarations are
designed in order to keep control over the input VAT.
Yes. There are also late payment charges applied to late payments of taxes, including VAT, as well as
fines are calculated in tax avoidance cases.

Yes, it can be claimed with a condition that the company does not have a registered business in Latvia.

Special regime for electronically supplied/digital services to private consumers was adapted in the VAT
Law in Latvia from January 1st, 2015. The rules determining the place of supply of electronically supplied
services supplied to private consumers (B2C) changed from the Member State where the supplier
belongs (ie where established) to the Member State of the consumer. The result of this is that local VAT is
chargeable at the applicable rate in each of the Member States in which electronically supplied services
are made (ie where the customer belongs). To ensure compliance with this, suppliers have the choice to
either register for VAT in each Member State where their customers reside, or elect to register under the
EU VAT MOSS simplification scheme in a single Member State (where they are established). Businesses
with multiple establishments in the EU can choose which Member State to operate MOSS (the Member
State of Identification). However, the MOSS cannot be used to report local sales to customers in a
Member State in which suppliers of electronically supplied services have a fixed establishment. Non-EU
suppliers without an establishment in a Member State are free to select a Member State of their choosing
to operate MOSS and become their Member State of Identification.
For further information on indirect tax in Latvia please contact:

Jnis Miltuzis
T +371 672 175 69
E tax&legal@lv.gt.com
Liechtenstein
Standard rate of 8% applicable to all supplies of goods and services not explicitly subject to the
reduced rate or the special rate.
Reduced rate of 2.5% applicable, inter alia, to foodstuff and non-alcoholic beverages, water in
conduits, news-papers, books, medicine, etc.
Special rate of 3.8% applicable to hotel and similar accommodation.

these rates?
The rates are generally valid until 31 December 2017.
Value Added Tax (VAT) is the principal indirect tax in the Principality of Liechtenstein. It is a tax on
consumer expenditure which is collected on business transactions and imports.
Yes. It is related to the annual turnover of taxable transactions in the Principality of Liechtenstein, and once
the limit has (or will be) reached it is necessary to register.

Yes. There is generally the same registration limit for businesses that are not established in the Principality
of Liechtenstein.

Yes, a non-established person is required to appoint a fiscal representative in order to be able to register
for VAT purposes in the Principality of Liechtenstein.
VAT returns are generally to be submitted on a quarterly basis. If certain conditions are met, returns can
also be submitted on a monthly basis or semi-annual.

Generally, no penalties are imposed if a VAT return is submitted late. However, interest for late payment
(currently 4% p.a.) will be levied on late payment on the VAT amount due.
The submission of an additional annual reconciliation VAT return is required in case deviations, between
the VAT returns submitted and the annual financial statements, are detected.
Penalties may generally be imposed in the case of negligent tax evasion, unjustified exoneration or refund.
Liechtenstein

Deduction of VAT
Yes. VAT-registered persons are allowed to deduct VAT invoiced by third parties.

VAT is a turnover tax levied at each stage of the production and
distribution. Liability for VAT rests with the person supplying
the taxable goods or services or importing goods into the
Principality of Liechtenstein. However, the supplier is allowed
to deduct from his VAT liability on sales made the amount of
VAT paid and properly invoiced to him in relation to purchases
effected by him, or VAT paid by him at importation. The actual
burden of the tax is therefore borne by the final consumer.
VAT (MWST / Mehrwertsteuer) is levied on taxable
supplies which take place in the Principality of Liechtenstein,
self-supplies, acquisition of certain services from foreign
entrepreneurs and importation of goods. For VAT purposes,
the Principality of Liechtenstein is considered as part of the
Swiss territory. VAT is collected by the Liechtenstein tax
administration.
A transaction is within the scope of VAT if the following
conditions are met:
the place of supply is considered to take place in the
Principality of Liechtenstein
it is made by, or under certain circumstances, received
by a taxable person. For these purposes, a taxable person
is a person or entity who is registered for VAT in the
Principality of Liechtenstein, or has a liability to become
registered.
services in the Principality of Liechtenstein; the standard rate,
the reduced rate and the special rate. In addition, some goods
and services are exempted from VAT.
Exemptions without the right to deduct input tax include,
inter alia, hospital and medical treatments, services supplied
by social services, welfare institutions and social security
institutions, child and youth education, schooling, job
education etc., cultural services and sports events, insurance
transactions, certain banking transactions, transfer and letting of
real estate (with exceptions), operations connected with betting
and other games of chance involving money, etc.
The supplier of exempt services or deliveries may opt for
taxation. Please note that an option is not possible for financial
and insurance services. In certain cases, option is only possible
if the customer is a taxable person.
VAT borne by a taxable person on the purchase and

importation of goods and services which are connected
to taxable operations (also if zero rated) or to operations
located abroad which would be taxable if located within the
Principality of Liechtenstein can be deducted/refunded. A
proper VAT invoice and, in case of importation, original
import documents are required. VAT on the acquisition
of goods and services directly affected to exempt activities,
on operations which are not commercially justified (for
instance entertainment expenses) or on private activities is not
deductible.
As a general rule, VAT is payable to the customs at the time
of importation. However, taxpayers who have given security
for the tax amount may pay import VAT within 60 days based
on the invoice issued by the Federal Customs Administration.

Any person running a business is basically liable to VAT
irrespective of the realisation of a turnover. Thus tax liability
is not depending on the realisation of a taxable turnover. VAT
law allows for an exemption from tax liability if the taxable
turnover is below CHF 100,000. Each enterprise will be able
to explicitly abstain from the afore mentioned exemption and
therefore become tax liable. The limit is CHF 150,000 for sport
or culture clubs (if they do not strive to make profit and are
managed in an honorary capacity) and for institutions of public
interest.
Companies, partnerships and individuals having their
domicile or permanent establishment in the Principality
of Liechtenstein (not in Switzerland) and who are closely
related to each other, may request to be treated as a fiscal
unity for VAT purposes, with one single VAT number. As a
consequence, intra-group supplies are not taxable.
Any person whose domicile, registered office or permanent
establishment is located in the Principality of Liechtenstein, has
to pay VAT on certain services (or under certain circumstances
also delivery of goods) provided by foreign entrepreneurs
who are not registered for VAT purposes in the Principality of
Liechtenstein, if the value of such services exceeds CHF 10,000
during the calendar year. Please note that for already registered
persons, no threshold is applicable, i.e. these persons will have
to pay VAT on any import of services/goods acquired from a
not registered foreign person.
Liechtenstein

Non-resident entities supplying goods or services within the

Principality of Liechtenstein are generally subject to the same
registration rules. However, foreign entities supplying on Swiss
and Liechtenstein territory only services which are subject
to service import tax (i.e. services taxable at the place of the
domestic recipient, excluding telecommunication services or
electrical services provided to non-taxable recipients) are not
obliged to register for VAT purposes and the reverse charge
treatment will be applicable.
In case of registration, the foreign firm must designate a
fiscal representative in the Principality of Liechtenstein and
provide guarantees (usually a bank guarantee) to the Tax
Authority in respect of likely tax debts.
In case of intentional or negligent tax evasion, unjustified

exoneration or refund, the taxpayer is punished by a fine up
to five times the amount of the unlawful advantage. Persons
jeopardizing the levy of the tax (for instance by not fulfilling
the duty to register) are punished by a fine up to CHF 800,000
(doubled in severe circumstances) or can be prosecuted
according to the Liechtenstein Penal Code.

your country?
Yes, non-resident entities supplying electronical/digital services
to private consumers resident in Liechtenstein are obliged
to be VAT-registered in the Principality of Liechtenstein if
the taxable turnover of such imported services exceeds CHF
100,000.

Yes, a non-established person is required to appoint a fiscal
representative in order to be able to register for VAT purposes
in Liechtenstein.

The VAT returns generally have to be filed on a quarterly basis.
The VAT return must be filed and the corresponding payment
made within 60 days after the accounting period. However, for
small businesses, the tax period is semi-annual. In certain cases,
the tax period is monthly. Late payments are subject to interest,
at the rate of currently 4% per annum.

At the end of the business year, a turnover and input VAT
reconciliation must be made. In case deviations between the
VAT returns filed and the annual financial statements are
detected, the entity is obliged to submit an additional annual
reconciliation VAT return until 31 August of the following
year.

Penalties may generally be imposed in the case of negligent tax
evasion, unjustified exoneration or refund.

Liechtenstein?
Foreign taxable persons who are not established in the
Principality of Liechtenstein and who do not supply taxable
goods or services on the Swiss or Liechtenstein territory may,
under certain conditions, claim refund of VAT incurred on
their business costs. The claim can be made once a year and
must be filed by a Liechtenstein fiscal representative within a
period of six months following the end of the calendar year in
which the goods and services were bought. There is no refund if
the annual amount does not reach CHF 500.
Liechtenstein

The seller of the service/goods must produce an invoice to the
recipient on request. This invoice must clearly identify provider
and recipient as well as the kind of the service provided or
good(s) supplied.
Invoices or other accounting documents for taxable
recipients as well as for recipients with residence abroad (which
are entitled to VAT recovery) should generally include the
following:
the time or period of supply if this is different from the
invoice date
the invoice amount (must not be in CHF)
the applicable VAT rate.
Invoices from automatic cash registers (receipt) do not have to
contain information about the beneficiaries if the remuneration
is not exceeding a certain amount (defined by the government).
Electronic invoices must comply with the requirements
regarding proof of origin and integrity. Therefore, e-invoices
must include a digital signature by a certified provider.
For further information on indirect tax in the Principality of Liechtenstein please
contact:
Priska Rsli
T +423 237 42 42
E priska.roesli@li.gt.com
Dr. Marcel Kieber
T +423 237 42 42
E marcel.kieber@li.gt.com
Lithuania

Reduced rate of 9% is applicable to books, newspapers and other informational publications; to the
heating energy and hot water for residential premises; transport of passengers to regular routes.
5% rate applied to pharmaceuticals and medicine support devices which acquisition expenses are
entirely or partly reimbursed by the Mandatory Health Insurance Fund.
0% rate is commonly applicable to goods exported from the territory of European community; goods
transported from Lithuania and supplied to VAT payer registered in one of the European Union (EU)
member states; new cars supplied into other EU member state; certain transactions related with
international trade (eg supplied goods delivered to free zone or warehouse and appropriate customs
procedures executed); etc.

these rates?
Starting 1 January 2015 reduced VAT rate of 9% will applicable to the accommodation services defined in
the legislation.
Value Added Tax (VAT) is the principal indirect tax in the Lithuania. It is a tax on consumer expenditure, and
Yes, 44,891 (LTL155,00); (applicable for domestic company). It relates to the annual turnover of taxable
transactions in Lithuania, and once the limit has (or will be) reached it is necessary to register.

No. There is no registration limit for businesses that are not established in the Lithuania and they will need
apply to businesses involved with distance sales made within the EU.

Yes, applicable for entities registered outside EU. The requirement to appoint a fiscal agent to act in
Lithuania is not applicable to entities registered in EU member states (such persons may be registered as
VAT payers directly).
The taxable period is one month. Under certain circumstances, the taxable period may be six calendar
months or a period of other duration.

Yes. If a VAT return, or the corresponding payment is submitted later than the term set, a penalty may
be imposed.
are registered for VAT elsewhere in the EU.
Lithuania


the Lithuania.
ie the sale.
The supply of goods and/or services is subject to Lithuanian
VAT providing the following conditions are satisfied:
the supply of goods and/or services is effected
for consideration
the supply of goods and/or services, according to the
provisions of the Republic of Lithuania VAT law, is
considered to be effected within the territory of Lithuania
the goods and/or services are supplied by a taxable person
for economic activities.
services in the Lithuania: the standard rate (21%), the reduced
rates (9% and 5%), and the zero rate. In addition, some goods
and services are exempted from VAT.
Businesses that make exempt supplies are unable to claim all
of the input VAT that they incur, so the VAT paid to suppliers
Most goods imported into Lithuania from outside the
EU are subject to VAT. If the established conditions are met,
import VAT is not required to be paid to customs by the
for VAT chargeable activities and the importer is registered for
VAT purposes, import VAT is declared as deductible in a VAT
return and due to the import, a payable amount shall not occur.

customs duty.

Yes, 44,891 (LTL155,00); a domestic person who either
makes or intends to make taxable supplies of goods or services
in the course or furtherance of a business must register for
VAT if the value of its taxable supplies in Lithuania exceeds the
annual registration limit, or is expected to exceed the limit in the
near future. A business can register on a voluntary basis even if
the registration limit has not been exceeded.
For these purposes, a domestic person includes any
legal entity and natural person performing economic activity.
Even if the above threshold has not been reached, a person
has to register as a VAT payer in Lithuania if they acquire
goods in Lithuania from another EU member state (except the
new vehicles or the goods which are subject to excise duties)
and the value of such goods was above the limit of 10,137
(LTL 35,000) last calendar year or it is foreseen that the value of
such goods will be above the limit of 10,137 this calendar year.
Lithuanian legislation does not provide for a possibility
that two or more corporate bodies be registered together as a
VAT group.
Lithuania

No, the limit is not applied. The VAT registration limit does
not apply to businesses who are not established in Lithuania,
but for the purposes of the tax are making taxable supplies
there. Those businesses will need to register as a VAT payer
in Lithuania when they begin to supply goods or services and
the place of such a supply is Lithuania (with some exceptions),
irrespective of the level of turnover.
Foreign person (legal or natural) have to register as a VAT
payer in Lithuania:
when beginning to supply goods or services and the place of
such a supply is Lithuania (with some exceptions)
if it acquires goods in Lithuania from another EU member
state (except the new vehicles or the goods which are subject
to excise duties) and the value of such goods was above the
limit of 10,137 last calendar year or it is foreseen that the
value of such goods will be above the limit of 10,137 this
calendar year
if Lithuania was chosen as the place for distance selling
or the value of the goods supplied in Lithuania under the
distance selling scheme is above the limit of 36,203 (LTL
125,000), or the goods supplied under the distance selling
scheme are subject to excise duties.
Persons from territories outside the area of EU are registered

through their branch in Lithuania, and where they do not have
a branch through the fiscal agent appointed to act
in Lithuania.
The requirement to appoint a fiscal agent to act in Lithuania
is not applicable to persons from EU member states. Such
persons may be registered for VAT purposes directly.
It is worth noting that distance selling is where a VAT payer of

one EU member state supplies goods (other than new vehicles
and goods supplied after they are assembled and installed
in Lithuania) to persons of another EU member state (tax
exempted or taxable persons not entitled to VAT refunds), who
are not VAT payers in their own state, and the goods are, by
order of the supplier or another person, transported from one
EU member state to that another EU member state. Distance
sales from another EU country to non-taxable persons in the
Lithuania will be subject to VAT at the appropriate rate in the
suppliers country. However, once the value of those distance
sales to the Lithuania exceeds the threshold of 36,203
(LTL 125,000):
the supplier becomes liable to register as VAT payer in
the Lithuania
the Lithuania becomes the place of supply
any further sales to customers in the Lithuania are subject to
Lithuania VAT.

A VAT return for a tax period must be submitted no later than
25 days after the end of a tax period.
There is a difference between the tax periods applied to
natural persons who are VAT payers and legal persons who are
VAT payers: a tax period for a legal person is a calendar month
and a tax period for a natural person is a calendar half-year (in
certain cases, at the request of a VAT payer, a tax period other
than a calendar month or a calendar half-year may
be established).
In certain cases there may be a requirement to file annual
VAT return. This return is normally used for the correction of
pro-rata. It must be submitted and the VAT due must be paid
no later than 1 October of the following year.
VAT calculated in a tax period return (calendar month,
calendar half-year or other tax period) as well as in an annual
return must be paid to the budget no later than 25 days after the
end of a tax period.

Late payment of VAT is subject to default interests of 0.04%
for each day of delay. A fine may also be imposed that is from
10% to 50% of the outstanding tax amount.
Failure to present tax returns is subject to administrative
liability attracting a warning or administrative fine from 58
to 1,158.
Suppliers can choose to make the Lithuania the place where the
Lithuania

Businesses that are registered for VAT in Lithuania and make
supplies of goods or services to VAT payers of other EU
country are required to file the statements of inter-community
supply of goods/services. The reporting period of the statement
is a calendar month. Completed statements of inter-community
supply of goods/services have to be submitted not later than
within 25 days after the end of the reporting period.

Fines and default interest can be applied for errors and
Administrative fines can also be applied where the business
(including additional declarations), or makes repeated mistakes.
serious matters.

claimed if they are not registered in Lithuania?
and another for businesses established elsewhere. The foreign
taxable person, established in another EU member state, has to
submit an electronic refund application via the system provided
to him by the EU member state of establishment. The foreign
taxable person established outside the EU has to submit a paper
refund application directly to the State Tax Inspectorate of
Lithuania. It is worth noting that VAT is refunded to those
taxable persons of foreign states that refund VAT to Lithuanian
VAT payers. This restriction shall not apply to non-EU
electronic service providers that are registered for VAT
purposes in other EU member states.
A foreign taxable entity shall have the right to submit an

application to be refunded VAT paid in Lithuania only in
the case where during that period in which the VAT paid is
requested to be refunded it satisfies the following criteria:
had no divisions/subdivisions in the Republic of Lithuania
had not performed any activity which is subject to VAT
in Lithuania, except the cases when it supplied only such
services and goods the VAT on which must be calculated
and paid by the purchaser.
VAT may be refunded to the foreign entity if the goods and
services acquired are designated for economic activity of that
foreign entity, which is granting right to deduct VAT in the
country of its establishment. VAT paid by the foreign taxable
entity in respect of the goods and/or services, the input and/or
import VAT whereof shall, under the provisions of the law, in
no case be deductible by VAT payers, shall not be refundable to
foreign taxable entities. VAT is also not refundable if supply of
goods and services were not subject to VAT.
According to the Lithuanian VAT legislation, the minimum
refundable amount is:
400 (LTL 1,380) if the request is presented for the term less
than calendar year but not less than three calendar months
of that calendar year
50 (LTL 170) if the request is presented for the entire
calendar year or part of the term remaining until the end of
the calendar year which is less than three calendar months.
A foreign taxable entity may present application to refund VAT
for the period, which is not longer than calendar year and not
less than three calendar months of that calendar year; or less
than three calendar months provided these months are the last
months of the calendar year.
The taxable person, established in another EU member
state, must submit the application to refund VAT no later than
30 September of the following year for the preceding calendar
year. The taxable person, established outside the EU, must
submit the application to refund VAT no later than 30 June of
the following year for the preceding calendar year.
The decision to refund VAT (or refuse to refund) may take
the tax authorities up to 4 months, if additional information is
not requested.
Lithuania

Mandatory details of VAT invoice:
the date of issue
a sequential number, based on one or more series which
the suppliers VAT identification number
the customers VAT identification number
the full name and address of the supplier
the full name and address of the customer
the nature of the goods supplied or the nature of the services
rendered and the quantity of the goods supplied and extent
of the services rendered
the date on which the supply of goods or services was made
(if it differs from date of the invoice)
the unit price exclusive of VAT and any discounts or rebates
if they are not included in the taxable amount
the taxable amount per rate or exemption
the VAT amount in national currency (Litas)
in case of an exemption and when 0% rate applicable,
reference to the applicable provision of this directive, or to
the corresponding national provision, or any other reference
indicating that the supply of goods or services is exempt or
0% rate applicable
for certain sales other details are required, like: Reverse
charge, Margin scheme, VAT code of fiscal agent, etc.
In some cases, when the value of goods or services do not
exceed 100 (LTL 345) including VAT, a simplified VAT
Following the established requirements, VAT invoices can
be issued, received and stored in an electronic format. Invoices
in a paper format must be stored in Lithuania.
Invoices must be kept for ten years.
For further information on indirect tax in Lithuania please contact:
Arnas idlauskas
T +370 5 2127856
E arunas.sidlauskas@lt.gt.com
Lithuania
Luxembourg

Intermediary rate of 14% for advertising, custody fees, wine, etc.
Reduced rate of 8% on liquefied or gaseous gases, destined for heating, lighting and to supply
engines, electricity, living plants and other floriculture products. Certain services also benefit
(temporarily) from this rate: hairdressing; bicycles, shoe and leather article repairs; clothes and
household linen alterations; window cleaning and household cleaning with respect to private
residences.
Super reduced rate of 3% on food and medical products, books, shoes and clothes for children,
water, transporting passengers etc.

to these rates?
No.
Value Added Tax (VAT) is the principal indirect tax in Luxembourg.
Businesses that made less than 10,000 in the previous year (delivery of goods or services) are exempt
from VAT.

Yes.

No. The fiscal representative no longer exists in Luxembourg.
The VAT periodicity depends on the turnover. Annual VAT return is always mandatory and depending on
the taxpayers turnover periodic VAT returns are required also.

Yes. If a VAT return is submitted late a penalty can be imposed (between 50 and 5,000 per late return).
Yes. Additional declarations have to be submitted in respect of certain supplies (goods and services)
made to customers who are registered for VAT elsewhere in the EU (EC Sales Listing). Declarations also
have to be submitted in certain circumstances in connection with goods moving to or from another VAT
EU member state (Intrastat report).
Luxembourg


Luxembourg.
Created in 1970, VAT (value added tax) is a high yield tax
that applies to transactions (goods or services) connected with
an economic activity. It represents almost half of the states
tax revenue.
At each stage of the production and distribution process,
the tax only applies to the added value given to the product.
Companies thus add VAT to the sale price of their products
and deduct the tax relating to the goods or services that
contributed to the manufacture of their products or the
provision of their services from that collected tax. Only the
difference between the collected tax and the deductible tax is
paid to the Treasury.
VAT is a general consumption tax. It is levied on all
economic activities. Transactions may be subject to VAT by
law or because they are carried out against payment.
To be subject to VAT, the transaction must involve
either the delivery of movable assets (goods) or the provision
of services.
The transaction must be connected with an economic
activity in the commercial, craft, industrial, agricultural
or liberal professions sectors. Some professions, such as
professions related to the agricultural sector, benefit from a
special regime. Activities not connected with the economic
sector do not fall within the scope of VAT. Therefore, the
activities of administrative public services that do not compete
with those of the competitive sector are not subject to VAT.
Transactions carried out as part of private asset management
for individuals are also exempt from VAT. The activities carried
out by associations benefit from an exemption regime.
The delivery of goods or the provision of a service is subject
to VAT if it involves a consideration which corresponds to the
payment of the price asked (cash) or the delivery of a good or a
service. It does not matter whether the transaction generates a
profit or a loss.
The transaction must be carried out by a taxable person.
A taxable person is a person who independently carries out
transactions falling within the scope of VAT (taxable or
exempt) regardless of legal status, nationality or the aim
of the transaction.
Businesses that made less than 10,000 in the previous year

(delivery of goods or services) are exempt from VAT. They do
not need to submit a VAT return but they are still of course
obliged to provide the tax authorities, at their request, with
information allowing them to ensure that the threshold of
10,000 has not been exceeded. Of course, businesses benefiting
from the exemption cannot charge VAT to an account nor can
they show VAT on their invoices. They therefore cannot offset
deductible VAT either.

Yes, see above.

your country?
the EU VAT Mini One Stop Shop (MOSS) simplification
identification). However, the MOSS cannot be used to report
Luxembourg

No longer applicable in Luxembourg.

Concerning the VAT periodicity, the VAT authorities fix
it on the basis of the (expected) total annual turnover of the
company, as follows:

Expected annual turnover higher than 620,000: Submission
of monthly VAT returns and annual VAT return.

Expected annual turnover between 112,000 and 620,000:
Submission of quarterly VAT returns and annual VAT
return.

Expected annual turnover less than 112,000: Submission of
single annual VAT return (only).
The decision of the VAT authorities in that respect is notified in
the VAT registration notification or when a different tranche of
turnover has been reached.
The periodical VAT is required to be filed (mandatory) in
an electronic way (e-VAT system).
The deadlines for submission of the VAT returns are
the following:
For monthly VAT return: the deadline is the 15th day of the
month following the month for which tax is due.
For quarterly VAT return: the deadline is the 15th day of
the quarter following the quarter for which tax is due.
In case of periodical VAT returns (monthly or quarterly)
the deadline for annual VAT return is before 1 May of
the following year with a tolerance until 31 December
(confirmed each year by VAT authorities).
In case of single annual VAT return: the deadline is before
1 March of the following year with a tolerance until 31
October (confirmed each year by VAT authorities).

Yes. If a VAT return is submitted late a penalty can be imposed
(between 50 and 5,000 per late return).
Failure to pay within the statutory period may also be
punishable by a penalty tax of up to 10% one year from the
tax due.

Businesses that are registered for VAT in Luxembourg and
make supplies of goods or services to traders registered in
other EU countries are required to complete EC sales
Listings (ECLs).
In principle the submission of the ECLs is on a monthly
basis. By way of derogation, a quarterly submission can be
authorised if the total amount of intercommunity deliveries of
goods and/or triangular operations does not exceed 100,000.00
during the quarter concerned nor in respect of the four
previous quarters.
If the taxable person does not exceed the threshold
indicated above, he can choose to submit the listings either on a
monthly or on a quarterly basis. There is no formal procedure
for choosing, and no need to inform the VAT authorities.
The submission of the ECLs for services can be monthly
or quarterly. It is up to the taxpayer to decide. There is no
threshold, no formal procedure for choosing, and no need to
inform the VAT authorities.
The periodicity for ECLs for services is in no way linked to
the periodicity for filing ECLs for goods (and vice versa).
In case of monthly submissions, the ECLs must be
submitted via internet, using the eTVA system of the
Luxembourg VAT authorities.
In case of quarterly submissions, the ECLs can be
submitted either in paper format or via the internet, depending
on the choice of the taxable person.
The deadline for filing the listings is the 15th day of the
month following the reporting period if the listing is submitted
in paper format and the 25th following day if it is filed
via internet.
To correct an ECL, the taxable person should simply report
the corrections in the following ECL, via the corresponding
boxes of the corresponding form.
In addition, if the value of the intra-EU trade of goods
dispatched or arriving from another EU member state is above
an annual threshold (200,000 for acquisition of goods and
150,000 for delivery of goods), a supplementary declaration
(referred to as an Intrastat declaration) has to be submitted
for either or both. These returns have to be submitted on a
monthly basis.
The thresholds are the following type of return:
Thresholds

Annual values of the

intercommunity
operations (in )
Arrival
< 200 000
Dispatch
< 150 000
Type of return Exemption
200.000 375.000 4.000.000

150.000 375.000 8.000.000
Simplified Detailed
Extended
Luxembourg
The deadlines are either (always on a monthly basis):

within six working days after the end of the month of
reference (in case of paper submission)
within 16 working days after the end of the month of
reference (in case of electronically submission)

Yes. A range of penalties can be imposed when businesses do
Anyone who tries, in some way, to evade payment of tax
or to obtain in a fraudulent or improper manner a tax refund, is
subject to a tax penalty of 100 to 5,000.
The tax penalties are imposed by the director of
administration or his delegates, payable within one month after
notification of the written decision.
Criminal proceedings may be brought to court in case of
more serious matters.

Luxembourg?
from which the claim is to be sought.
In addition, the claimant:

rules that apply in the country making the refund. The claim is
submitted electronically with an authenticated e-signature to
the tax authority from whom the repayment is being sought.
was incurred.
into Luxembourg or purchases of goods and services used in
Luxembourg. The scheme is available to any person carrying
on a business established in a third country ie outside the EU,
he was not registered or liable to be registered for VAT
in Luxembourg
he made no supplies of goods and services in Luxembourg
where he is established in a third country having
a comparable system of turnover taxes, unless the
Luxembourg tax authority allows otherwise, that country
provides reciprocal arrangements for refunds to be made to
taxable persons established in the Luxembourg.
The reclaim period in Luxembourg is from 1 July to
30 June each year. Claim forms have to be submitted to the
Luxembourg tax authorities no later than six months as from
the end of the relevant year ie by 31 December each year.
Luxembourg

The following information has to be mentioned on the invoices
for VAT purposes:
the date of issue
a sequential number, based on one or more series, which
the VAT identification number under which the taxable
person supplied the goods or services
the customers VAT identification number under which the
customer received a supply of goods or services in respect
of which he is liable for the payment of VAT or received a
supply of goods as referred to in Article 43(1)(d),(e) and (f)
the full name and address of the taxable person and of
the customer
the quantity and nature of goods supplied or the extent and
nature of services rendered
the date on which the supply of goods or services was made
or completed or the date on which the payment on account
was made, in so far as that date can be determined and
differs from the date of issue of the invoice
the taxable amount per rate or exemption, the unit price
exclusive of VAT and any discounts or rebates if they are
not included in the unit price
the VAT amount payable, except where a special
arrangement is applied for which such a detail is to
be excluded
where an exemption is involved or where the customer is
liable to pay the VAT, reference to the applicable provisions
of Directive 2006/112/EC or to the corresponding
provision of VAT act, or to any other reference indicating
that the supply is exempt or subject to the reverse
charge procedure.
For further information on indirect tax in Luxembourg please contact:
Jean-Michel Hamelle
T +352 24 69 94
E jeanmichel.hamelle@lu.gt.com
Mlina Rondeux
T +352 24 69 94
E melina.rondeux@lu.gt.com
Laurence Boegen
T +352 24 69 94
E laurence.boegen@lu.gt.com
Luxembourg
Republic of Macedonia

Preferential rate of 5% for supply and import of certain goods and services.

to these rates?
No.
Value Added Tax (VAT) is the principal indirect tax in the Republic of Macedonia. The value added tax, as a
general consumption tax, shall be calculated and paid in all stages of the production and trade, as well as
in the whole service sector, unless otherwise prescribed by Law
Yes. All taxpayers, whose total turnover has exceeded the amount of 1,000,000 Denars in the past
calendar year or whose total turnover is anticipated to exceed the amount at the beginning of the
performance of the business activity or to exceed the amount during the year, shall be obliged to register
for value added tax.

No. There is no registration limit for businesses that are not established on the territory of Republic of
Macedonia.

Not applicable.
It depends on the amount of the annual turnover and the returns may be submitted quarterly or monthly.

No.

Yes, in the case of existence of reciprocity and meeting certain conditions.

The principal indirect tax in Republic of Macedonia is Value
Added Tax (VAT).
The VAT, as a general consumption tax, shall be calculated
and paid in all stages of the production and trade, as well as in
the whole service sector, unless otherwise prescribed by the
Macedonian law on VAT.
The following shall be taxable under VAT:
the sale and purchase of goods and provision of services
(hereinafter: supply), that is conducted in the country by
the taxpayer for consideration within the framework of its
economic activity
the import of goods.
Supply of goods, shall be the transfer of the right to dispose of
movable or immovable tangible assets. Supply of services, in
terms of this law, shall be any activity not being a supply
of goods.
If the supply of goods as basic supply is supplemented
with a supply of another good or service as ancillary supply,
the complete supply shall be deemed supply of goods. If the
supply of services as basic supply is supplemented with supply
of another service or good as ancillary supply, the complete
supply shall be deemed supply of services.
The taxpayer shall be a person that, permanently or
occasionally, independently, performs an economic activity,
regardless of the purposes and the results of such an activity.
Economic activity shall be deemed any activity of the
producers, the traders and the persons providing services
aiming at generating income, including the activities in the
field of mining, agriculture and forestry, as well as giving
tangible and nontangible goods for the purpose of being used.
Independent activity shall not be deemed the activity of:
the natural persons that, separately or jointly, are employed
in an enterprise and on such basis receive salary and are
obliged to refer to the instructions of the employer
the subsidiaries, the branch offices or the other separate
organisational units of an enterprise.
The state bodies, the bodies of the local self-government units
and the other public-legal bodies shall not be taxpayers for the
part of their activities limited to the exercise of public powers,
even if they charge taxes, fees, contributions or other duties for
those activities. The state bodies, the bodies of the local selfgovernment units and the other public-legal bodies shall be
taxpayers in the cases where, within the framework of a certain
economic activity, they carry out supply which, in accordance
with this Law, is taxable in respect to the other taxpayers.
The tax base for the value added tax shall be the total
amount of the consideration received or to be received for the
supply, without the value added tax included. Money, goods,
services and other benefits according to the market price paid or
to be paid by the recipient of the good, or the user of the service
or another person, shall be deemed consideration.
The tax base shall include:
the taxes, including the excise, fees, contributions and
other duties prescribed by separate laws, except the value
added tax
the related costs for packaging, loading, unloading,
transportation and insurance, as well as the commissions
and other costs calculated by the taxpayer to the recipient of
the good or the user of the service
the subsidies directly connected with the price of supply of
the good or the service.
The tax base shall not include:
the deduction of the price in a form of discount for
advance payments
the price discount, the rebate and the other types of
deduction of the price approved for the recipient of the
good or the user of the service at the time of supply, if they
are separately shown in the invoice and recorded in the
book-keeping
the amount received by the taxpayer from the recipient of
the good or the user of the service as a payment of the costs
incurred on their behalf and their account, provided that
such amount is recorded in the book-keeping.
The value added tax shall be calculated by applying a
proportional tax rate to the tax base for the taxable supply of
goods and services and import, that is according to the general
tax rate of 18% and according to the preferential tax rate of 5%.
The general tax rate of 18% shall apply to the complete
supply and import, except for the supply and import taxed at
preferential tax rate.
Preferential tax rate of 5% shall apply to the supply and

import of: Products for human consumption; drinking water
of the public systems for supply and discharge of urban
waste waters and water for irrigation of agricultural land;
publications, that is: books, brochures and similar printed
materials, newspapers and other periodical publications,
childrens picture-books, drawing books and colouring books,
and cartographic products of any type, except publications
serving mostly for advertising purposes, as well as publications
with pornographic contents; Seeds and planting material for
production of agricultural plants; fertilizers; substances for
plants protection; plastic foils for use in agriculture; agricultural
mechanisation; medicaments; machines for automatic
processing of data and their units (computers); thermal solar
systems and components; medical equipment, apparatuses
and other devices the purpose of which is to alleviate or
treat a disability, exclusively for personal purposes of people
with disabilities; crude oil for production of food for human
consumption; and trade in residential buildings and apartments,
regarding the part used for housing purposes and effectuated
within a period of five years after construction.
The following services shall be charged with 5% preferential
rate: transportation of persons and their accompanying
luggage; software for machines for automatic processing of data
and their units (computers); services for maintaining public
cleanliness and disposal of waste; and accommodation services
(overnight accommodation) or bed and breakfast, half board or
full board accommodation.
The tax debt shall incur:
at the moment of completion of the supply of the good.
If the good is transported or dispatched, the moment
of commencement of the transport or dispatch shall be
considered. If the supply includes assembly or installation,
the moment of completion of the corresponding activities
shall be considered
at the moment of completion of the service in full.
Where the payment is made prior to the completion of the
supply, time of incurrence of the tax debt shall be considered
the moment when the payment is received, in the amount of the
tax for the received amount.
In the case of periodic or continuous supply, for which
consecutive payments are anticipated, time of incurrence of the
tax debt shall be considered the day when the invoice for the
corresponding period is issued or, if earlier, the day when the
payment for the corresponding period is received.
If the economically divisible supply is owed and
conducted in parts, time of incurrence of the tax debt shall be
considered the day when the corresponding part of the supply
is completed.
Where automatic machines that operate with coins,

banknotes or tokens are used for sale of goods or rendering
services, time of incurrence of the tax debt shall be considered
the day when the coins, banknotes or tokens are taken out of
the automatic machine.
Time of incurrence of the tax debt, upon import of goods,
shall be considered:
the day of occurrence of the obligation to pay the customs
duty and the other import duties, or the day of import of
the good in the country, in the cases of goods that are not
subject to payment of customs duties
the moment when the good, which is subject to the
regime of goods in free zones, customs zones and customs
warehouses or if the good is in transit or temporarily
imported, is released in free circulation.
Tax debtor shall be:
the taxpayer in the cases referred to the sale and purchase of
goods and provision of services (hereinafter: supply), that is
conducted in the country by the taxpayer for consideration
within the framework of its economic activity
the person importing goods in the cases of the import
of goods
the person issuing an invoice referred to states separately
the value added tax in the invoice although not authorized
to do so, it shall be liable for the stated amount and as well
if it states separately a higher tax than the amount it is liable
for in accordance with the Law, the person shall as well be
liable for the extra tax
the recipient of the good or the user of the service, provided
that it is a taxpayer or an institution in terms of state bodies,
the bodies of the local self-government units and the other
public-legal bodies, in the case of supply, completed by
a taxpayer which has no head office nor subsidiary in the
Republic of Macedonia.
In such cases, the obligation for calculation of the tax, for
submission of a tax return, for payment of the tax, and for
payment of the interest rate in the case of late tax payment, shall
be borne by the tax debtor registered in Republic of Macedonia.

All taxpayers, whose total turnover has exceeded the amount
of 1,000.000 Denars in the past calendar year or whose total
turnover is anticipated to exceed the amount at the beginning
of the performance of the business activity or to exceed the
amount during the year, shall be obliged to register for value
added tax. The obligation for registration for value added tax
shall not apply to taxpayers in terms of a taxpayer that does not
have head office nor subsidiary in the Republic of Macedonia
and the case of tax refund of a tax payer and in the case of
existence of reciprocity, the taxpayers that have no head office
or subsidiary in the country and do not perform any supply
therein, or that do not have sales tax due.
The total turnover shall be a sum of the supplies completed
by the taxpayer during the calendar year, which are subjected to
taxation, including as well the tax related thereto, except for the
turnover exempted from tax without the right to deduction of
the input tax. If the taxpayer has carried out its activity only in
one part of the calendar year, the actual total turnover shall be
calculated on a level of total turnover for the whole
calendar year.
Taxpayers residents in the country that are not obliged to
register, shall not be levied value added tax for supply of goods
and services conducted by them. They shall not be authorized
to separately declare the tax in the invoices or in other
documents and shall not have the right to deduction of input
taxes. Taxpayers may voluntarily register for value added tax on
the beginning of each calendar year.
The taxpayers shall be obliged to submit a request for
registration for value added tax to the competent tax authority.
The competent tax authority shall perform the entry in
the register of value added taxpayers as of the beginning of the
current calendar year and shall issue the taxpayers a certificate.
If the taxpayer has commenced the performance of its
activity during the calendar year, the registration shall be
performed with the commencement of the performance of the
activity. Commencement of the performance of the activity
shall be considered the first performance of an activity by the
taxpayer as first completed purchase of goods (capital assets,
sales goods and alike), service used (rent, market research and
alike) and completed supply of goods or service. If during
the year the taxpayer exceeds the amount of completed
total turnover of 1,000.000 Denars, the registration shall be
performed upon the expiry of the month when the supply has
been completed.
The taxpayers shall remain registered at least in a period

of five calendar years, regardless of the amount of the total
turnover. If the total turnover in the fifth calendar year does
not exceed the amount, the taxpayer may, upon the expiry of
the time period, submit a request for deregistration for value
added tax to the competent tax authority which shall issue to
the taxpayer a decision on deletion from the register of value
added taxpayers.
As an exception to the time period determined above, the
termination of the registration may be realised in a shorter time
period than five calendar years, upon adoption of a decision by
the competent tax authority.
The competent tax authority may terminate the
registration if:
in the previous calendar year, the taxpayer submits tax
returns without declaring the tax for the completed
turnover and without declaring the input tax for deduction
in the two previous calendar years, the taxpayer submits
tax returns without declaring the tax for the completed
turnover, with the exception of the cases when the same
periods in the tax returns declare only supplies exempted
from tax with the right to deduction or input tax resulting
from the supplies of investment goods performed towards
the taxpayer or imported by it
the taxpayer cannot be found on the reported address and
on the address for performance of business activities
the taxpayer does not submit a tax return for at least two tax
periods in respect to the monthly and quarterly taxpayers,
and for one tax period in respect to the annual taxpayers
tax evasion has been previously identified at the taxpayer
the cases referred to several persons being registered for
VAT as a single taxpayer.
The taxpayers shall submit the return by the 15th of January
in the current year at the latest. If the taxpayer has commenced
the performance of its activity during the calendar year, the
return shall be submitted in a period of 15 days as of the
commencement of the performance of the activity. If during the
year, the amount of realised total turnover exceeds 1,000.000
Denars, the taxpayer shall submit the return by the 15th in the
month following the month of realisation of the turnover at
the latest.
The taxpayers shall submit the request for termination of
the registration for value added tax by the 15th of January in
the year when they want to terminate the registration for value
added tax at the latest.
The competent tax authority may reject to register the

taxpayer that commences the performance of an activity and the
taxpayer that has voluntarily applied for registration if:
it cannot be found on the reported address and on the
address for performance of business activities
it cannot prove the real intention to perform an activity
tax evasion has been previously determined at the taxpayer.

which are not established in the Republic of Macedonia.
In the case of supply, completed by a taxpayer which has
no head office nor subsidiary in the Republic of Macedonia the
recipient of the good or the user of the service, provided that
it is a taxpayer or an institution in terms of state bodies, the
bodies of the local self-government units and the other publiclegal bodies shall be obliged to calculate the tax, submit the tax
return, payment of the tax, and payment of the interest rate in
the case of late tax payment.

The fiscal representative is a topic that is still not introduced in
the respective VAT legislation of Republic of Macedonia.

The period for which the value added tax is calculated and
paid shall be a tax period. A tax period shall be considered the
calendar month or, if the total turnover in the previous calendar
year has not exceeded the amount of 25 million Denars, the tax
period shall be a calendar quarter.
If the taxpayer performs its activity only in one part of the
calendar year, only the referred period shall be considered to be
the tax period.
As an exception, the tax period for taxpayers that generate

turnover and being voluntarily registered may be determined
to be a calendar month if the taxpayer submits a request
and proves by documents that in the course of the current
calendar year there are to be input realisations resulting from
investments in equipment and immovables for commencement
or expansion of its economic activity in the amount of
100.000.000 Denars at least, on annual basis, with no value
added tax included. The request shall be submitted to the
competent tax body, by the 10th in the month.

Fine in the amount of 1,500 in Denar counter-value for
perpetrated misdemeanour shall be imposed on a legal entity
taxpayer if it submits a tax return to the competent tax
authority after the expiry of the prescribed time period.
The responsible person in the legal entity and the natural
person taxpayer that has not submitted a tax return within the
prescribed time period, or has submitted a tax return, but has
not fill it in with correct data, or has submitted a tax return and
has not pay the tax due to the established accounts, in order to
acquire greater property benefit or value, shall be sentenced to
imprisonment of six months to five years and shall be fined.
If the amount of the liability is substantial, the perpetrator
shall be sentenced to imprisonment of at least four years and
shall be fined. If the offense is committed by a legal entity, it
shall be fined. The property benefit acquired by the committed
offense shall be seized based on a court decision.

The taxpayer shall be obliged, for each tax period, to submit
a tax return in a period of 25 days after the expiry of the tax
period where it shall calculate the taxes on its own.
For the corresponding tax period, the taxpayer shall be
obliged to enclose a periodical financial report of the approved
fiscal equipment systems for registration of cash payments to
the tax return and through the bearer of payment operations to
submit a periodical report for Denar transaction accounts and
foreign currency accounts through which it realizes
its operations.
The tax return shall be submitted in the deadline, even
if the taxpayer has not carried out a taxable supply in the
corresponding tax period.
As an exception, in the case of termination of performance
of an activity, the taxpayer shall be obliged to submit a tax
return in a period of 25 days after the expiry of the calendar
month in which it has terminated its activity.
Furthermore, as an exception, in the case of altering the
tax period, in cases of voluntary registration of the taxpayer
that proves by documents that in the course of the current
calendar year there are to be input realizations resulting from
investments in equipment and immovables for commencement
or expansion of its economic activity in the amount of
100,000,000 Denars at least, on annual basis, with no value
added tax included, the taxpayer shall be obliged to submit a
tax return in a period of 25 days after the expiry of the calendar
month in which the request has been submitted, for the period
starting from the beginning of the calendar year until the end of
the month when the request has been submitted.

A fine in the amount of 1,500 in Denar counter-value for a
perpetrated misdemeanour shall be imposed on a legal entity
taxpayer if:
it a tax return is submitted to the competent tax authority
after the expiry of the prescribed time period
keeps the records unduly
does not issue an invoice within the prescribed time period.
For the misdemeanour, the responsible person in the legal
entity shall be fined in the amount of 500 in Denar
counter-value.
For the misdemeanour, natural person taxpayer shall be

imposed a fine in the amount of 500 in Denar counter-value.
A fine in the amount of 2,000 to 2,500 in Denar countervalue for perpetrated misdemeanour shall be imposed on a legal
entity taxpayer if:
it does not submit a tax return to the competent
tax authority
the value added tax is not paid to the established account
it does not submit a request for registration for the value
added tax
it does not keep or keeps the records incorrectly
it issues an unduly invoice
the invoices and the other documents issued in accordance
with this law or the business books are not kept within the
prescribed time period.
For the misdemeanour, the responsible person in the legal
entity shall be imposed a fine in the amount of 500 to 1,000
in Denar counter-value.
For the misdemeanour, a natural person taxpayer shall
be imposed a fine in the amount of 500 to 1,000 in Denar
counter-value.
A fine in the amount of 1,200 in Denar counter-value
shall be imposed on a legal entity taxpayer, for a perpetrated
misdemeanour if it submits a request for registration for value
added tax after the expiry of the prescribed time period. For the
same misdemeanour, the responsible person in the legal entity
shall be imposed a fine in the amount of 500 in Denar
counter-value.
For this misdemeanour the natural person taxpayer
shall be imposed a fine in the amount of 500 in Denar
counter-value.

claimed if they are not registered in Macedonia?
Yes, it may be possible to reclaim the VAT in case of existence
of reciprocity. The taxpayers that have no head office or
subsidiary in the country and do not perform any supply
therein, or that do not have sales tax due, shall be paid off, upon
a request, the input tax that may be deduced in accordance with
the special procedure prescribed by the minister of finance.
The application for tax refund should be filed by the nonresident tax payers in front of the tax authority in Republic of
Macedonia, accompanied with the following documents:
original invoices
proof of invoices being paid
proof that the non-resident tax payer has been registered
as tax payer in the country of origin. This proof may be
submitted in English, German or French accompanied with
Macedonian translation.
The tax authority shall review the application for tax refund and
within six months from the date of submission to refund the
amount in case all prescribed conditions are met.

The invoice must contain the following data:
place, date of issuance, number
name (title) and address of the taxpayer carrying out the
supply and its tax number registered under for value
added tax
name (title) and address of the recipient of the goods or user
of the service
day of the completed supply
quantity and description of the supply
amount of the consideration for the completed supply, not
including the value added tax
tax rate applied
amount of the calculated value added tax
total amount of the consideration for the completed supply
and the value added tax
signature and seal of the issuer of the invoice.
The taxpayer shall be obliged to issue an invoice for the supply

to other taxpayers upon a request.
Invoice, shall be considered each document issued by the
taxpayer or upon its order by another person in regard to
the completed supply. Invoice shall also be considered the
calculation, whereby the taxpayer calculates certain taxable
supply completed towards it by another taxpayer.
Where consideration is received only for partially
completed supply, prior to completing the supply, the taxpayer
shall issue separate invoices for each partially completed supply.
The taxpayer shall issue an invoice for each payment
received in advance (advance payment), prior to the completion
of the supply.
In the course of exchange of goods or services, each
individual taxpayer shall issue an invoice.
The supply shall be separately showed in the invoices issued
for taxable supply, as well as for supply exempted from tax.
Where the supply exempted from tax is performed, the invoice
shall state without value added tax calculated.
The taxpayer shall issue the invoice in two copies. The first
copy of the invoice is submitted to the recipient of the goods,
and the second is kept in the personal records.
The invoice shall be issued on the day of the completed
supply, and in a period of five business days at the latest.
Where consideration is received prior to completion of the
supply, the invoice shall be issued on the same day when the
advance payment is received, and within the time period of five
business days at the latest.
For further information on indirect tax in Macedonia please contact:
Maja Filipceva
T +389 2 3214 700
Malta

Special rate of 7% for licensed holiday accommodation, gym membership, fitness centres and
football academies.
Reduced rate of 5% for some goods and services including the supply of electricity, confectionery
items, printed matter, medical accessories, and items for the exclusive use of the disabled.
Zero-rated goods and services include most food and pharmaceutical goods.

to these rates?
No.
Value Added Tax (VAT) is the principal indirect tax in Malta. It is a tax on consumer expenditure, and is
Yes. It relates to the annual turnover of taxable transactions in Malta, and once the limit has (or will be)
reached it is necessary to register in terms of article 10. A small business is still required to register in terms
of article 11 as a small business in terms of domestic provisions unless it opts to register under article 10.

A taxable person who makes solely exempt supplies is obliged to register in terms of article 12 if he
exceeds the intra-community acquisition of goods threshold or receives services from outside Malta where
VAT is due in Malta in terms of the reverse charge mechanism.

No. There is no registration limit for businesses that are not established in Malta and they will need to
register as soon as they start to make taxable transactions. However, the non-established business is not
required to register for VAT in Malta if the business makes only supplies in respect of which the tax liability
falls upon the recipient of the supply.

Different registration requirements also apply to businesses involved with distance sales made within
the European Union (EU) e.g. mail order and internet sales.

A non-established person who is not established in the Community and is registered, or obliged to be
registered for VAT in Malta has to appoint a fiscal representative.
Most businesses are required to submit VAT returns covering three month accounting periods (not
necessarily on a calendar quarter basis). Returns can also be submitted on a monthly basis if the taxpayer
is in a tax refundable position, subject to approval by the Commissioner.

Yes. If a VAT return, or the corresponding payment, is submitted late a penalty can be imposed. Interest is
also chargeable on late payment of VAT.
Malta
Yes. Penalties and interest can be imposed for a range of errors or omissions.

Deduction of VAT
Input VAT may not be claimed on tobacco and tobacco products, alcoholic beverages, works of art and
antiques, entertainment and motor vehicles, vessels, aircraft and fuelling thereof other than in the course
of business, such as goods acquired for resale.

Malta and in other European Union (EU) countries.
ie the sale.
(including any VAT paid on the importation of goods). The
in each accounting period will be the amount of VAT payable
by the business to the VAT department. Where the input tax
A transaction is within the scope of Maltese VAT if the
it is a supply of goods or services . Although the term
interpretation
the supply is made for consideration
it takes place in Malta
Malta, or is obliged to become registered
it is made in the course or furtherance of any economic
activity carried on by that person or entity.
services in Malta; the standard rate, the special rate of 7% on
licensed holiday accommodation, the reduced rate, and the zero
rate. In addition, some goods and services are exempted from
the VAT.
As from 1 January 2016, use of sporting facilities are subject

to a special rate of 7%.
Businesses that make taxable, zero-rated and exempt
supplies are unable to claim all the input tax that they incur and
have to apply the partial attribution method to determine the
amount of input VAT that they may recover.
Businesses that make solely exempt supplies are unable
to claim any input tax that they incur, so the VAT paid to
suppliers will be a real cost.
Most goods imported into Malta from outside the EU are
the place where goods are imported into the Community. It
customs duty.
Malta

supplies of goods or services in the course or furtherance of his
economic activity must register for VAT in terms of article 10
if the value of its taxable supplies in Malta exceeds the annual
registration limit, or is expected to exceed the limit in the near
future. A business can register on a voluntary basis even if the
For these purposes, a person includes an individual and
any legal entity. Therefore, once a person is registered for VAT,
all of his business activities will be covered by the registration
even if the nature of some of those activities are very different.
Small businesses are still obliged to register in terms of
article 11 to satisfy local requirements unless they opt to
register in terms of article 10.
Taxable persons making solely exempt supplies and nontaxable legal persons must register for VAT in terms of article
12 if they exceed the intra-community acquisitions thresholds
or receive services on which VAT is to be accounted for in
Malta in terms of the reverse charge mechanism. They may also
register on a voluntary basis.

who are not established in Malta, but for the purposes of the tax
are making taxable supplies there. Those businesses will need
to register for VAT as soon as they commence trading in Malta,
Registration for VAT in Malta may also be required where
via the internet.
selling threshold of either 35,000 euros or 100,000 euros per
calendar year, or the equivalent in its own currency. Malta has

Distance sales from another EU country to non-taxable persons

in Malta will be subject to VAT at the appropriate rate in the
suppliers country. However, once the value of those distance
sales to Malta exceeds the threshold of 35,000
the supplier becomes liable to register for VAT in Malta
Malta becomes the place of supply
any further sales to customers in Malta are subject to
Maltese VAT.
Suppliers can choose to make Malta the place where the goods

As from 1 January 2015, the place of supply for VAT of
electronically supplied/digital services to private customers
established or resident in Matla are considered to take place in
Malta and a supplier that is not established in this country is
obliged to account for and pay VAT in Malta.
Suppliers providing such services may opt to register
for VAT in Terms of article 10 and account for VAT in the
standard manner.
Alternatively they may register in terms of the Mini One
Stop Shop (MOSS) special scheme. There are two types of
scheme, one for suppliers established in the Community and
one for those established outside the Community.
Suppliers established in an EU Member State, register in
terms of this special scheme in their State of establishment and
account for VAT due in Malta by using the said scheme.
Suppliers established outside the Community register in
terms of the special scheme applicable to them in a Member
State of their choice and account for VAT due in Malta in terms
of this scheme.

a) A person who is not established in Malta and is not
established in the Community must appoint a fiscal
representative in Malta if the said person is registered or is
required to be registered in Malta for the purposes of VAT.
Malta

VAT returns (article 10) normally cover an accounting period
of three months, ending on the last day of a calendar month.
Businesses that are in a net repayment position (because of the
nature of their activities) and those incurring exceptionally high
expenditure (eg as a result of set up costs or a capital project)
can apply to submit returns on a monthly basis to improve cash
flow.
All VAT returns have to be submitted by the 15th day of
the second month following the month in which the VAT
reporting period ends together with any tax due.
Where a person opts to submit the return electronically,
taxpayers get a further seven days in which to submit the return
and pay the tax due.
Small businesses that register in terms of article 11 submit a
prescribed form generally on an annual basis summarising their
sales and costs for the relevant year.
Taxpayers registered in terms of article 12 submit the
prescribed form. With respect to services received from
suppliers established in other EU Member States or established
outside the EU, the form together with payment of VAT is
to be submitted by not later than the 15th day of the second
month following either the date of invoice or the month during
which the service was received, whichever is the earlier. Where
during the relevant period, the taxpayer made intra-community
acquisition of goods, the return and payment is to be submitted
by the 15th day of the month following that during which the
VAT became chargeable.

related tax is not paid by the due date. Interest is also chargeable
on late VAT payments.

Businesses that are registered for VAT in Malta, and make
Sales Lists (ESLs) also often referred to as the Recapitulative
Statement. The ESLs must show details of the recipients of the
goods and services and values per client, distinguishing between
sales of goods and sales of services.


in other EU member States exceeds 50,000 in the current
ESLs for services should be submitted for each calendar
quarter unless the taxpayer also supplies goods and has
exceeded the threshold In such cases, the ESL for services must
also be submitted monthly.
ECLs may only be submitted electronically and have to be
submitted within 15 days of the end of the relevant month or
quarter.
These declarations have to be submitted up to ten working days
after the reference month.

Criminal proceedings may be brought if the taxpayer fails
to comply after being officially notified by the Commissioner.

claimed if they are not registered in Malta?
circumstances.
Malta

incurred.
into Malta or purchases of goods and services used in Malta.
Malta
he made no supplies of goods and services in Malta other
comparable system of turnover taxes, unless the Maltese tax
established in Malta.

Claim forms have to be submitted to the Maltese tax authority
by not later than the 30th June from the end of the calendar
year in which the tax becomes chargeable.

A VAT invoice referred to as a tax invoice must show:
the invoice date
the customers name and address and VAT number, if
applicable
discounts or rebates if not included in the unit price
the total amount of VAT charged expressed in Euro.

services, it must:
or services
indicate the grounds on which no tax is chargeable such as
stating exempt with credit or exempt without credit.
Where the customer is responsible for the payment of VAT,
the tax invoice should include the wording Reverse Charge.
Where VAT is chargeable on a cash basis, cash accounting
must be mentioned on the invoice.
Where any special arrangement applies such as the second
hand scheme or travel agents margin scheme, the tax invoice
must refer to the applicable scheme.
A simplified invoice may be issued if the value of the sale
inclusive of VAT is equal to or less than 100.
In the case of sales made to persons not registered for VAT,
suppliers are obliged to issue a fiscal receipt. Fiscal receipt
booklets are issued by the Commissioner upon application.
Retailers do not issue tax invoices but must issue fiscal
receipts for each and every sale from approved fiscal cash
registers unless the Commissioner authorises them to avail of
other systems such as the point of sales.
supply of goods or services. The use of an electronic invoice is
subject to acceptance by the recipient.
For further information on indirect tax in Malta please contact:
Austin Demajo
T +356 21320134
E austin.demajo@mt..gt.com
Geraldine Schembri
E geraldine.schembri@mt.gt.com
Malta
The Netherlands

Reduced rate of 6% for goods and services including food (supplements); admission to sports and
cultural events, books and many other.
Zero-rated goods and services.

to these rates?
No.
Value Added Tax (VAT) is the principal indirect tax in the Netherlands. It is a tax on consumer expenditure,
Yes. It relates to the an annual amount VAT due, and once the limit has (or will be) reached it is necessary
to register. Only applicable to natural persons.

No. There is no registration limit for businesses that are not established in the Netherlands and they will
need to register as soon as they start to make taxable transactions. Different registration requirements
also apply to businesses involved with distance sales made within the European Union (EU) e.g. mail
order and internet sales.

Article 33a of the VAT Act offers non-resident taxable persons (taxable persons not established in the
Netherlands and not having a fixed establishment in the Netherlands) the opportunity to appoint a Dutch
fiscal representative in relation to their VAT obligations. According to article 24c(4) and (5) of the VAT
Implementing Decree, a general or a limited license may be granted to a fiscal representative.
Most businesses are required to submit quarterly VAT returns. Returns can also be submitted on a
monthly or yearly basis.

The Netherlands


the Netherlands and in other European Union (EU) countries.
country. Although VAT is ultimately borne by the consumer by
A transaction is within the scope of Dutch VAT if the
it is a supply of goods or services. Although the
term supply is not defined in the legislation, it has
a broad interpretation
it (is deemed to) takes place in the Netherlands
Netherlands, or has a liability to become registered
services in the Netherlands; the standard rate, the reduced
rate, and the zero rate. Special rates may apply to farmers. In
Businesses that make exempt supplies are in general
unable to claim all of the input tax that they incur, so the VAT
paid to suppliers will be a real cost.
Most goods imported into the Netherlands from outside
the EU are subject to VAT. The tax will have to be paid by the
for business purposes and the importer is registered for VAT,
it may be possible to reclaim the tax (subject to certain rules).
However, its possible to postpone payment of import VAT to
the periodic VAT return, hence no cash-flow occurs (referred
to article 23 license).

custom and excise duty.

your country?
The Netherlands

business must register for VAT .
a VAT group if
establishment, in the Netherlands
they satisfy the control test, ie one of them controls each of
the others, or one person or a business partnership controls
all of them
each of the bodies perform more or less the same
economic activities.
could be jointly and severally liable for the VAT debt of the
group during the period of their membership.

Registration for VAT in the Netherlands may also be required

year, or the equivalent in its own currency. The Netherlands
has adopted an annual threshold of 100,000.
persons in the Netherlands will be subject to VAT at the
appropriate rate in the suppliers country. However, once the
value of those distance sales to the Netherlands exceeds the
threshold of 100,000
the supplier becomes liable to register for VAT in
the Netherlands
the Netherlands becomes the place of supply
any further sales to customers in the Netherlands are subject
to Dutch VAT.
Suppliers can choose to make the Netherlands the place where
the goods are supplied by registering for VAT voluntarily
before the threshold is reached. Non-EU entities would need to
appoint a general VAT representative.

Article 33a of the VAT Act offers non-resident taxable
persons (taxable persons not established in the Netherlands
and not having a fixed establishment in the Netherlands) the
opportunity to appoint a Dutch fiscal representative in relation
to their VAT obligations. According to article 24c(4) and (5) of
the VAT Implementing Decree, a general or a limited license
may be granted to a fiscal representative.
General license
A fiscal representative with a general license acts on behalf of

a non-resident taxable person with respect to all his supplies
of goods and services for which Dutch VAT is due, intraCommunity acquisitions and importation of products, unless a
fiscal representative with a limited license is appointed for those
transactions. A non-resident entrepreneur may use the services
of a general fiscal representative only after registering for VAT
himself. A non-resident taxable person may use the services
of only one general fiscal representative. If a non-resident
company has appointed a Dutch fiscal representative with a
general license, the representatives VAT identification number,
name and address need not be indicated on the invoices raised
by the non-resident company.
The Netherlands
When companies established outside the EU make distance

sales to private persons or equivalent persons exceeding
the Dutch threshold of 100,000 in a calendar year, a fiscal
representative with a general license must be appointed. This
also applies to distance sellers established outside the EU who
voluntarily register in the Netherlands.
A license to act as a general taxable person may be granted,
upon written request, to an entrepreneur established in the
Netherlands if certain conditions are met and if the original
power of attorney signed by the principal is enclosed. A fixed
establishment of a non-resident taxable person may not act
as a fiscal representative with a general license. The general
representative is required to provide a bank guarantee. His
joint and several liability in respect of his clients transactions is
limited to the amount of this bank guarantee.
Limited license

serious matters.
A fiscal representative with a limited license can represent

a non-resident taxable person for a limited number of
transactions. According to article 24c(5a) of the VAT
Implementing Order, as a general rule, a fiscal representative
with a limited license may act as such with respect to:
the importation of products into the territory of the
Netherlands and the subsequent supply of the goods
the supply of goods subject to the zero rate according
to Table II(a)(7) and (8) of the VAT Act (excise and bulk
products)
export and intra-Community supplies subject to the zero
rate according to Table II(a)(2) or (a)(6) of the VAT Act.
A non-resident taxable person, using the professional
services of a fiscal representative with a limited license is
not required to register. He can use the VAT identification
number of the limited representative. When making intraCommunity transactions, the VAT identification number of the
representative must be indicated on the invoice.
A Dutch entrepreneur may be granted a license to act as a
limited fiscal representative. A fixed establishment of a nonresident taxable person may not act as such. It is permitted
that certificates on the taxable status of the applicant are not
attached to the request but kept in the administration of the
limited representative. The limited representative is jointly and
severally liable for the VAT due on the transactions for which
he operates as a limited VAT representative. He is also required
to provide a bank guarantee.
VAT returns normally cover a calendar quarter ending on the

last day of a calendar month, taxpayers can apply to submit
returns on a monthly basis.
All VAT returns have to be submitted within the end
of next month following the relevant accounting period,
together with any tax due. VAT returns has to be
submitted electronically.
Non-resident business may file within the end of the second
month following the relevant accounting period, together with
the VAT due. As from 2014, VAT returns have to submitted
electronically.


Netherlands?
The Netherlands

was incurred.
into the Netherlands or purchases of goods and services used in
the Netherlands. The scheme is available to any person carrying
on a business established in a third country, ie outside the EU,
the Netherlands
he made no supplies of goods and services in the
Netherlands other than certain specified exceptions.

services, it must:
or services
or services for 100 or less including VAT, a simplified VAT
For further information on indirect tax in the Netherlands please contact:
Bob van der Steen
T +31 88 6769290
E bob.vander.steen@nl.gt.com
By exception, businesses may claim a refund of VAT dating

back five years.

the invoice date
the total amount of VAT charged expressed in Euros.
The Netherlands
Poland

Reduced rate of 5% and 8% for some goods and services.

these rates?
No.
Value Added Tax (VAT) is the principal indirect tax in Poland. It is a tax on consumer expenditure, and is
Is there a registration limit for the tax ?
Yes. It relates to the annual turnover of taxable transactions in Poland, and once the limit has (or will be)

No. There is no registration limit for businesses that are not established in Poland and they will need
internet sales.

In certain circumstances, a non-established person may be directed by Polish tax authority to appoint a
Most businesses submit VAT returns covering monthly accounting period. Returns can also be submitted
on a quarterly basis.

Polish Fiscal Penal Code stipulates certain penalties for late submission of returns and late payment of tax.

There is no any particular extra penalty for late submission of returns or late payment of tax. The
taxpayer is obliged to settle VAT plus interest. He may also by punished by tax authority for criminal
offence.
Yes. Penalties can be imposed for a range of errors or omissions according to Penal Fiscal Code.

Poland
Deduction of VAT
The rule is that to the extent to which goods and services are used for carrying out taxable activities, the
taxpayer shall enjoy the right to reduce the amount of output tax by the amount of input tax.

The reduction of the amount and the refund of the difference of the output tax shall not apply to the
following items being acquired by the taxpayer:
accommodation and catering services except for the purchase of prepared meals for passengers by
taxpayers providing the passenger transport services
in the case of expenditures related to motor vehicles, the input tax amount shall be 50% of the tax
amount resulting from the invoice received by the taxpayer.
Are there any specific rules for decreasing output

VAT in case the correction invoice is issued?
Yes, in Poland it is important to obtain the proof that the recipient of the correction invoice received it.
Only under this condition output VAT may be decreased.
In the cases price reduction or returning of the goods, the tax base shall be reduced, in relation to the
tax base shown in the invoice which has already been issued and which shows the tax, provided that the
taxpayer is in possession, before the lapse of the time limit for filing the tax return for a given settlement
period during which the acquirer of goods or service recipient received a corrective invoice, of the
confirmation of the receipt of the corrective invoice by the acquirer of goods or service recipient to which
the invoice was issued. If the taxpayer obtains the confirmation of receipt by the acquirer of goods or
service recipient of the corrective invoice after the time limit for filing the tax return for a given settlement
period, he shall be entitled to take account of the corrective invoice for the settlement period during which
such a confirmation has been obtained.

This rule shall apply accordingly if any error is found in the amount of the tax shown in the invoice and
if the corrective invoice is issued in respect of the invoice in which the tax amount shown was higher than
the due one.

The condition of possessing by the taxpayer of the confirmation of receipt of the corrective invoice by
the acquirer of goods or services recipient shall not apply:
1. in the case of export of goods and intra-Community supply of goods
2. in the case of supply of goods and provision of services whose place of taxation is located outside
the territory of the country
3. in the case of the sale of: electricity, heating or cooling energy, pipeline gas, telecommunication
services and the services listed under items 140 to 153, 174 and 175 of Schedule 3 to the Act
4. if the taxpayer has not obtained the confirmation, despite documented attempts to hand in the
corrective invoice and it appears from the documentation they hold that the acquirer of goods or
service recipient is aware that the transaction has been carried out in accordance with the conditions
specified in the corrective invoice.

Poland and in other European Union (EU) countries.
ie the sale.
A transaction is within the scope of Polish VAT if the

it is a supply of goods or services. The supply of goods
shall be understood as transfer of the right to dispose of
the goods as their owner. The provision of services shall be
understood as each performance for the benefit of a natural
person, legal person or organizational unit without legal
personality which does not constitute supply of goods.
it takes place in Poland
it is made by a taxable person. Taxpayers shall be legal
persons, organizational units without legal personality and
natural persons, who individually carry on the economic
activity regardless of the purpose or results of such
activity. Economic activity shall include any activity of
manufacturers, traders or service providers, including the
subjects acquiring natural resources and farmers, as well
as the activity of persons practising liberal professions.
Economic activity shall particularly include activities
consisting in using goods or intangible fixed assets in a
continuous manner for profit-gaining purposes.
Poland
services in Poland; the standard rate, the reduced rates, and the
from the tax.
Most goods imported into Poland from outside the EU are
custom duty.

supplies in Poland exceeds the annual registration limit, or is
not been exceeded.
The sale carried out by taxpayers for which the total sales
value did not exceed in the preceding tax year the amount of
150,000 PLN shall be exempt from tax. The value of sales shall
not include the tax amount.
Registration for VAT in Poland may also be required where

via the internet.
selling threshold of either 35,000 or 100,000 per calendar year,
or the equivalent in its own currency. Poland has adopted an
annual threshold of 160,000 PLN.
persons in Poland will be subject to VAT at the appropriate
distance sales to Poland exceeds the threshold of 160,000 PLN:
the supplier becomes liable to register for VAT in Poland
Poland becomes the place of supply
any further sales to customers in Poland are subject to
Polish VAT.
Suppliers can choose to make Poland the place where the goods

There is a special scheme for telecommunication, broadcasting
or electronic services supplied by subjects having their seat of
economic activity in the EU but not having such a seat in a
member state of consumption, to persons not being taxpayers.
A taxpayer providing telecommunication, broadcasting or
electronic services to persons not being taxpayers, having their
seat, permanent place of residence or ordinary place of stay
in a Member State of consumption, may submit a notification
indicating the intention to make use of the special VATsettlement scheme in the Member State in which it has:

who are not established in Poland, but for the purposes of the
Poland, irrespective of the level of turnover.
Poland
1. its seat of economic activity

2. a permanent place of carrying on economic activity, if it
does not have its seat of economic activity in the territory of
the EU
3. a permanent place of pursuing economic activity and that it
chooses for the purpose of submission of the notification, if
it does not have its seat of economic activity in the territory
of the European Union, but has more than one permanent
place of pursuing economic activity in the territory of the
EU.
Where Poland is the member state of identification, the
notification shall be filed with the head of the second revenue
office by electronic communication means.
Taxpayers identified for the purposes of a special VATsettlement scheme shall be obliged to file by electronic
communication means returns for the purposes of VAT
settlement, hereinafter referred to as VAT returns, with Drugi
Urzd Skarbowy Warszawa-Srodmiescie [the Second Revenue
Office Warsaw-Centre].
VAT returns shall be submitted for quarterly periods, by
the 20th day of the month following each subsequent quarter.
Taxpayers identified for the purposes of a special VATsettlement scheme shall be obliged to keep in electronic form
records of the transactions covered by the special VATsettlement scheme, in accordance with the requirements
referred to in Article 63 c of Regulation No 282/2011.
The VAT records referred to shall be stored for the
period of ten years from the end of the year in which the
telecommunication, broadcasting or electronic services
were provided.

The taxpayer not having his seat of economic activity or
permanent place of carrying on economic activity in the
territory of a Member State, which is subject to the duty to
register as an active VAT payer, shall be obliged to appoint a
tax representative.
The taxpayer having his seat of economic activity or
permanent place of carrying on economic activity in the
territory of a Member State other than the territory of the
country may appoint a tax representative.
The minister competent for public finance may, by
regulation, specify the cases in which there is no need to
appoint a tax representative, taking into account the need to
ensure a correct tax settlement by subjects not having their
seats of economic activity or permanent place of carrying on
economic activity in the territory of a member state.

The taxpayers shall be obliged to submit their tax returns to the
revenue office monthly, by the 25th day of the month following
each subsequent month.
The taxpayers may also submit tax returns quarterly having
notified the head of a revenue office thereof in writing at the
latest by the 25th day of the second month of a quarter for
which a quarterly tax return is to be filed for the first time. A
taxpayer who, during a tax year, starts carrying out taxable acts,
shall make the notification referred to in the first sentence by
the 25th day of the month following the month during which
he/she started performing these acts.

Polish Fiscal Penal Code stipulates certain penalties for late
submission of returns and late payment of tax.
However there is no any extra penalty added to the tax.
Only penalty interest are calculated and taxpayer is obliged to
pay it. It taxpayer pays late VAT by himself he has to calculate
the interests according to proper rate established by law
(currently it is 8% per annum). However if tax authority finds
out the irregularity, the penalty interests increase to 150% of
rate therefore now it is 12% per annum.

Businesses that are registered for VAT in Poland, and make
Collective information shall be submitted for monthly
periods, by the 15th day of the month following the month in
which the tax liability in respect of certain transactions arose.
Summary information submitted by electronic
communication means shall be submitted by the 25th day of the
month following the month in which the tax liability in respect
of certain transactions arose.
Poland

not comply with the VAT rules. These penalties come from
Penal Fiscal Code.
serious matters.

claimed if they are not registered in Poland?
circumstances.
incurred.

into Poland or purchases of goods and services used in Poland.
Poland
he made no supplies of goods and services in Poland other
comparable system of turnover taxes, unless the Polish tax
established in Poland.

the invoice date
the total amount of VAT charged expressed in PLN
Where a VAT invoice exempt goods or services, it must:
or services
show clearly the provision of the Act or an instrument
issued under the Act on the basis of which the taxpayer
applies tax exemption or the provision of Directive
2006/112/EC which exempts such supply of goods or
such provision of services from tax or other legal grounds
indicating the fact that supply of goods or provision of
services is subject to tax exemption.
Poland

supply of goods or services. The authenticity of the origin and
integrity of the content of an electronic invoice are guaranteed,
in particular, by means of:
1. an advanced electronic signature within the meaning of
Article 3, subparagraph 2 of the Act of 18 September 2001
on Electronic Signature (Dziennik Ustaw 2001, No. 130,
item 1450, as amended), verifiable by means of a valid
qualified certificate; or
2. electronic data interchange (EDI) in accordance with the
European Model EDI Agreement, where the agreement
relating to the exchange provides for the use of procedures
guaranteeing the authenticity of the origin of invoices and
integrity of their data.
The use of electronic invoices shall be subject to acceptance by
the invoice recipient.
The invoices shall be drawn up in at least two copies, one of
which is issued to the acquirer and the other one is kept in files
by the taxpayer affecting the sale.
The invoice shall be issued not later than on the 15th day of
the month following the month in which the goods or services
were supplied (general rule, the exceptions refer to specific
transactions).
For further information on indirect tax in Poland please contact:
Maciej Hadas
T +48 61 625 1323
E maciej.hadas@pl.gt.com
Portugal
Standard rate of 23% for most goods and services (22% in Madeira and 18% in Azores).
Intermediate rate of 13% (12% in the Autonomous Region of Madeira and 9% in the Autonomous
Region of Azores) applies to a specific list which includes for example preserved produce of fish
and meat, bottled water, table wine, tickets to specific shows (singing, dancing, music, theatre,
cinema, etc.).
Reduced rate of 6% (5% in the Autonomous Region of Madeira and 4% in the Autonomous Region of
Azores) applies to agriculture or farm produce, newspapers and magazines, medication, products
for agricultural use, passenger transport, hotel accommodation and certain entertainment forms,
public works contracts, etc.
Exempt supplies an extensive list including the following broad categories: insurance and financial
activities, renting and sale of real estate, medical and veterinary services, education, health and
welfare, etc.

to these rates?
No.
Value Added Tax (VAT) is the principal indirect tax in Portugal, being generally applicable to the supplies
of goods and/or services. As such, it is a tax on consumer expenditure, and is collected on business
transactions and imports.
No.

There is no registration limit for businesses that are not established in Portugal and they will need to
register as soon as they start carrying out taxable transactions. Different registration requirements also
internet sales.

A non-EU established person is obliged to appoint a Portuguese tax representative. For EU-residents, such
appointment is not compulsory.
Depending on the turnover, returns can be submitted quarterly or monthly.

Yes. If a VAT return, or the corresponding payment, is submitted late a penalty can and is
usually imposed.
Portugal
Yes. Additional declarations (EC Sales and Services List or ESLs) have to be submitted in respect of
certain supplies made to customers who are registered for VAT elsewhere in the EU. Declarations also
have to be submitted in certain circumstances in connection with goods moving to or from the EU.
Yes. Penalties can be imposed for a range of errors, omissions or failures.


Portugal and in other European Union (EU) countries.
ie the sale.
services in Portugal; the standard rate, the intermediate rate
and the reduced rate. In addition, some goods and services are
exempted from the tax (with or without right to deduction of
the input VAT).
In general, businesses that make exempt supplies are unable
to claim all of the input tax that they incur, so the VAT paid to
suppliers will be a real cost.
Most goods imported into Portugal from outside the
EU are subject to VAT. The tax will have to be paid by the

custom duty.

your country?
Portugal

No. A person who either makes or intends to make taxable
business must register for VAT as soon as it starts
its operations.
Apart from very specific situations, there is no VAT
grouping in Portugal.

There is no registration limit either for established or nonestablished businesses. All businesses will need to register
for VAT as soon as they commence trading in Portugal,
Registration for VAT in Portugal may also be required
calendar year, or the equivalent in its own currency. Portugal
has adopted an annual threshold of 35,000.
persons in Portugal will be subject to VAT at the appropriate
those distance sales to Portugal exceeds the above mentioned
threshold of 35,000:
the supplier becomes liable to register for VAT in Portugal
Portugal becomes the place of supply
any further sales to customers in Portugal are subject to
Portuguese VAT.

in your country?

It is mandatory to appoint a fiscal representative herein in case
the person is established outside the EU.

Businesses whose annual turnover is more than 650,000 must
prepare and file monthly returns within one month and ten
days of the end of each month.
Businesses whose annual turnover is less than 650,000
must prepare and file quarterly returns within one month and
fifteen days of the end of each quarter.
Annual returns must be submitted by the 15th of July of
the following calendar year (this return is a summary of the
periodic VAT returns filled).
Suppliers can choose to make Portugal the place where the

Portugal


claimed if they are not registered in Portugal?
Returns which are filed late can be fined between 300

and 3,750. However, reductions are applicable under
certain conditions.
Late payments are subject to interest at the rate of 4% per
year of the tax and a penalty ranging between 30% and 100%
of the tax due is normally applicable.

certain circumstances. Two schemes exist, one for businesses
established in the EU and another for businesses established
elsewhere.

Businesses that are registered for VAT in Portugal and make
other EU countries are required to complete and submit ESLs.
The ESLs must show details of the recipients of the goods and
services.

additional declarations) or makes repeated mistakes.
Criminal proceedings may be brought in the case of serious
damages caused to the Portuguese tax authorities.

was incurred.
into Portugal or purchases of goods and services used in
Portugal. The scheme is available to any person carrying on
a business established in a third country, ie outside the EU,
in Portugal
they made no supplies of goods and services in Portugal
where they are established in a third country, having a
comparable system of turnover taxes that country provides
persons established in Portugal.
Portugal

Invoices issued by VATable persons must be dated,
sequentially numbered and contain the following data:
1. Name, address and tax number of both the supplier and the
acquirer of the goods and/or services.
2. Quantity and description of the goods and/or services
supplied (including the necessary information that enables
the determination of the applicable VAT rate).
3. Taxable amount.
4. Applicable VAT rate and the amount of VAT charged.
5. Grounds for the non-application of VAT; if applicable.
6. The date in which the supply of goods and/or services took
place (or the date in which any advanced payment was
made, if such date is not the same as the date of issuance of
the invoice).
Please note: if the operation(s) at stake, concerns goods and/
or services subject to different VAT rates, the data referred on
bullets 2, 3 and 4 above shall be indicated separately, according
to the respective applicable rate.
Disclosing the name and address of the acquirer of the
goods and/or services, when it does not refer to a VATable
person, is not mandatory on invoices whose amount is lower
than 1,000, unless otherwise requested.
Disclosing the acquirers tax number, when it does not refer
to a VATable person, is always mandatory when requested.
Where a business makes retail sales and makes a sale of
goods or services for 100 or less including VAT, a simplified
VAT invoice can be issued (with less strict requirements)
electronic format and there is no need to inform the Portuguese
tax authorities upfront. Electronic invoices must contain the
same information as paper invoices.
The method used to ensure the authenticity of origin,
the integrity of the content and legibility of the invoices is a
business choice and can be achieved by any business controls
For further information on indirect tax in Portugal please contact:
Pedro Ferreira Santos
T +351 21 413 46 30
E pedro.santos@pt.gt.com
Portugal
Romania

Reduced rate of 9% for some goods and services including medicines for human and vegetarian
use, accommodation in hotels, human and animal food, restaurant and catering activities, supplies of
drinkable water.
Reduced rate of 5% applies for supply of books, newspapers and magazines, school textbooks, with
the exception of those intended solely or mainly for publicity , services consisting of admission to
castles, museums, memorial houses, historical, architectural and archaeological monuments, zoos,
botanical gardens, fairs, exhibitions and similar cultural and sports events, cinemas, supplies of
buildings if they are part of a social policy or if they are supplied as housing to an individual/family in
certain conditions.

to these rates?
According to the New Tax Code in force starting 2016,the standard VAT rate will be 19% starting with
2017.
The main indirect tax in Romania is value added tax (VAT). Although VAT has generally been harmonised
within the European Union by various European Commission directives, there are still a lot of different
practises, habits and loopholes in the individual countries. The VAT legislation in Romania follows the
structure of the European VAT Directive.
Yes. The annual turnover threshold for VAT registration is the RON equivalent of 65,000, and once the
limit is reached, it is necessary to register.

No. There is no registration limit for businesses that are not established in Romania and they will need to
register before commencing the taxable transactions. Different registration requirements also apply to
businesses involved in distance sales made within the European Union (EU), e.g. mail order and Internet sales,
for which the threshold for VAT registration in Romania is of 35,000.

A non-established person, who is established outside EU, must appoint a fiscal representative for VAT
registration in Romania. A taxpayer who is not established in Romania, but it is established in other EU
member state may either register directly or appoint a fiscal representative.
Taxpayers must file VAT returns with the Romanian tax authorities and pay VAT on a monthly basis,
specifying the taxable amount and the tax due. The tax return must be filed and the respective VAT paid
by the 25th of the following month. In case of taxpayers whose annual turnover is less than 100,000 the
VAT returns should be submitted with the tax authorities on a quarterly basis.

Yes. If a VAT return, or the corresponding payment, is submitted late, a penalty and interest are imposed.
Romania
Yes. Taxable persons registered for VAT purposes have to submit the recapitulative statement regarding
intra-community purchases/supplies of goods/services (EC Sales List). Also, taxable persons registered
for VAT purposes in Romania must submit a declaration including all supplies/acquisitions of goods/
services taking place in Romania to or from other taxable persons registered for VAT purposes in
Romania (i.e. list of domestic transactions). For the intra-community trade of goods, taxable persons also
have to submit an Intrastat statistical report.


The main indirect tax in Romania is Value Added Tax (VAT).
The VAT is an indirect tax on the consumption of goods
and services and is normally borne by the final consumer. This,
in general, is accomplished by imposing VAT on all stages of
manufacturing, wholesaling, retailing, etc., but allowing the
supplier to offset the tax payable against VAT incurred on its
business expenses.
In practice, VAT is charged on goods and services (actual
or deemed) supplied by taxpayers in Romania, goods acquired
from the European Union (EU) and on goods imported into
Romania. Only the VAT charged by the suppliers on purchases
incurred by the taxpayer for generating taxable activities can be
deducted.
Operations which fulfil the following conditions fall within
the scope of VAT:
they represent a supply of goods/services in return for a
consideration or an operation treated as such
the deemed place of supply is in Romania
they are performed by taxable persons
they result from economic activities.
Moreover, the import of goods, intra-community acquisitions
of goods and operations deemed as intra-community
acquisitions of goods are also within the scope of VAT.
VAT on imported goods continues to be paid in customs,
except for taxable persons registered for VAT purposes that
obtain an import VAT deferment certificate from the customs
authorities. For these, the VAT is not paid in customs, but
shown in the VAT return as both input and output VAT
(reverse charge mechanism).
The taxable amount for VAT purposes for imported goods

is the customs value, to which customs duties, excise duties
(if any) and ancillary expenses, such as commissions, packing,
transport and insurance costs occurring subsequent to the entry
of goods into Romania until their first destination, as well as
those incurred for the transport to another destination place
within the Community, if the place is known at the moment of
the import, are added.
As of 1 January 2013, the cash accounting scheme for VAT
was introduced in the Romanian VAT legislation and consist
in the deferment of the VAT payment until the value of goods
or services delivered is cashed in, while the right to deduct the
input VAT for the acquisitions performed by the taxpayers
applying the VAT cash accounting system is also postponed
until the moment when the invoices are paid. Furthermore, the
right to deduct the input VAT by the beneficiaries of invoices
issued by the taxpayers applying the cash accounting system for
VAT is postponed until the payment is performed.
The VAT cash accounting system is optional for taxpayers
with an annual turnover lower than RON 2,250,000 registered
in the previous calendar year, and for newly established
companies. By exception, the system does not apply for
taxpayers which are part of a fiscal group, for taxpayers
who are not established for VAT purposes in Romaniaor
for taxpayers whose turnover exceeds the aforementioned
threshold. Likewise, the VAT cash accounting system does not
apply for VAT exempted transactions, for transactions subject
to special VAT schemes (e.g. the special schemes for travel
agencies, second-hand goods, works of art, gold investments),
for transactions performed between related parties or for those
subject to reverse charge mechanism (i.e. when the beneficiary
is the person obliged for paying the VAT). Moreover, the
system does not apply for intra-community operations, imports
or exports.
Romania

The annual turnover threshold for VAT registration is the
RON equivalent of 65,000, computed by using the foreign
exchange rate of the date of Romanias accession to the EU
(i.e. RON 220,000). When calculating the turnover, revenues
derived from some types of VAT exempt transactions without
deduction right operations are also taken into consideration, if
they are not considered ancillary to the main transactions.
As of 1 February 2012, companies which are legally
independent but are closely related in terms of financial,
economic and organisational purposes may opt to be treated
as a tax groupas long as they are administered by the same
competent fiscal body. The following conditions should also
be met:
a taxable person is allowed to be part of only one single
tax group
the option must refer to at least two-year period
all the taxable persons within a group must apply the same
fiscal period.
The VAT group may be formed of minimum two taxable
persons. The following shall be deemed closely inter-related
from a financial, economic and organisation perspective:
taxable persons whose capital is directly or indirectly held in
proportion of more than 50% by the same shareholders.
The competent tax authority shall take an official decision
whereby approving or rejecting the implementation of the VAT
group and shall notify the decision to the group representative
within 60 days as of the receipt of the application.
As of implementation of the single tax group, each member
of the tax group, other than the representative has the following
obligations:
shall report in the VAT return any supply of goods, or
services, import or intra-Community acquisition of goods
or any other transaction carried on by or to the benefit of
such member throughout the tax period
shall send his VAT return to the representative, and a copy
thereof to the tax authorities of jurisdiction
shall not pay any tax due and shall not request any refund
according to his VAT return.
The representative has, in its turn, the following oblgations:
shall report in the VAT return any supply of goods or
services, import or intra-Community acquisition of goods
or services and any other transaction carried on by or to the
benefit of such member throughout the tax period
shall report in a consolidated return the results of all VAT
returns received from other members of the tax group as
well as the result of his own VAT return for such tax period
shall file with the tax authorities of jurisdiction all VAT

returns of members as well as the consolidated VAT return
shall pay or, if applicable, shall request VAT refund
resulting from the consolidated VAT return.
Each member of the tax group shall:
file the recapitulative statement (EC Sales List) to the tax
authorities of jurisdiction
be subject to the audit of the tax authorities of jurisdiction
be liable jointly and severally for any tax due by him or by
any member of the tax group for the entire membership to
such group.
Supplies of goods and services made by each member of the
group shall be subject to the normal tax scheme, regardless
whether they are made to third parties or to the other members
of the tax group, each member of the group being considered a
separate taxable person..

Foreign taxpayers may register in Romania for VAT purposes
without the need to form a local company known as nonresident VAT trading. There is no VAT threshold in Romania
for the registration of non-resident traders. For businesses
incorporated in other countries, but established for VAT
purposes in Romania by mean of a fixed establishment,
a Romanian VAT number must be obtaiend before the
commencement of taxable supplies.
Foreign traders not established for VAT purposes in
Romania have an obligation to register for VAT purposes in
Romania for making:
supply of goods or services in Romania that is subject to
Romanian VAT or are considered exempt with credits,
except for the cases where the person who is liable to pay
the tax is the beneficiary of goods or services
intra-community acquisitions/supplies of goods in/from
Romania
distance sales to Romania exceeding the registration
threshold.
Not-established VAT payers may register for VAT purposes
in Romania for performing importation of good, as well as
transactions with immovable properties for which they chose to
apply the taxation regime.
Romania
In case of distance sales made from a Member State to

Romania the place of supply shall be considered in Romania,
provided that the supply is made by an acquiring taxable person
or a non-taxable legal entity, or by any other non-taxable
person and provided that the following conditions are met:
the total amount of distance sales whose transport or
dispatch in Romania is made by a supplier in the calendar
year when a distance sale takes place, inclusively of that
distance sale, or in the previous calendar year, exceeds
the ceiling for distance sales of EUR 35,000, whose RON
equivalent is set out in the Norms; or
the supplier opted in the Member State wherefrom goods
are transported for the consideration of its distance sales
involving transport of goods from a Member State to
Romania as taking place in Romania.
The ceiling shall not apply to distance sales of products subject
to excises from a Member State to non-taxable persons from
Romania, other than non-taxable legal entities, thus the place of
supply for such distance sales shall always be in Romania.
The procedure for distance sales also applies in the reverse
situation, where a trader sells goods from Romania to private
individuals or non-taxable entities who reside in other EU
member states.
The distance sales rule does not apply to the supply of new
means of transportation or to the supply of goods under a
supply and installation contract or other specific exceptions.

in your country?


Non-residents EU taxable persons, not established in Romania
may register with the relevant fiscal authority either directly,
or by appointing a fiscal representative. In the case of the direct
registration, this person shall declare the address in Romania
where all the fiscal registers and documents can be examined.
In case of registration through a fiscal representative, the
registration procedures are carried out by the relevant tax
authority where the fiscal representative is located.
Non-resident taxpayers established outside the European
Union may register for VAT purposes, only through
appointment of a VAT fiscal representative. The registration
procedures are carried out by the relevant tax authority where
the fiscal representative is located.

Every taxable person registered for VAT purposes has to
submit VAT returns.
As a general rule, the fiscal period for submitting the VAT
returns is the calendar month. For taxable persons registered
for VAT purposes whose previous year-end turnover did not
exceed 100,000 the fiscal period is the calendar quarter.
For those taxpayers whose fiscal period is the calendar
quarter, the fiscal period becomes the calendar month if they
perform a taxable intra-community acquisition of goods in
Romania.
Also, the VAT returns must be submitted with the tax
authorities by the 25th of the month following the end of the
fiscal period (i.e. month / quarter). The payment of the tax must
be performed by the same date as the date of submission with
the tax authorities.
Romania

For not complying with the VAT legal requirements (late
payments, incorrect fillings, late submission of returns, etc.),
taxpayers are subject to penalties such as interest and fines as
provided by the Romanian Tax Procedure Code.
As of 1 January 2016, the late-payments are subject to
interests computed by applying a rate of 0.02% for each
day of delay, as well as late payment penalties computed by
applying 0.01% per day to the overdue tax liabilities. Also,
in case the tax authorities establish differences of VAT by
issuing a tax decision following a tax inspection, besides late
payment interests and penalties, such differences are subject to
a penalty for incorrectly declaring the tax liabilities, computed
by applying 0.08%/day to the differences established by the tax
authorities The penalty for incorrectly declaring the liabilities is
limited to the value of the principal, except for the cases of tax
evasion.
For a late submission of the tax return there is a fine ranging
between RON 1,000-5,000 (approximately 222-1,111, at an
average FX rate of 1 EUR = 4.5 RON).

Taxable persons registered for VAT purposes in Romania
should submit a declaration including all supplies/acquisitions
of goods/services taking place in Romania to or from other
taxable persons registered for VAT purposes in Romania
(form 394).
The taxable persons should also submit the recapitulative
statement (EC Sales List) on a monthly basis, not later than
the 25th day of the month following that in which the intracommunity supply/ acquisition of goods or services has
occurred, for all intra-community operations made with taxable
persons established in other member states.
The recapitulative statements are to be submitted only for
the periods during which a chargeability of the tax occurs (no
nil-return is required).
The obligation to provide Intrastat statistical data is
applicable to all economic operators that simultaneously meet
the following conditions:
are registered for VAT purpose
trade goods with other member states of the EU
the total annual value of goods trade with other member
states of the EU for each of the two flows, acquisitions
and dispatches, respectively, exceeds the annual Intrastat
thresholds as approved by the law.
Companies, which in the previous year exceeded the value

of thresholds set up for the current year, will send Intrastat
declarations for all months of the current year. Companies,
which in the current year exceed the value of thresholds, will
send Intrastat statements starting with the month in which they
exceeded the thresholds.
The statistical thresholds are set separately for each type
of movement of goods and may have different values for
acquisitions and dispatches of goods. For the year 2013,
Intrastat thresholds were:
for intra-community dispatches: RON 900,000
(approximately 200,000, at an average FX rate of
1 EUR = 4.5 RON)
for intra-community arrivals: RON 500,000
(approximately 111,111, at an average FX rate of
1 EUR = 4.5 RON).
The Intrastat statistical return must be filed on a monthly basis
no later than the 15th of the month following the reporting
month. Complete forms should include details such as the trade
classification of the goods, quantities, shipping costs, countries
of departure and arrival, etc.

Failure to register for VAT purposes
If an entity has the obligation to register for VAT purposes

in Romania and does not comply with this requirement, the
competent tax authority shall register that entity without
application. If the entity performs taxable supplies, and it is
in VAT payable position (i.e. the output VAT for its taxable
transactions is higher that the input VAT for its purchases), late
payment interest and penalties will be applied.
Failure to submit/correctly declare the EC sales and
acquisitions
Late submission of recapitulative statements will impose a

penalty between RON 1,000-5,000 (approximately 2221,111, at an average FX rate of 1 EUR = 4.5 RON).
For incorrect filling of the recapitulative statements, the
tax authorities will impose a penalty between RON 500-1,500
(approximately 111-333, at an average FX rate of 1 EUR =
4.5 RON).
Romania
Fraud
Moreover, the following tax offences are criminal or

minor offences:
tax evasion is committed if a taxpayer intentionally gives
incorrect or incomplete information to the tax authorities
or if he withholds information necessary to calculate the
correct tax liability
evasion of import duties (including import VAT)
minor offences.

claimed if they are not registered in Romania?
Taxable persons not registered and which do not have the
obligation to register for VAT purposes in Romania may
request a VAT reimbursement from Romania based on the
refund request transmitted electronically to the authorities from
the member state where they are registered no later than 30
September of the year following the reimbursement period.
The settlement period is of four months from the date
when the request is received by the Romanian authorities,
with an option to be extended if the tax authorities require
further information.
Taxable persons established outside the EU also have
the right to claim a VAT refund from Romania, based on
reciprocity agreements signed by Romania.

The mandatory information that must be included on an
invoice is in line with the provisions of the EU VAT Directive
112/2006 on this matter, as follows:
a sequential number, according to one or more series, that
the date when the invoice is issued
the date when the goods/services were supplied or the date
when the advance was cashed, if the latter date differs from
the date when the invoice was issued
the name, address and VAT ID number or, on a case-bycase basis, the tax number of the taxable person issuing the
invoice
the name of the supplier not established in Romania which
appointed a tax representative, as well as the name, address
and VAT ID number of such tax representative
the name and address of the beneficiary of goods/services,
as well as the VAT ID number or the tax number of the
beneficiary, in case the beneficiary is a taxable person or a
non-taxable legal entity
the name of the beneficiary not established in Romania

which appointed a tax representative, as well as the name,
address and VAT ID number of the tax representative
the name and the quantity of goods supplied, the name
of the services supplied, as well as the relevant details for
defining the goods, in case of intra-Community supplies of
new transport means
the taxable base of goods and services or, on a case-by-case
basis, the advances cashed, for each tax rate, exemption or
non-taxable operation, the unit price, excluding VAT, as
well as the discounts and other price reductions, in cases
where they are not included in the unit price
the applicable VAT rate and the output VAT amount, in
the Romanian local currency RON, depending on the
applicable VAT rate
in case the invoice is issued by the beneficiary on account
and on behalf of the supplier, the mention self-invoice
in cases where no VAT is due, the indication of the relevant
article from the Tax Code/EU Directive 2006/112/EU or
any other mention showing that the respective supply of
goods/services is VAT exempt or subject to the reverse
charge mechanism
in cases where the client is the person liable to pay the VAT,
the mention reverse charge
in case the special regime for travel agencies is applicable,
the mention the margin scheme travel agents
if one of the special regimes for second-hand goods, works
of art, collectors items and antiquities applicable, one of
the mentions the margin scheme second-hand goods,
the margin scheme works of art, the margin scheme
collectors items and antiques, as the case may be
in case the VAT chargeability occurs at the cashing date
for whole or partial counter-value of the supply of goods/
services, the mention cash accounting for VAT
a reference to prior invoices or documents issued, in case
more than one invoice or document is issued for the same
operation.
As of 1 January 2013, new rules regarding the invoicing
procedure have been introduced establishing equal treatment
for hard copy or electronic invoices meeting the same
requirements. Therefore, any hard copy or electronic document
is considered an original invoice if it meets the minimum
mandatory requirements concerning the layout of the invoice.
Romania
An electronic invoice is defined under the Romanian VAT

legislation as any invoice, containing all the elements required
by domestic VAT provisions, that is issued and received in
electronic format.
The type of the electronic format for the invoice is up to the
company decision, (e.g. xml, pdf, etc.).
According to the Romanian VAT legislation, the manner in
which the authenticity, integrity and legibility are guaranteed
is, in principle, decided at the level of the taxable persons. Thus,
the authenticity of origin, the integrity of the content and the
legibility may be guaranteed through management controls
only, that set audit trails ensuring a direct connection between
a transaction, the corresponding invoice and other documents
issued in connection with that transaction. Besides management
controls, the authenticity of origin and the integrity of the
content could be guaranteed by means of an electronic
signature or by using of Electronic Data Interchange system.
The use of the electronic invoice is subject to the acceptance
of the recipient. Acceptance may include the following: (i) a
written agreement, received form the recipient; (ii) an implicit
agreement of the recipient consisting in proceeding to the
processing or the payment of the electronic invoice.
Moreover, the recipients acceptance also represents a
confirmation that it has the necessary technical resources to
receive electronic invoices, as well as the capacity to ensure the
authenticity of origin, integrity of the content and legibility.
For further information on indirect tax in Romania please contact:
Nadia Oanea
T +40 21 32 02 328
E nadia.oanea@ro.gt.com
Romania
Russia
The standard VAT rate in Russia is 18%.

VAT rate of 10% applies to certain foods, childrens goods, medical and pharmaceutical products, certain
books and periodicals and services for the internal air transportation of passengers and baggage and services
in transportation of passengers and baggage by railway transport of common use over long distances.
0% VAT rate is applied for export of goods, their international transportation and related freight
forwarding services, international passenger transportation, etc.
Computed VAT rates (10/110 and 18/118) are applied to certain transactions including the receipt
of advance, transfer of property rights and to withholding VAT by the tax agents.

to these rates?
No.
Value Added Tax (VAT) is the principal indirect tax in Russia. It is applied to sales of goods, work and
services in the territory of the Russian Federation, imports to the customs territory of the Russian
Federation, transfer of goods for own consumption, performance of construction and assembly work for
own purposes.
The current tax legislation does not provide for a separate VAT registration with Russian tax authorities.
The established general tax registration requirements are applicable to all taxes, including VAT. All
taxpayers are required to obtain tax registration and be assigned a taxpayer identification number
regardless of the amount of taxable supplies.

Not applicable.

Not applicable.
VAT returns should be submitted quarterly.

Yes. Companies and individual entrepreneurs that import goods from the territory of Belarus and
Kazakhstan should submit a special VAT return to the tax authorities.
Russia
Yes. A range of penalties can be imposed where businesses do not comply with the VAT rules.

No, only taxpayers, who obtained tax registration and perform taxed activity in Russia, are allowed to
reclaim input VAT.
Deduction of VAT
The amount of tax payable to the budget shall be calculated as the VAT accountable on transactions
subject to VAT minus VAT incurred on purchases subject to VAT.
But input VAT cannot be deducted from VAT base in the several cases:
on purchases of goods (works and services) and property rights which are used in non-taxed activities
on some business expenses that are limited for corporate income tax deduction (for example fuel for
cars, business entertainment and travel, conferences, advertising, mobile phone expenses, etc.)

Value Added Tax (VAT) is the principal indirect tax in the
Russian Federation.
VAT is a type of indirect tax which is charged on the final
but is collected at every stage of production and distribution.
Liability for VAT rests with the person supplying the taxable
goods, works or services or importing goods into Russia.
However, the supplier is allowed to deduct from his VAT
liability on sales made the amount of VAT paid and properly
invoiced to him in relation to purchases effected by him, or
VAT paid by him at importation. The actual burden of the tax
is therefore borne by the final consumer.
VAT is a federal tax and is payable to the federal budget of
the Russian Federation.
Taxpayers are Russian companies, foreign companies and
entrepreneurs without forming a legal entity. Taxpayers with
taxable supplies below RUB 2 000 000 (approx US$ 30,000,
VAT exclusive) in a three preceding months period are not
recognized taxable persons unless their taxable supplies exceed
the mentioned limit. Please be aware that such exemption of
taxpayers does not apply to excisable supplies and to VAT
payable at importation of goods to the territory of Russia.
VAT is generally levied upon:
supply of goods, works and services in the territory of the
Russian Federation, including supply on a free-charge basis
import of goods to the customs territory of the
Russian Federation
transfer of goods for own consumption
performance of construction and assembly works for
own purposes.
VAT is payable if such supplies are made in the Russian
Federation by a taxpayer and not exempt or zero-rated.
Supplies of goods, works, services, which are made in the
Russian Federation and not exempt, are called taxable supplies.
The Russian Federation is regarded to be the place of

performing work and providing services in case the purchaser
of such work and services is registered (with tax authorities)
in the territory of the Russian Federation. This rule applies to
advisory, legal, accounting, advertising, marketing, engineering
and data processing services. There are certain rules in respect
to other types of services.
Generally, VAT amounts paid to suppliers of goods,
work, services shall be offset if such goods, work and services
were used for the operations subject to VAT; respective
goods, services are reported in the taxpayers accounts, proper
documentation is available. VAT amounts may also be offset if
goods, work and services sold are subject to VAT at the rate of
0% subject to special rules. If input VAT exceeds output VAT
the difference may be reclaimed from the budget.
In some cases VAT amounts paid to the suppliers of goods,
work, services are added to the profits tax deductible expenses
(for example, if they are used for VAT exempt operations).
There are the following rates of VAT:
a standard rate of 18% all goods and services standard
rated unless defined to be reduced rated or exempted
a reduced rate of 10%
a zero rate
computation rates of 18/118 or 10/110 certain transactions
including the receipt of advance, transfer of property rights
and to withholding VAT by the tax agents.

Russian legislation does not provide for a separate VAT
registration. A foreign legal entity that conducts business
activities in Russia through a separate division (representative
office, branch, construction sites and other places of business)
is required to register with the Russian tax authorities within 30
days of the commencement of such activities.
Therefore, once a company with presence in Russia gets
registered with the Russian tax authorities it is considered to be
registered for all taxes including VAT.
Russia


This is not applicable in Russia, since the Russian legislation

does not provide for a separate VAT registration.
Failure by a taxpayer to submit a tax return to the tax authority

entails a fine in the amount of 5% of tax which is payable
(additionally payable) on the basis of that tax return for each
full or partial month from the day which was established as the
deadline for its submission, but not more than %30 and not less
than RUB 1,000 (US$ 30).
If a taxpayer has any underpayment of VAT, Russian tax
authorities might impose late payment interest (currently
late payment interest is calculated as 1/300 of the Russian
Central Bank refinancing rate for each day of non-payment of
outstanding taxes). Besides, non-payment of tax shall entail a
fine in the amount of 20% of the unpaid tax. If understatement
of VAT is committed deliberately, then a 40% fine is applied.
A tax agent may also be penalised for failure to withhold
and remit VAT to the budget. A fine is equal to 20% of the
amount to be withheld and remitted to the budget.

in your country?
There is currently no specific legislation to tax non-resident
supplies of digital services to private consumers resident in
Russia. However, a draft law was passed by the Russian State
Duma in December 2015 seeking to tax non-resident supplies
of digital services. This legislation, if passed, is expected to come
into effect 1 January 2017.

Not applicable.

A tax period with respect to VAT is recognised as a quarter for
all the taxpayers.
A VAT return shall be completed in relation to
standard-rated and reduced-rated supplies, including lists for
zero-rated supplies.
A VAT return for each tax period must be completed
and submitted to the local tax authorities by 25th of a month
coming after the tax period (quarter). Please note that all VATpayers must send tax returns in electronic format.
VAT is payable in the amount of 1/3 of VAT due for the
quarter by the 25th of each month of the following quarter.
For example, VAT for the 2nd quarter 2015 must be paid by
25 July, 25 August and 25 September in equal parts.
Taxpayers must complete the regular VAT return even if no
supplies were made in the tax period.

Companies and individual entrepreneurs that import goods
from the territory of Belarus and Kazakhstan should submit a
special VAT return to the tax authorities.

Tax and administrative penalties may be also applied for
violation of procedure of electronic tax returns submission,
failure to maintain adequate records, procedure of documents
storage, non-provision of documents to the tax authorities,
repeated mistakes, unjustified reimbursement of VAT from
the budget.
serious matters.

claimed if they are not registered in Russia?
No, foreign companies not registered with Russian tax
authorities or foreign legal entities registered with Russian tax
authorities, but not performing VAT activity are not entitled to
recover Russian VAT charged by suppliers.
Russia

Any supplies of goods and services, with exception of sale of
securities, shall be reflected in VAT invoices. This applies to
standard-rated, reduced-rated, zero-rated and exempted goods
and services.
A supplier must issue two copies of a VAT invoice and send
the original copy to the buyer within five days after the tax
event occurred.
VAT invoice must also be issued by the supplier within five
days after the advance is received.
Companies that apply Simplified Taxation System and
Imputed Tax System do not issue VAT invoices since they are
not taxpayers of VAT. Besides VAT invoices are not required
in retail trading with individuals.
The following must be indicated in the VAT invoice:
the sequential number and date of issue of the invoice
the name, address and taxpayers identification numbers
(TIN) of the supplier and the purchaser and the Code of the
Reason for Registration (CRR)
the name and address of the consignor and of the consignee
the number of the payment and settlement document where
advance or other payments are received in respect of
future supplies of goods (performance of work, rendering
of services)
a description of goods supplied (dispatched) (a description
of work performed or services rendered) and unit
of measurement
the quantity (volume) of goods (work and services) supplied
(dispatched) in accordance with the invoice on the basis of
the accepted units of measurement
currency name
the price (tariff) per unit of measurement under the
agreement (contract) excluding tax or, where State regulated
prices (tariffs) which include tax are used, including the
amount of tax
the value of goods (work and services) for the entire
quantity of goods supplied (dispatched) in accordance
with the invoice (work performed, services rendered),
excluding tax
the amount of excise duty in the case of excisable goods
the tax rate
the amount of tax charged to the purchaser of goods (work
and services)
the value of the entire quantity of goods supplied
(dispatched) in accordance with the invoice (work
performed, services rendered), including the amount of tax
the country of origin of goods
the number of the customs declaration.
The VAT invoice shall be signed by the director and the chief
accountant of the legal entity or by other officers so authorised
in accordance with an internal order of the organisation. Where
an invoice is issued by an individual entrepreneur, the invoice
shall be signed by the individual entrepreneur indicating the
particulars of the certificate of state registration of that
private entrepreneur.
Please note that in case a VAT invoice has blank defects or
does not indicate all required information, mentioned above,
input VAT may not be reclaimed.
A VAT tax agent must issue VAT invoice indicating
on behalf of a foreign legal entity within five days after he
withheld output VAT and transferred it to the budget.
Exempt supplies must be invoiced with indicating the
words bot VAT taxable supplies.
VAT invoices may be issued on the hard copies
or electronically.
Does Russian VAT law have rules for

withholding VAT?
Yes. If a foreign company makes taxable supplies of goods and
services in the territory of Russia and a foreign company is not
registered with Russian local tax authorities, the purchasers of
such goods and services, registered taxpayers (legal entities and
individual entrepreneurs) act as tax agents.
Under provisions of the tax law individual entrepreneurs or
legal entities (Russian and foreign companies), registered with
Russian tax authorities, who entered into contracts with foreign
companies and purchased goods and services from them, is
obliged to fulfil obligations of a tax agent regarding VAT.
A tax agent is obliged to compute, withhold the tax and
transfer it to the federal budget of Russia.
For further information on indirect tax in the Russian Federation please contact:
Nadezhda Orlova
T +7 (495) 737 53 53
E orlovan@fbk.ru
Dmitry Paramonov
T +7 (495) 737 53 53
E paramonovdi@fbk.ru
Serbia

Reduced rate of 10% for example for basic foodstuffs, medicines and medical devices, natural gas or
passenger transportation.
Zero-rated goods and services include export of goods, transportation and other services related to
export, import or transit, international air and river transportation services, goods and services used
for supplying of aircrafts and ships used in international transport etc.

to these rates?
No.
Value Added Tax (VAT) is the principal indirect tax in Serbia. It is a tax on consumer expenditure, and is
Yes. It relates to turnover of taxable transactions in Serbia for the previous 12 months, and once the limit
has reached it is necessary to register.

No. There is no registration limit for businesses that are not established in Serbia. Foreign taxpayers will
need to register as soon as they start to make supply of goods and services in Serbia.

According to the latest changes in the Serbian legislation, foreign entities which make supplies of goods
and services in Serbia are obliged to appoint a tax representative. However, there are still no prescribed
penalties for non-compliance with this rule.
Most businesses are required to submit VAT returns on a monthly basis. The exceptions are businesses
which total turnover in the last 12 months have not exceeded RSD 50,000,000 (approximately EUR
410,000) and they submit VAT returns quarterly.

Serbia
Yes. Additional declarations have to be submitted in certain circumstances.

Supply of goods and services intended for:

official needs of diplomatic and consular missions

official needs of international organisations, if so provided by the international agreements

personal needs of foreign staff of diplomatic and consular missions including their family
members

personal needs of foreign staff of international organisations including their family members, if so
provided by the international agreements.

supply of goods and services in accordance with donation agreements, under prescribed conditions

supply of goods and services in accordance with credit and/or loan agreements, under certain
conditions

supply of goods and services in accordance with international agreements, under certain conditions.

Deduction of VAT
Transactions which are restricted from VAT recovery are the following:
Purchase, production and import of cars, motorcycles, yachts, boats and aircrafts, facilities for
storing these goods, fuels, spare parts and other expendables as well as renting, maintenance,
repairing and other goods and services related to the use of these goods and facilities for their
storing
entertainment expenses
expenses for meals and transport of employees and other engaged persons to and from work.

Serbia.
ie the sale.
accounting (tax) period will be the amount of VAT payable by
the business to the tax authority. Where the input tax exceeds
the output tax, a refund can be claimed.
A transaction is within the scope of Serbian VAT if the
it must be a supply of goods or services
it must be made by the taxpayer (taxpayer is the person
or entity which is registered for VAT in Serbia that is
person, including person which has not seat or place of
residence in Serbia, that makes supply of goods and services
independently in the scope of its business)
the transaction should takes place in Serbia
the transaction must be taxable supply

the transaction must be performed within the framevork of
the business activity.
services in Serbia: the standard rate of 20%, the reduced rate of
10% and the zero rate. In addition, some goods and services are
exempted from the tax. Businesses that make exempt supplies
are unable to claim all of the input tax that they incur, so the
VAT paid to suppliers will be a real cost.
Most goods imported into Serbia are subject to VAT.
and Customs duty. Customs duty is levied at the place where
goods are imported into Serbia. It is levied in order to bring the
cost of goods produced outside the country up to the same level
as those produced within it. Once duty (and VAT) has been
paid by the importer, the goods are in free circulation and they
can then be released for use in the home market. Unlike other
indirect taxes, such as VAT, once duty has been paid it is not
usually recoverable by the importer. It therefore represents a
bottom line cost to the importing business if it cannot be passed
on in higher prices. It is therefore very important to ensure that
the correct rate of duty is applied. VAT is charged on the value
of the importation, including any custom duty.
Serbia

supplies of goods or services in the course of its business must
register for VAT, from the moment when total supplies for
the previous 12 month exceeds a threshold of 8 million RSD
(approximately EUR 60,000). When calculating the threshold,
it must be considered total amount of all taxable supplies
and those exempt (with the right to deduct input tax), except
amount of supply of equipment and facilities for the business
purpose, which have been made by the taxpayer during the
previous 12 month period.
For these purposes, a person includes any entity, which
fulfils the conditions imposed by the definition of taxpayer.
A business can be also registered on a voluntary basis, even
if the registration limit has not been reached.
do not register or fails to register at the correct time. Penalties in
this case range from 100,000 RSD to 2,000,000 RSD.

The VAT registration limit does not apply to persons not
established in Serbia. The persons not established in Serbia must
register for VAT as soon as they begin their business activity in
Serbia, regardless of registration threshold.

your country?
Yes, there are three provisions related to this case:
1. In the case non-resident entity makes supply of goods
and services to non-taxable persons in Serbia, while
considerations for this supply are collected by the taxable
person on behalf and for the account of non-resident entity,
tax debtor for this supply is taxable person which collects
the consideration.
2. The tax base does not include amounts collected by the
taxable person on behalf and for the account of another
taxable person (for example non-resident supplying
electronically/digital services), if it is transferring this
amount to the person on behalf and for the account of
which the taxable person has collected the payment.
3. There is no obligation for non-established business to
appoint a fiscal representative in case this entity performs
supply of electronically services in Serbia.

An entity which makes supply of goods and services in Serbia,
but has not an established business in Serbia, is obliged to
appoint a fiscal representative. Fiscal representative will act on
behalf and for the account of this entity while complying with
the VAT rules (registering for VAT, calculation and payment of
VAT, submitting VAT return etc.).
There is no obligation for non-established business to
appoint a fiscal representative only in case this entity performs
supply the following services in Serbia:
services which are deemed to be provided electronically
services of passengers transportation by bus.

Tax period is a calendar month. For the taxpayers which total
turnover for the previous 12 month period exceeded 50 million
RSD (approximately EUR 410,000), for the tax debtors and for
the entities which begin business activity in the current year.
Tax period is a quarter for the taxpayers which total
turnover for the previous 12-month period does not exceed
50 million RSD (approximately EUR 410,000) and for the tax
debtors which are not registered for VAT.
Taxable persons shall submit VAT return and make the
related payment by the 15th of the calendar month following
the end of tax period. Exceptions are tax debtors which are
not registered for VAT, for which deadline for submission
and payment of VAT liability is 10th day of calendar month
following the end of tax period.

A wide range of penalties are imposed by the tax authority if
VAT returns are not submitted on time and/or the related VAT
liability is not calculated and/or is not paid by the due date.
Penalties range from 10% to 100% of due tax determined
during the tax control procedure, but at least from 200,000 RSD
to 500,000 RSD for legal entities.
Serbia

Additional declarations have to be submitted in the following
circumstances:
Supply of goods and services intended for:
official needs of diplomatic and consular missions,
official needs of international organisations, if so
provided by the international agreements,
personal needs of foreign staff of diplomatic and
consular missions including their family members,
personal needs of foreign staff of international
organisations including their family members, if so
provided by the international agreements.
supply of goods and services in accordance with donation
agreements, under prescribed conditions
supply of goods and services in accordance with credit and/
or loan agreements, under certain conditions
supply of goods and services in accordance with
international agreements, under certain conditions.

Yes. A range of penalties can be imposed where business do not
comply with the VAT rules.
Some of the penalty taxes are as follows:
penalties for errors and omissions on tax return 30% of
the difference between calculated VAT and amount have to
be determined in accordance with the VAT rules
penalties for not submitting additional declarations and
other prescribed documentation from 100,000 RSD to
2.000,000 RSD
penalties for not maintaining adequate records and
accounting evidences from 100,000 RSD to 2,000,000
RSD.
serious matters. For example, it could be brought for
submission of incorrect tax return in order to achieve the right
for ungrounded tax refund or tax credit.

claimed if they are not registered in Serbia?
circumstances.
The reimbursement of VAT will be performed to a foreign
taxpayer upon his request, for the supply of moveable goods
and services in the Republic of Serbia, under the following
conditions:
1. VAT for the supply of goods and services must be stated on

the invoice and the invoice must be paid
2. The amount of VAT to be reimbursed must exceed EUR
200 in dinar value at the official middle exchange rate of
National Bank of Serbia
3. The conditions, under which a taxable person is entitled
to a deduction of input tax for this goods and services, are
fulfilled
4. Foreign taxpayer does not make supply of goods and
services in Serbia, it provides only services of transportation
of goods which are exempt from VAT in accordance with
domestic rules or it provides only services of transportation
of passengers which are according to domestic rules subject
to individual taxation.
The reimbursement of VAT in these cases is provided under
reciprocity.

A VAT invoice must show the following information:
An invoice number which is unique and sequential
the place and date of issuing the invoice
the sellers name, address and tax identification number
the customers name, address and tax identification number
the time of supply (also known as tax point) and the amount
of advance payments (if any)
supplied to the customer (type of goods/services and the
quantity of goods/extent of services)
the amount of tax base
applicable tax rate
the amount of VAT charged
notification that there is no VAT payable on those goods
and services (in case of exempt supply or zero supply)
notification that billing system (charging and payment of
VAT on a cash basis) is applied
format and there is no need to tell the tax authority. Electronic
invoices must contain the same information as paper invoices.
For further information on indirect tax in Serbia please contact:
Nataa Buevac Stojkovi
T +381 (0)11 404 95 60
E natasa.bucevac@gt.co.rs
Slovakia

Reduced rate of 10% for pharmaceutical products, medical products, some books and
similar products.

to these rates?
No.
Value Added Tax (VAT) is the principal indirect tax in Slovakia. It is a tax on consumer expenditure, and is
Yes. It relates to the annual turnover of taxable transactions in the Slovakia, and once the limit has (or will
be) reached it is necessary to register.

No. There is no registration limit for businesses that are not established in Slovakia and they will need to
register as soon as they start to make taxable transactions. Different registration requirements also apply
to businesses involved with distance sales made within the European Union (EU), eg internet sales.

No, however in case of the import of goods to Slovakia from a non-EU country by foreign taxable party
where a dispatch or transport of the imported goods ends in another EU member state, the foreign
taxable person can opt a tax representative who will represent him in Slovakia.
Generally, VAT returns must be submitted on a monthly basis. There is a possibility to submit VAT return
on quarterly basis if certain circumstances are met.

Yes. If a VAT return, or the corresponding payment, is submitted late, a penalty can be imposed.
Yes. The taxpayer shall be obliged to submit a VAT ledger statement together with each VAT return
including certain information regarding the documents included. The taxpayer is also obliged to submit a
recapitulative statement (EC Sales List) for each calendar month in which he supplied goods or services
from the territory of Slovakia to another EU member state to a person identified for tax purposes in
another EU member state. Further there is obligation to submit inbound or outbound intrastate declaration
in connection with goods moving/selling/purchasing to or from the EU on monthly basis after reaching a
certain threshold.
Slovakia
Yes, penalties can be imposed for late VAT registration.


Value added tax is an indirect tax on the consumption of goods
and services and is normally borne by the ultimate consumer.
This, in general, is accomplished by imposing VAT on all stages
of manufacturing, wholesaling, retailing, etc., but allows the
supplier to offset VAT paid on his or her business expenses
against the tax payable.
In addition, VAT is paid on the import of goods into
Slovakia. A VAT-registered taxable person may recover such
VAT to the extent that it relates to an economic activity carried
on by him or her. Furthermore, a charge to VAT arises on
goods acquired by a taxable person from another EU member
state. This is commonly referred to as a tax on acquisitions also
known as intra-Community acquisition.

Registration for VAT is obligatory for all domestic taxable
persons whose turnover exceeds 49,790 for the previous
consecutive 12 calendar months. This threshold will only apply
to taxable persons with a registered seat or permanent address,
place of business, or VAT fixed establishment in Slovakia.
The domestic taxable person can also apply for the
voluntary VAT registration. In this case the domestic taxable
person shall be obliged to prove their business activities carried
out within the territory of Slovakia (for example by sending of
business plan, issued invoices and etc.). Further the domestic
taxable person can be obliged to lodge tax collateral in the
form of a cash deposit made to the account of the tax office.
There is an obligation for VAT registration if a taxable person
who is not the taxpayer acquires goods from another EUmember state within the territory of Slovakia, whereby the
total value of goods acquired from other EU-member states,
excluding the tax, exceeds 14,000 for a calendar year. Further,
if a taxable person who is not a taxpayer and has a seat, place
of business, fixed establishment or domicile in the territory of
Slovakia, supplies or receipts service from/to a foreign person
from/to another EU-member state then such taxable person
is obliged to register for VAT in Slovakia. The taxable person,
registered for such special VAT purposes, cannot be treated
as a standard VAT payer who has a right to claim input VAT
levied on goods/services purchased within territory of Slovakia.
Group VAT registration
As of 1 April 2009 there exists a possibility to ask for

VAT registration of group in Slovakia that enables taxable
persons who have their seat, place of business or VAT
fixed establishment within Slovakia and who are connected
financially, economically or organisationally, to register for
Slovak VAT as a single VAT payer.
As a result, transactions within the group are outside the
scope of VAT. The Slovak tax authorities will register a VAT
group as of 1 January of the year following that in which the
registration request is filed, provided this is done by 31 October
of that year. If the request for registration is filed after 31
October, the Slovak tax authorities will register the group for
VAT as of 1 January of the second year following that year in
which the registration request is filed.
Retroactive VAT registration
Retroactive VAT registration is possible only for taxable

person that should have registered for VAT after 1 April 2009.
In respect of deduction of input VAT taxable person which
became VAT payer can under some conditions deduct input
VAT but he should also pay output VAT from taxable supplies
that occurred before official VAT registration with
tax authorities.

Registration of foreign taxable person
For foreign taxable person a single transaction which is subject

to VAT in Slovakia, triggers the obligation to apply for VAT
registration in Slovakia and to pay VAT under the Slovak VAT
Act before commencing the business activities in Slovakia. The
VAT registration therefore may be necessary for the taxable
person without a registered seat or VAT fixed establishment in
Slovakia as a result of transferring business assets to Slovakia,
supplying goods or performing an acquisition of goods or an
import of goods here.
Slovakia
Call-off stock VAT simplification
Slovak VAT Act allows a VAT simplification for foreign

taxable entity, registered for VAT in another EU
country (other than Slovakia) who transfers their own goods
from another EU member state to a warehouse in Slovakia and
these goods will be delivered to a single VAT payer. If foreign
VAT payer meets law requirements stated in Slovak VAT Act,
he does not have to register for VAT purposes in Slovakia.
VAT liability arisen from the acquisition of goods will be paid
by a Slovak customer (single VAT payer).
Long-distance sales
A foreign taxable person that makes long-distance sales in

Slovakia to any persons, not registered for Slovak VAT,
is obliged to register for VAT purposes at tax authorities
Bratislava upon reaching a turnover of 35,000 in a calendar
year. There is also a possibility of voluntary registration before
reaching of law determined turnover. A foreign taxable person
supplying goods into Slovakia via long-distance sales to a
physical person and such goods is a subject of excise duty, must
apply for VAT registration before commencing of
such supplies.
Retroactive VAT registration
Retroactive VAT registration is possible only for taxable

person that should have registered for VAT after 1 April
2009. In respect of deduction of input VAT taxable person
which became VAT payer can under some conditions deduct
input VAT but he should also pay output VAT from taxable
supplies that occurred before official VAT registration with tax
authorities.

your country?


The import of goods to Slovakia from a non-EU country can
be VAT exempt in case a dispatch or transport of the imported
goods ends in the another EU member state. If an importer is a
foreign taxable person who is not a Slovak VAT payer, he can
opt a tax representative who will represent him in Slovakia. In
such case the foreign taxable person does not have to register
for VAT purposes in Slovakia and the tax representative applies
the exemption from VAT on import of goods.

Monthly VAT returns must be filed if annual turnover exceeds
100,000. Where turnover for the previous 12 calendar months
is less than 100,000, the VAT payer is obliged to file VAT
returns for the calendar quarter.
A VAT payer with turnover below 100,000 may opt for
submission of VAT returns on monthly basis. VAT returns
must be submitted within 25 days after the end of a tax period
and the due tax must be paid within the same time limit. A
VAT payer can file VAT returns in paper format via post or
electronically. Since 2014 each VAT payer should be obliged to
file documents with the tax authorities only in electronic format
by using of:
a guaranteed electronic signature
a written agreement on electronic delivery of documents
concluded with the VAT payer and the tax authority.
If a taxpayer is registered in Slovakia as a foreign VAT payer
or if the tax payer conducts his business activity in Slovakia
through distance selling and has zero transaction during the tax
period then there is no obligation to submit zero VAT return.
Slovakia

A system of penalties exists to discourage failure to comply with
the VAT system. Administrative penalties are generally either:
penalties
penalty interests.
Penalties and penalty interests are charged by the tax authorities
via an official decision.
Late VAT returns or payments of VAT arrears
Failure to submit VAT returns on time is subject to the penalty

between 30 and 16,000. Late payment of any VAT arrears
results in penalty interest charge to the amount of four times
the interest rate of the European Central Bank (ECB) for each
day of delay, beginning with the day following the due date
until the date of payment. If the four times ECB base rate does
not exceed 15%, the base for penalty interest will be 15%. The
tax administrator does not impose penalty interest for amounts
that do not exceed5.
Incorrect VAT returns or supplementary VAT returns
Incorrect VAT returns or errors attract penalty charges. The

penalty is charged from the positive difference between the
tax stated in the ordinary tax return and the tax stated in the
supplementary tax return or the tax stated in the tax return and
the tax identified by the relevant tax authorities.
The amount of penalty depends on the number of days of
delay (eg days of recording the lower amount of VAT in the
filled VAT return) and the applicable interest rate:
1. If an additional tax is assessed as a result of the tax audit,
an interest rate per annum representing a triple of the ECB
base interest rate (at least 10% per annum) will be used for
calculation of the penalty.
2. If a supplementary tax return is filed within 15 days from
the start of tax audit, an interest rate per annum representing
a double of the ECB base interest rate (at least 7% per
annum) will be used for calculation of the penalty.
3. If a taxable person files a supplementary tax return before
the start of tax audit, its tax honesty will be rewarded by
use of the interest rate corresponding to the base interest
rate of the ECB (at least 3% per annum) for calculation of
the penalty.
The amount of penalty can be maximum up to the amount of

the imposed tax. The tax administrator does not impose penalty
interest for amounts that do not exceed 5.

VAT ledger statement
The VAT payer is obliged to submit a VAT ledger statement

together with each VAT return. The VAT ledger statement
includes certain information regarding the documents (issued
and received invoices, credit and debit notes, cash receipts,..)
included in VAT return.
VAT ledger statement must principally contain following
information:
VAT identification number of customer/supplier
serial number of invoice
date of supply of goods or services
tax base in EUR
amount of tax in EUR
rate of tax in %.
EC sales lists
The VAT payer will be obliged to submit EC sales lists (ECLs)

in case they make:
intra-community supplies of goods from Slovakia to
another EU member state
intra-community movements of goods from Slovakia to
another EU member state
triangulation simplification as the first receiver of supplied goods
supply of services with the place of supply in another EU
member state.
The VAT payer is obliged to submit ECLs for a calendar
quarter if the value of goods does not exceed 50,000 in the
respective quarter and the four previous concurrent calendar
quarters. In case this law limit is reached, the VAT payer must
submit a monthly ECL. ECLs must be submitted no later than
within 25 days after the end of the period to which they relate.
ECLs must be filled only electronically.
Slovakia
Intrastat
Where the VAT payer imports goods from other EU member

states or delivers goods to other EU member states, they must
submit the Intrastat declaration when they reach a certain
threshold. The thresholds are separately monitored for import
of goods and export of goods. Threshold for outbound
transactions is 400,000; and for inbound transactions
200,000. Intrastat report has to be submitted on a monthly
basis. The taxpayer is obliged to submit Intrastat declaration
electronically.
Keeping of records on purchased motor vehicles
A VAT payer who will buy a used motor vehicle, registered

in EU, from a taxable person identified for VAT purposes in
another EU-member state for purposes of his further sale of
this motor vehicle, he will be obliged to keep records about
these goods. Such records must be prepared for each tax period
in which the goods (the used motor vehicle) was purchased
and they must be delivered to the tax office in the deadline
for submission of VAT return (see point 5). The records must
contain following information:
first name and last name of the seller, or the name of
the seller and address of his seat, place of business, fixed
establishment, domicile or habitual residence and VAT
number assigned in the other member state
value of the goods (vehicle)
identification number of the vehicle (VIN)
number of kilometers done
date of first put in use of the vehicle
date of invoice
date of acquisition
information whether the goods were sold with exemption
of tax or if the special tax treatment for sale of used goods
was applied due to VAT legislation valid in the EU member
state from which the vehicle will be sold.

If the taxable person does not meet the obligation to register
for VAT in given time frame, the tax authorities may impose
penalty; a minimum of 60 and a maximum of 20,000. Further
tax authority may impose a penalty for failure of records on
purchased motor vehicles on time. If the tax payer fails
deliver records on purchased motor vehicles on time or with
incorrect data than Slovak tax authority may impose penalty
up to 10,000.

claimed if they are not registered in Slovakia?
circumstances. Two schemes exist, one or businesses established
in the EU and another for businesses established elsewhere.
Businesses established in the EU
A foreign person who has a seat, place of business, fixed

establishment or domicile in another EU-member state, and
requests a tax refund through application shall be entitled to the
refund of the tax on the goods and services supplied to him by
the taxpayer within the territory of Slovakia. A foreign person
(applicant) shall be entitled to tax refund if:
the applicant is identified for tax purposes in the member
state in which he has a seat, place of business, fixed
establishment or domicile
during the period in respect of which application for tax
refund has been filed the applicant did not have a seat, place
of business, fixed establishment or domicile within the
territory of Slovakia
during the period in respect of which application for tax
refund has been filed the applicant did not supply goods or
services within the territory of Slovakia, apart from certain
limited exceptions.
The refund application must be submitted for a period of not
more than one calendar year and the amount of the tax refund
claimed shall not be less than 50. The refund application may
be submitted for a period of less than one calendar year, but not
shorter than three calendar months, provided that the amount
of the tax refund claimed is not less than 400. The refund
application is submitted via the electronic portal set up by the
EU-member state in which he has a seat, place of business, fixed
establishment or domicile and has to be made by 30 September
of the year following that in which the VAT was incurred.
Slovakia
Businesses established outside of the EU

conditions, also reclaim the VAT incurred on
imports into the Slovakia or purchases of goods and services
used in the Slovakia. A foreign person from non-EU country
(third country) has a right to claim VAT refund if:
they are not registered or liable to be registered for VAT in
the Slovakia
they are not established in any EU country
they made no supplies of goods and services in the Slovakia
comparable system of turnover taxes, unless the Slovak tax
established in the Slovakia.
A VAT application form has to be submitted to the Slovak tax
authority no later than up to 30 June of the year following that
in which the VAT was incurred. The tax refund claim must not
be less than 50.

In accordance with of Slovak VAT act, the following are
mandatory requirements to be shown on the invoice:
the full name and address of the customer
the full name of the taxable person (supplier)
VAT number of customer
VAT number of supplier
number of invoice
the date of supply of goods or services provided
the date of issue of invoice
the quantity of goods supplied
the taxable amount per rate, unit price exclusive VAT, any
discounts or rebates if they are not included in unit price
the VAT rate applied or exemption from the tax (in case
of the tax exemption, reference to the applicable provision
of EU directive or to the corresponding Slovak VAT
provision or reference in wording supply of goods or
services is exempt)
the total amount of VAT payable in euros
where appropriate, reference in wording reverse charge in
case the customer is liable for the payment of the VAT.
The VAT payer may issue a simplified invoice in

following cases:
for sales with a value 100 and less including VAT
for sales paid in cash via cash register with a value 1,000
and less including VAT
for sales paid by credit cards or other electronic
payment means via cash register with a value 1,600
and including VAT
for sales of stamps for usage of motorways where a tax
document (invoice) is a removable part of the stamp.
VAT invoices can be issued, received and stored either in
electronic either in paper format. An electronic invoice is
defined as an invoice which contains all mandatory invoicing
requirements stated above and it is received or issued in
electronic format. The selection of the electronic format is up
to the decision of the parties of the taxable transaction. It could
be a structured message, e.g. xml, or other format such as email
with a pdf attachment. The taxable person is obliged to ensure
the authenticity of origin of an invoice, the integrity of the
content of an invoice and the legibility of an invoice whether on
paper or in electronic form must be ensured from the issue until
the end of the period for storage of the invoice. In the Slovak
VAT Act is also stated the period during which every tax payer
and taxable person is obliged to archive the invoices. The basic
period for storage remains ten years following the year to
which the invoices relates.
For further information on indirect tax in the Slovakia please contact:
Ing. Martina Runkov
T +421 2 59300463
E martina.runcakova@sk.gt.com
Spain

Reduced rate of 10% for a specific list which includes, for example, substances normally used for
human and animal nutrition except alcoholic drinks, residential buildings or passenger transport.
Super-reduced rate of 4% for a specific list which includes, for example, ordinary bread, milk and
derivatives, cheeses, eggs, fruits and cereals and books.

to these rates?
No.
Value Added Tax (VAT) is the principal indirect tax in Spain. It is a tax on consumer expenditure, and is
No, in general terms there is no threshold in Spain. Taxpayers that make taxable supplies in Spain have to
register for VAT in Spain and submit periodic VAT returns.

Yes. Foreign companies not established for VAT purposes in Spain, which make taxable supplies in Spain, may
need to register in Spain (if the service is considered to be rendered in Spain or the good delivered in Spain).

In certain circumstances, a non-established person may need to appoint a fiscal representative before the
tax authority.
Most businesses are required to submit VAT returns on a quarterly basis. For large taxpayers (revenue
exceeding 6,010,121.04 in the preceding calendar year) and for taxpayers that are included in the
special registry for monthly VAT refunds, VAT returns have to be filed for a monthly period.


Taxpayers that are included in the special registry for monthly VAT refunds, also have to submit a monthly
declaration related to VAT books.
Spain
Yes. Penalties can be imposed in relation to errors or omissions.


in Spain and in other European Union (EU) countries. It is a
tax on consumption which is applied on supplies of goods or
services, intra-community acquisitions and imports.
VAT is ultimately borne by the consumer by being
included in the price paid, although the responsibility for
stage of the process rests, in general terms, with the business
making the supply.
The supplier will charge VAT (output tax) on its sales, and
incur VAT (input tax) on its purchases. The difference between
the output tax and the deductible input tax in each accounting
period will be the amount of VAT payable to the tax authority.
be claimed.
A transaction is within the scope of Spanish VAT if the
it takes place within the Spanish territory
it is made by a business or professional for valuable
consideration, either regularly or occasionally
Any business that makes taxable transactions in Spain should
be, generally, VAT registered in Spain.
services in Spain; the standard rate, the reduced rate, and the
super-reduced rate. In addition, some goods and services are
exempted from the tax. Businesses that make exempt supplies
are unable to claim all of the input tax that they incur, so the
VAT paid to suppliers will be a real cost. The most important
exemptions are (although they restrict deduction of
input VAT):
medical and social services
financial and insurance transactions
educational and sport services
lease of some kind of real state.
Most goods imported into Spain from outside the EU are

subject to VAT. The tax will have to be paid by the importer
at the time of importation. There is an import deferral regime
applicable under certain requirements. Where the importation
is for business purposes and the importer is registered for
VAT, it may be possible to reclaim the tax (subject to certain
rules). It is also important to note the interaction between
VAT and customs duty. Customs duty is levied across the EU
at the place where goods are imported into the community.
It is levied in order to bring the cost of goods produced
outside the EU up to the same level as those produced within
it. Once duty (and VAT) has been paid by the importer, the
goods are in free circulation and they can then be released
for use in the home market. Unlike other indirect taxes, such
as VAT, once duty has been paid it is not usually recoverable
by the importer. It therefore represents a bottom line cost
to the importing business if it cannot be passed on in higher
prices. It is therefore very important to ensure that the correct
rate of duty is applied. VAT is charged on the value of the
importation, including any custom duty.

Any business or professionals that make taxable supplies in
Spain would have to register for VAT in Spain and
submit periodic returns. In general, there is no threshold for
VAT registration in Spain. If two or more entities form part of
a group, all of them are established within Spain and are linked
to each other by financial, economic and organisational orders,
they could apply the special regime for group of entities. In
this sense, it is deemed as group of entities the one formed by a
parent company and its subsidiaries.
In this sense, it is considered a parent company the one
meeting the following conditions:
it has its own legal personality, also
permanent establishments
it has the control over the others through a direct or indirect
participation of over 50% in the capital or voting rights of
them and this participation remains during a calendar year
it is not a subsidiary of any other entity established in Spain
that could be also considered as a parent company in itself.
Spain

one VAT group at a time. The main advantage of being part of
a VAT group is the offsetting of individual self-assessments of
the entities within the group. The parent company shall make
the payment or receive the refund of the aggregate balances.
However, each entity constituting the VAT group is jointly and
severally liable for the VAT due by the VAT group. The option
to apply the special regimen for group of entities is binding for
three years (if the requirements continue to be met).

Regarding non-established businesses in Spain, a VAT
registration limit does not exist. Foreign companies, not
established for VAT purposes in Spain, that intend to make
taxable supplies in Spain may need to register (this obligation
may apply to businesses that supply goods or services deemed
rendered in Spain). Registration for VAT in Spain may also be
required where a non-established EU business is involved with
distance selling.
EU country who is not liable to be registered for VAT, as
private individuals. The common examples of distance sales are
goods supplied by mail order and via internet.
Each EU country has the option of applying a distance selling
threshold of either 35,000 or 100,000 per calendar year, or
the equivalent in its own currency. Spain has adopted an annual
threshold of 35,000. Distance sales from another EU country
to non-taxable persons in Spain will be subject to VAT at the
appropriate rate in the suppliers country. However, once the value
of those distance sales to Spain exceeds the Spanish threshold:
the supplier becomes liable to register for VAT in Spain
Spain becomes the place of supply
any further sales to customers in the Spain are subject to
Spanish VAT.
Even if the threshold is not exceeded, the supplier can opt to waive
the threshold rule. The option is binding for two calendar years.


in your country?
Where these services are supplied to customers that are not
businesses, the services will be taxed in the Member State in
which the customer is established, has his permanent address or
usually resides.
As a consequence, two optional special regimes are
established (for suppliers outside and inside the EU). This will
allow them to avoid being registered in each Member State in
which the transactions are made.

VAT returns are normally prepared on quarterly basis. They
are due for submission within 20 days after the quarter end.
For large taxpayers (revenue exceeding 6,010,121.04 in the
preceding calendar year) and for taxpayers that are included
in the special registry for monthly VAT refunds, VAT
returns must be filed for a monthly period. They are due for
submission within 20 days after the period end.
Annual summary returns must be submitted by 30 January
of the following calendar year.

If a VAT return is not submitted on time or the related tax
is not paid by the due date, the tax authority may impose
penalties or surcharges to the taxpayer. Late submission or
payments without a request from the tax authority are subject
to a surcharge of 5%, 10% or 15% when the payment is made
within three, six or 12 months of the deadline respectively.
When the payment is made after 12 months of the deadline
a surcharge of 20% plus delay interest is applicable. Late
submission or payments after a request from the tax authority
are subject to fines of between 50 and 150%, plus interest.
However, if the penalty is not disputed by the taxpayer and
the payment of the penalty is made within the deadline, a 25%
reduction of the penalty applies.
In general terms, non-established businesses in Spain do need to

appoint a fiscal representative and to inform the tax authority,
before starting taxable transactions in Spain. This obligation will
not apply to taxable persons established in other EU country.
Spain

Businesses that make supplies or acquisitions of goods or
services to traders registered for VAT in other EU
countries are required to submit the recapitulative statement
of intra-community operations. This statement will have to be
submitted on monthly basis. However, if the volume of Intracommunity supplies of goods does not exceed 50,000, the
statement will have to be submitted on quarterly basis.
This statement could be also submitted annually in
dispatched or arriving from other EU country is above an
annual threshold (400,000 as from 2015), Intrastat declaration
has to be submitted for either or both. These declarations have
to be submitted on a monthly basis.
Companies that are included in a special regime for monthly
returns, have also to submit a monthly declaration
related to VAT books. This declaration includes information
about all the issued and received invoices during each period.

Yes. Penalties could be imposed where businesses do not
comply with the VAT rules. Penalties can be applied for errors
and omissions made on tax returns, or where the tax is paid
late. Penalties can also be applied where the business has failed
to maintain adequate records, provide information (including
in requests from the tax authority) or when a VAT refund is
claimed improperly. Criminal proceedings may be brought in
the case of more serious matters.

claimed if they are not registered in Spain?
circumstances. Two schemes exist, one for businesses established
in the EU and another for businesses established elsewhere.
place of business or other residence there involved in the
supply of goods or services performed during the period
covered by the claim
is submitted electronically to the tax authority from whom
the repayment is being sought. The refund period must cover
a quarter or a calendar year or a shorter period where it
represents the reminder of a calendar year. The claim has to be
made by 30 September of the year following that in which the
VAT was incurred.
Spain

into Spain or purchases of goods and services where Spanish
VAT has been charged. The scheme is available to any person
carrying on a business established outside the EU, provided
that in the period of the claim:
they were not registered or liable to be registered for
VAT in Spain
they made no supplies of goods and services in Spain other
they are not the addresser of supplies of goods and services
where reverse charge is applicable
they comply with the requirements and limitations for
deducting VAT
they are established in a third country that provides
persons established in Spain. Spain has arranged reciprocal
agreements with Canada, Israel, Japan, Monaco, Norway
and Switzerland; this agreements states specific operations
in which VAT could be claimed back
As of the 1st January 2015, reciprocal agreements are not
required for claiming the VAT borne on the imports or
acquisitions of the following goods or services:
1. Molds and equipment to be used for fabricating goods
to be exported to the non-established business or
professional or destroyed
2. Access to services, hotels, restaurants and transport
linked to the attendance to fairs, conferences and
exhibitions of commercial or professional nature.
The claim is also submitted electronically and must cover
a quarter or a calendar year or a shorter period where it
represents the reminder of a calendar year. The claim has to be
made by 30 September of the year following that in which the
VAT was incurred.

the invoice date
VAT rate applied
the total amount of VAT charged expressed in euros.
For each different type of item listed on the invoice, it must be
shown separately its corresponding taxable base. Where a VAT
invoice includes exempt goods or services, it must specifically
state the applicable articles of the Spanish legislation or the EU
Directive, or a mention of that the operation is exempt. Where a
VAT invoice includes certain operations as those where reverse
charge rule applies, special regime for travel agencies or special
regime for artworks, this must be mentioned on the invoices.
Where a business makes sales of goods or services not
exceeding 400, a simplified VAT invoice can be issued.
Simplified VAT invoices could be also issued in certain
operations where the value does not exceed 3,000 euros. VAT
invoices can be issued, received and stored in electronic format.
For further information on indirect tax in Spain please contact:
Lourdes Daz-Barcel
T +34 91 576 39 99
E lourdes.diaz-barcelo@es.gt.com
Spain
Sweden

Reduced rate of 12% for food stuff, hotel, restaurant and catering services.
Reduced rate of 6% for books and printed matter, concerts and performances at cinemas (cinemas
25% as of January 1, 2017), theatres, operas, sporting activities, animal parks and passenger transport.

to these rates?
Yes. Cinemas form 6% to 25% and minor repairs from 25% to 12% as of January 1, 2017.
Value Added Tax (VAT) is the principal indirect tax in Sweden. It is a tax on consumer expenditure, and is
Currently no. However, pending discussions and a threshold of SEK 30,000 might be introduced as of
January 1, 2017.

Yes. They will need to register as soon as they start to make a taxable transaction for which they are
liable for to Swedish VAT. Different registration requirements apply to businesses involved with distance
sales made within the European Union (EU) e.g. mail order and internet sales.

In certain circumstances businesses outside The EU must appoint a tax agent. The tax agent must be
approved by the tax authorities.
Most businesses are required to submit VAT returns covering three month accounting periods. However,
returns must be submitted on a monthly basis if your turnover in Sweden exceeds SEK 40,000,000.

Yes. If a VAT return, or the corresponding payment, is submitted late a penalty fee will be imposed. Late
payment will render an interest cost.

Sweden

Sweden and in other European Union (EU) countries.
i.e. the sale.
output tax, a refund will be credited to your tax account and
later on repaid to your business.
A transaction is within the scope of Swedish VAT if the
supply is not defined in the legislation, it has a
broad interpretation
it takes place in Sweden
Sweden, or has a liability to become registered
services in Sweden; the standard rate 25%, the reduced rate of
12% and the reduced rate of 6%. In addition, some goods and
services are exempted from the tax.
Businesses that make exempt supplies are normally unable
to claim the input tax that they incur related to the exempt
supply, so the VAT paid to suppliers will be a real cost.
Most goods imported into Sweden from outside the
EU are subject to VAT. The tax will have to be reported by
the importer in connection with the importation. Where
the importation is for business purposes and the importer
is registered for VAT, it may be possible to reclaim the tax
(subject to certain rules). Since January 2015, the import VAT
should be reported in the VAT return to the Swedish tax
agency. This was earlier reported to Swedish Customs.

very important to ensure that the correct rate of duty is applied
and that it is only the importer that can report the import VAT
as input VAT. VAT is charged on the value of the importation,

business must register for VAT there are no limits. However,
the Swedish Ministry of Finance has recently suggested to
introduce a registration threshold of SEK 30,000, which might
be introduced as of January 1, 2017.
Two or more corporate bodies in the financial and/or
insurance sector, or companies in an agency relationship for
income tax purposes can be registered together as a VAT group
if they belong to the same group of companies.
The main advantage of VAT group registration is that
any supply of VAT liable goods or services (for example
administration and IT) by a member of the group to another
member of the group is disregarded for VAT purposes. This
reduces the VAT costs in the group.
Sweden


There is currently no VAT registration limit concerning

businesses who are not established in Sweden (threshold might
be introduced as of January 1, 2017 see comments above).
Non-established businesses will need to register for VAT as
soon as they commence trading in Sweden and provide supplies
subject to local Swedish VAT for which the foreign company
should report the VAT amount to the Swedish Tax Agency i.e.
if the local reverse-charge mechanism cannot be applied.
Registration for VAT in Sweden may also be required where
country supplies and delivers goods to a customer in another EU
country who is basically not registered or liable to be registered
for VAT. Such customers are known as non-taxable persons, and
include private individuals and businesses and other organisations
that are not registered for VAT for example that they are exempt
from having to register due to the nature of their activities). The
order and via the Internet.
selling threshold of 35,000 EUR or the equivalent in its own
currency. In Sweden the threshold is SEK 320,000.
persons in Sweden will be subject to VAT at the appropriate
distance sales to Sweden exceeds the Swedish threshold of
SEK 320,000:
the supplier becomes liable to register for VAT in Sweden
Sweden becomes the place of supply
any further sales to customers in Sweden are subject to
Swedish VAT.
The tax authority in Sweden may direct a person to appoint a

VAT agent to act on his behalf for VAT purposes where the
person:
goods in Sweden from one or more other EU countries
in Sweden
country (or part of such a country) and where it appears
to the Swedish tax authority that there is no provision for
mutual assistance similar to that which provided between
Sweden and other EU countries.
Suppliers can choose to make Sweden the place where the


non-resident supplies of electronically supplied/
in your country?
Identification.
Sweden

The option to report VAT in the income tax return is abolished.
Instead, reporting is to be done in a VAT return.
The accounting period is a calendar month if the taxable
amount, excluding intra-EU acquisitions and imports, is
estimated to exceed SEK 40 million for the tax year.
The accounting period is three months (a calendar quarter)
if the taxable basis excluding intra-EU acquisitions and imports
is estimated to a maximum of SEK 40 million for the tax year.
The accounting period is an entire tax year if the taxable
basis, excluding intra-EU acquisitions and imports, is estimated
to exceed SEK 1 million for the tax year.
If you so request, the Swedish tax agency shall decide that
the accounting period should be one calendar month instead of
a calendar quarter. If the accounting period should be an entire
tax year, you may request to be allowed to report VAT once
per calendar month or once per calendar quarter. Normally,
such a decision will apply for at least 24 consecutive calendar
months. If there are special reasons, the Swedish tax agency
shall decide that you must report VAT every calendar month or
calendar quarter without your having requested this.

A default surcharge penalty of SEK 625 will be imposed by
the tax authority if VAT returns are not submitted on time. If
the related tax is not paid by the due date the tax authority will
charge you interest.

Businesses that are registered for VAT in Sweden, and make
of the goods and services. Goods are to be submitted monthly
and services quarterly. There are exemptions. Late filing fee is
SEK 1,250.

Yes. A penalty of maximal 20 % of the not reported/wrongly
reported VAT will be applied. There are no penalties for late
payment of the tax, but the applicable interest rate could be
quite high in certain cases.
serious matters. However, criminal proceedings cannot be
combined with the above penalty (so called double punishment
is not allowed).

claimed if they are not registered in Sweden?
must have no fixed establishment from which: VAT liable
transactions are performed (ECJ C 318/11 och C 319/11
Daimler and Widex A/S 2012-10-25), seat of economic
activity, place of business or other residence
was incurred.
into Sweden purchases of goods and services used in Sweden.
The following conditions must be fulfilled for the VAT to
be refunded:
VAT must be on the purchase (acquisition) or import of
goods or services for the business in countries other than
Sweden
the supply would have been subject to VAT, or would have
entailed the right to a refund if it had taken place in Sweden
if the supply takes place in another EU country then it is
subject to VAT or entitles the taxpayer to a refund in that
country
As a foreign entrepreneur, a VAT refund can be obtained
for goods or services that are supplied in Sweden when a
VAT-registered buyer is tax-liable for the turnover (known
as reversed charge).
Sweden
Taxpayers are not entitled to repayment if the Swedish VAT

regulations prohibit deduction. In Sweden, there are limitations
on the right to deductions for, among other things, cars and
business entertainment. A travel agency business is not entitled to
a refund for goods and services that directly benefit the traveler,
such as hotel rooms, restaurants services and personal transport
when the tour operators margin scheme rules are applied.
The claim period in Sweden is from 1 July to 30 June each
year. Claim forms have to be submitted to the Swedish tax
authority no later than six months after the end of the relevant
designated calendar year.
Where a business makes a sale of goods or services within

Sweden for SEK 4,000 or less including VAT, a simplified VAT
For further information on indirect tax in Sweden please contact:

Adrian Bussmeier
T +46 (0) 72 546 68 67
E adrian.bussmeier@se.gt.com

the invoice date
applied VAT rates
total amount payable, excluded VAT, for each applied
VAT rate
The unit price or rate, excluding VAT.
the total amount of VAT charged expressed in SEK
(as a main rule).
Where a VAT invoice includes exempt supplies or when the
reverse-charge mechanism is applied, it must:
or services
reference indicating why VAT is not charged
the reference omvnd betalningsskyldighet or reversecharge when the revers-charge mechanism is applied
Sweden
Switzerland
Standard rate of 8% applicable to all supplies of goods and services not explicitly subject to the
reduced rate or the special rate.
Reduced rate of 2.5% applicable, inter alia, to foodstuff and non-alcoholic beverages, water in
conduits, news-papers, books, medicine, etc.
Special rate of 3.8% applicable to hotel and similar accommodation.

to these rates?
The rates are generally valid until 31 December 2017.
Value Added Tax (VAT) is the principal indirect tax in Switzerland. It is a tax on consumer expenditure which
Yes. It relates to the annual turnover of taxable transactions in Switzerland, and once the limit has (or will
be) reached it is necessary to register.

Yes. There is generally the same registration limit for businesses that are not established in Switzerland.

Yes, a non-established person will be required to appoint a fiscal representative in order to be able to
register for VAT purposes in Switzerland.
VAT returns are generally to be submitted on a quarterly basis. If certain conditions are met, returns can
also be submitted on a monthly basis or semi-annual.

Generally, no penalties are imposed if a VAT return is submitted late. However, interest for late payment
(currently 4% p.a.) will be levied on late payment on the VAT amount due.
The submission of an additional annual reconciliation VAT return is required in case deviations, between
the VAT returns submitted and the annual financial statements, are detected.
Penalties may generally be imposed in the case of negligent tax evasion, unjustified exoneration or refund.

Switzerland

VAT is a turnover tax levied at each stage of the production
and distribution. Liability for VAT rests with the person
supplying the taxable goods or services or importing goods into
Switzerland. However, the supplier is allowed to deduct from
his VAT liability on sales made the amount of VAT paid and
properly invoiced to him in relation to purchases effected by
him, or VAT paid by him at importation. The actual burden of
the tax is therefore borne by the final consumer.
Swiss VAT (MWST / Mehrwertsteuer) is levied on taxable
supplies which take place in Switzerland, self-supplies,
acquisition of certain services from foreign entrepreneurs and
importation of goods. For VAT purposes, the Principality of
Liechtenstein is part of the Swiss territory. VAT is collected by
the Swiss Federal tax administration.
A transaction is within the scope of Swiss VAT if the
the place of supply is considered to take place
in Switzerland
it is made by, or under certain circumstances, received by
a taxable person. For these purposes, a taxable person is a
person or entity who is registered for VAT in Switzerland,
or has a liability to become registered.
services in Switzerland; the standard rate, the reduced rate
and the special rate. In addition, some goods and services are
exempted from VAT.
Exemptions without the right to deduct input tax include,
inter alia, hospital and medical treatments, services supplied
by social services, welfare institutions and social security
institutions, child and youth education, schooling, job
education etc., cultural services and sports events, insurance
transactions, certain banking transactions, transfer and letting of
real estate (with exceptions), operations connected with betting
and other games of chance involving money, etc.
The supplier of exempt services or deliveries may opt for
taxation. Please note that an option is not possible for financial
and insurance services. In certain cases, option is only possible
if the customer is a taxable person.
VAT borne by a taxable person on the purchase and

importation of goods and services which are connected to
taxable operations (also if zero rated) or to operations located
abroad which would be taxable if located within Switzerland
can be deducted/refunded. A proper VAT invoice and, in case
of importation, original import documents are required. VAT
on the acquisition of goods and services directly affected to
exempt activities, on operations which are not commercially
justified (for instance entertainment expenses) or on private
activities is not deductible.
As a general rule, VAT is payable to the customs at the time
of importation. However, taxpayers who have given security
for the tax amount may pay import VAT within 60 days based
on the invoice issued by the Federal Customs Administration.

Any person running a business is basically liable to VAT
irrespective of the realisation of a turnover. Thus tax liability
is not depending on the realisation of a taxable turnover. Swiss
VAT law allows for an exemption from tax liability if the
taxable turnover is below CHF 100,000. Each enterprise will be
able to explicitly abstain from the afore mentioned exemption
and therefore become tax liable. The limit is CHF 150,000 for
sport or culture clubs (if they do not strive to make profit and
are managed in an honorary capacity) and for institutions of
public interest.
Companies, partnerships and individuals having their
domicile or permanent establishment in Switzerland (not in the
Principality of Liechtenstein) and who are closely related to
each other, may request to be treated as a fiscal unity for VAT
purposes, with one single VAT number. As a consequence,
intra-group supplies are not taxable.
Any person whose domicile, registered office or permanent
establishment is located in Switzerland, has to pay VAT on
certain services (or under certain circumstances also delivery
of goods) provided by foreign entrepreneurs who are not
registered for VAT purposes in Switzerland, if the value of
such services exceeds CHF 10,000 during the calendar year.
Please note that for already registered persons, no threshold
is applicable, i.e. these persons will have to pay VAT on any
import of services/goods acquired from a not registered
foreign person.
Switzerland

Non-resident entities supplying goods or services within
Switzerland are generally subject to the same registration rules.
However, foreign entities supplying on Swiss territory only
services which are subject to service import tax (i.e. services
taxable at the place of the domestic recipient, excluding
telecommunication services or electrical services provided to
non taxable recipients) are not obliged to register for Swiss VAT
purposes and the reverse charge treatment will be applicable.
In case of registration, the foreign firm must designate a
fiscal representative in Switzerland and provide guarantees
(usually a bank guarantee) to the Federal Tax Administration in
respect of likely tax debts.

your country?
Based on Swiss tax law a non-established business, which
provides services in Switzerland exclusively subject to the
service import tax (reverse-charge-mechanism), is generally not
liable to register for Swiss VAT. However, a non-established
business, which provides telecommunication services and
electronic services to non-taxable Swiss resident persons,
must register for Swiss VAT once the limit of CHF 100,000
of taxable transactions has (or will be) reached. Whether the
recipient of the telecommunication services and electronic
services is a taxable or a non-taxable person has to be cleared
by the supplier. If the non-established business, which is not
registered for VAT in Switzerland, provides telecommunication
services and electronic services to taxable Swiss resident
persons, the recipients of the services should apply the reversecharge-mechanism. Once the non-established business is
registered for VAT in Switzerland it must charge Swiss VAT on
its telecommunication services and electronic services to Swiss
resident persons irrespective whether they are taxable or nontaxable persons.


The VAT returns generally have to be filed on a quarterly basis.
The VAT return must be filed and the corresponding payment
made within 60 days after the accounting period. However, for
small businesses, the tax period is semi-annual. In certain cases,
the tax period is monthly. Late payments are subject to interest,
at the rate of currently 4% p.a.

In case of intentional or negligent tax evasion, unjustified
exoneration or refund, the taxpayer is punished by a fine up
to five times the amount of the unlawful advantage. Persons
jeopardizing the levy of the tax (for instance by not fulfilling
the duty to register) are punished by a fine up to CHF 800,000
(doubled in severe circumstances) or can be prosecuted
according to the Swiss Penal Code or the Federal Act on
Administrative Penal Law.

At the end of the business year, a turnover and input VAT
reconciliation must be made. In case deviations between the
VAT returns filed and the annual financial statements are
detected, the entity is obliged to submit an additional annual
reconciliation VAT return until 31 August of the following year.

Penalties may generally be imposed in the case of negligent tax
evasion, unjustified exoneration or refund.

claimed if they are not registered in Switzerland?
Foreign taxable persons who are not established in Switzerland
and who do not supply taxable goods or services on the Swiss
territory may, under certain conditions, claim refund of Swiss
VAT incurred on their business costs. The claim can be made
once a year and must be filed by a Swiss fiscal representative
within a period of six months following the end of the calendar
year in which the goods and services were bought. There is no
refund if the annual amount does not reach CHF 500.
Yes, a non-established person will be required to appoint a

fiscal representative in order to be able to register for VAT
purposes in Switzerland.
Switzerland

The seller of the service/goods must produce an invoice to the
recipient on request. This invoice must clearly identify provider
and recipient as well as the kind of the service provided or
good(s) supplied.
Invoices or other accounting documents for taxable
recipients as well as for recipients with residence abroad (which
are entitled to VAT recovery) should generally include the
following:
the sellers VAT registration number (eg CHE-xxx.xxx.xxx
MWST)
the time or period of supply if this is different from the
invoice date
the invoice amount (must not be in CHF)
the applicable VAT rate.
Electronic invoices must comply with the requirements
regarding proof of origin and integrity. Therefore, e-invoices
must include a digital signature by a certified provider.
For further information on indirect tax in Switzerland please contact:
Dr. Matthias Hofer
T +41 43 960 71 43
E matthias.hofer@ch.gt.com
Turkey

Reduced rate of 8% for some goods and services including basic food stuffs, books and similar
publications.
Minimum rate is 1% goods and services include agricultural products such as raw cotton, dried
hazelnuts.

to these rates?
No.
Value Added Tax (VAT) is the principal indirect tax. It is a tax on consumer expenditure, and is collected on
business transactions and imports.
No. According to the VAT Law, without any exceptions, all taxpayers that make a transaction subject to
VAT are responsible.

No. There is no registration limit for businesses that are not established in Turkey and they will need to
register as soon as they start to make taxable transactions.

Yes. To register as a taxpayer, a non-established person needs to appoint a fiscal representative.
Most businesses are required to submit VAT returns covering one month accounting periods.

Yes. If a VAT return, or the corresponding payment, is submitted late a penalty will be imposed.
Yes. Additional declarations have to be submitted in respect of certain supplies made to customers that
need to be reverse charged or are subject to withholding VAT.

Deduction of VAT
In some cases you cannot deduct the VAT. For example, VAT in purchases of cars, missing and stolen
stocks.
Turkey
In Turkey, there are several indirect taxes but the most

important indirect tax is VAT.
The beginning of the studies on VAT in Turkey goes
back to 1970. In 1974, a draft VAT law, which was the result
of studies of a technical group, was prepared. The subject
(VAT) was discussed by different levels of public opinion and
some project games were organised to test the drafts with the
volunteer enterprises. After the appreciation of the results of
these discussion and games, seven law drafts were prepared
from 1974-1984. The 8th draft was enacted on 2 November
1984 and entered into force on 1 January 1985. By the VAT
Law, eight indirect taxes on consumption were abolished.
The Turkish tax system levies VAT on the supply and the
importation of goods and services. The Turkish name for VAT
is Katma Deer Vergisi, abbreviated to KDV.
VAT taxpayers are defined in the VAT Law as those engaged in

taxable transactions, irrespective of their legal status or nature
and their position with regard to other taxes.
The following people or entities are liable for VAT:
those supplying goods and services
those importing goods or services
those required to complete customs formalities in case of
transit of goods through Turkey
general directorates of postal services (PT and Telecom) and
radio and television corporations
organisers of any kind of chance and gambling
organisers of shows, concerts and sporting events with
the participation of professional artists and professional
sportsmen
lessors of goods and rights stated in Article 70 of the
Income Tax Law
applicants for optional tax liability.
Liability for VAT arises when:

a) a person or entity performs commercial, industrial,
agricultural or independent professional activities within
Turkey
b) goods or services are imported into Turkey.
VAT is levied at each stage of the production and the
distribution process. Although, liability for the tax levies on
the person who supplies or imports goods or services, the real
VAT burden is on the final consumer. This result is achieved
by a tax- credit method where the computation of the VAT
liability is based on the difference between the VAT liability of
a person on his sales (output VAT) and the amount of VAT he
has already paid on his purchases (input VAT).
The Turkish VAT system employs multiple rates and the
Council of Ministers is authorised to change the VAT rates
within certain limits.
Goods and rights are set out in Article 70 of the PIT Law
including; immovable property such as land, buildings, mines
and rights which are in the nature of immovable property;
and other goods and rights such as all kinds of motor vehicles,
machines and equipment, ships, literary, artistic and commercial
copyrights, commercial or industrial know-how, patents,
trademarks, licenses and similar intangible properties and rights.

In the event that the taxpayer is not resident or does not have
a place of business in Turkey, a legal head office or place of
management in Turkey, or in other cases deemed necessary,
the Ministry of Finance is authorised to hold any one of the
people involved in a taxable transaction responsible for the
payment of tax.
According to the Turkish VAT law, there is a so-called
reverse charge VAT mechanism, which requires the calculation
of VAT by resident companies over payments to abroad. Under
this mechanism, VAT is calculated and paid to the related tax
office by the Turkish company or customers on behalf of the
non-resident company (foreign company). On the other hand,
the local company treats this VAT as input VAT and offsets it
in the same month.
Turkey
Toll-manufacturing and ready-made materials (textiles) are

subject to partial withholding: Only 5/10 of the calculated VAT
is paid to the seller by the purchaser. Therefore, the purchaser
will be responsible for paying 5/10 of calculated VAT to the tax
office directly.
Junk metal, waste paper, junk plastic material deliveries are
exempted from VAT: In the case of the renouncement of the
above mentioned exemption, the purchaser pays 5/10 of the
calculated VAT to the seller. Therefore, the purchaser will be
responsible for paying 5/10 of the calculated VAT to the tax
office directly.

your country?
No specific legislation. However, the electronically supplied/
digital services may be due a reverse charge VAT and possibly
withholding tax (WHT). If the company buys digital services
to resell them without alterations or they buy digital services
for its own use, WHT will not be due. If the company buys the
digital services with the intention of alteration, duplication and
reselling, then it will be due WHT.
Limited liability company
It is a company established with at least one shareholder (real

person or legal entity) and the liability of the shareholders is
limited to the subscribed capital and paid by the shareholder. A
minimum capital of TRY 10,000 is mandatory.
Commandite company
It is the company established to operate a commercial

enterprise under a trade name. Whereas the liability of some
shareholders is limited to the capital subscribed and paid by the
shareholder (commanditer), for some shareholders there is no
limitation of liability. Legal entities can only be commanditer.
No minimum capital is required. The rights and obligations of
the shareholders are determined by the articles of association.
Collective company
It is the company established to operate a commercial

enterprise under a trade name and, the liability of none of
the shareholders is limited only to the capital subscribed and
paid by the shareholder. No minimum capital is required. It is
mandatory that all the shareholders be real persons. The rights
and obligations of the shareholders are determined by the
articles of association.

Yes, to register you need to establish a company based
in Turkey, to do this you also need to appoint a fiscal
representative.
Types of companies
Incorporated companies such as a:

Joint-stock company (A..)
Limited liability company (Ltd. ti.)
Commandite company
Collective company
Cooperative company
Joint stock company
The companys stock capital is divided into shares and the

liability of the shareholders is limited to the subscribed capital
and paid by the shareholder. At least one shareholder (real
person or legal entity) and a minimum capital of TRY 50,000
are mandatory. The mandatory company shall include a general
assembly and a board of directors.
The declaration consists of VAT arising from sales and

purchases in a month. The deadline for this declaration is the
24th of the following month. The deadline for the payment is,
on 26th the following month (two days later than the deadline
of the declaration).
end of the relevant accounting period, together with any tax
due.

A default surcharge penalty will be imposed by the tax
For a late submission of the declaration, it will be
considered a first degree irregularity. If the declaration is
submitted late and a VAT payment is due, it will be considered
as a first degree irregularity as well as a tax loss. If the
declaration is submitted on time, but the VAT paid late, the
VAT will be due a late payment penalty.
Turkey
Businesses that are required to file VAT declarations must also

fill in forms of BA-BS (declarations for buying and selling totals
over TRY 5000). This is for the tax office to conduct a crossexamination between sellers and buyers to check if each side is
correctly declaring its transactions.

the sellers TAX registration number
the invoice date
the total amount of VAT charged expressed in TRY.

serious matters.

claimed if they are not registered in Turkey?
No. In Turkey exports are not due VAT. The goods are taxed
at point of destination. The only way in which a company
which is not registered in Turkey to incur VAT would be if
this company buys goods from a Turkish registered company
and sells those goods directly to another company in Turkey.
This way, the destination of the goods will be in Turkey. Thus
as a result, the company that sells the goods to non-registered
overseas business must issue the invoice with VAT. However,
the overseas business cannot claim this VAT back. In case, this
company is registered in Turkey, it faces VAT when buying
goods in Turkey, but if it exports these goods it must issue the
invoice without VAT. But this way, it has the possibility to
claim the VAT it endured when acquiring the goods in Turkey.

services, it must:
or services
state clearly the corresponding Law article that the good is
VAT exempt for.
For further information on indirect tax in the Turkey please contact:
Yasar Emin Taylan
T +90 212 3730000
E emin.taylan@gtturkey.com
Ukraine
The standard rate is 20%.

7% rate applies to supply on the customs territory of Ukraine and to importation into the customs
territory of Ukraine of drugs listed in State register, medical devices listed in the register of the
Cabinet Ministers of Ukraine.
0% rate applies to exportation of goods under the customs regime of export, re-export, free trade,
free customs zones etc.

to these rates?
No.
Value Added Tax (VAT) is the principal indirect tax in Ukraine. It is a tax on consumer expenditures, and is
collected on business transactions and imports. VAT is charged on the final consumption of certain goods
and services in the home market but is collected at every stage of production and distribution.
Yes. It relates to the annual turnover of taxable transactions in Ukraine in the amount of UAH 1,000,000
(excluding VAT), and once the limit has (or will be) reached it is necessary to register.

In accordance with Ukrainian legislation a non-resident can be registered as a taxpayer in Ukraine only if
such non-resident registers a permanent establishment. The registration annual limit of UAH 1,000,000
taxable transactions applies to permanent establishments.

A non-established business does not need to appoint a fiscal representative in order to register.
Most businesses are required to submit VAT returns on a monthly basis. Some businesses can submit
VAT returns covering three month accounting periods.

Yes. Penalties apply in the case of the late VAT return submission. If the taxpayer has already been fined in
this tax period, the amount of fines increases.
In addition to VAT declarations businesses must provide customs declarations for imported goods.
Ukraine
Yes. Penalties can be imposed for the tax understatement and for the budget compensation overstatement.

No. VAT incurred by overseas businesses cannot be claimed if they are not registered in Ukraine.
Deduction of VAT
In some cases VAT amounts paid to the suppliers of goods, work or services become income tax
deductible expenses (for example, if they are used for VAT exempted transactions).

Value Added Tax (VAT) is the principal indirect tax in Ukraine.
VAT is a state tax and is payable to the state budget of Ukraine.
It is a tax on consumer expenditures, and is collected on
business transactions and imports. VAT is charged on the final
but is levied at every stage of production and distribution. The
person who supplies or imports the taxable goods or services
into Ukraine is responsible for submitting VAT returns.
Although VAT is eventually paid by the consumer by being
included into the price, the liability for charging, collecting and
paying it to the tax authorities at each stage of the process is on
the business making the supply, ie the sale. Therefore, the actual
burden of the tax is on the final consumer.
Taxpayers are Ukrainian companies, foreign companies and
entrepreneurs. The taxable item is the taxpayers transactions for:
supply of goods (services), located within the customs
territory of Ukraine
import (export) of goods into (outside) the customs
territory of Ukraine
supply of services for international passenger, luggage and
cargo carriage.
Ukraine is regarded to be the place of supply of services in
cases where the purchaser of such works and services is VAT
registered on the territory of Ukraine. This rule applies to:
provision of intellectual property rights
advertising, advisory, engineering, legal (incl. advocate
services), accounting, auditing, actuarial services, data
processing services and providing information or other
information sphere services
staff provision
leasing
telecommunication services
radio and television broadcasting
certain types of intermediary services
freight forwarding services.
The Ukrainian tax code determines goods, works and services
that are 20%, 7%, 0%-rated, not subjected to taxation or
exempted from VAT.
The tax reporting period of VAT is one calendar month; in

some cases, it is a calendar quarter.
Basically, VAT that was paid to suppliers of goods, work
or services will be offset if such goods, work and services were
used in the operating activity of the company who pays VAT.
In some cases VAT amounts paid to the suppliers of goods,
work or services become income tax deductible expenses (for
example, if they are used for VAT exempted transactions).
A business registered as a taxpayer will charge VAT (output
(including any import VAT paid). The difference between the
output tax and the deductible input tax in each accounting
period will be the amount of VAT payable by the business
to the tax authority. If the input tax exceeds the output tax,
a refund can be claimed. Most goods that are imported into
Ukraine from other countries are VAT taxable. The tax should
be paid by the importer at the time of the border crossing.
There is a strong correlation between VAT and Customs
duty. Customs duty is levied at the place where goods are
imported into the country. After duty and VAT are paid by the
importer, the goods can be released for use in the home market.
VAT is charged on the customs value of the imported goods.

If the total annual amount of taxable transactions of a person
exceeds UAH 1,000,000 (excluding VAT) then they must
register as a taxpayer by the tax authorities at its location.
A person can be voluntary registered as a taxpayer even if
the registration limit has not been exceeded.
If a person that is not registered as a taxpayer, imports
taxable goods into the territory of Ukraine, they shall pay
the tax at the time of customs clearance of goods without
registering as a taxpayer.
Group registration does not apply in Ukraine.
A penalty may be imposed by tax authorities, if a business
fails to register within the prescribed time frame.
Ukraine

In accordance with Ukrainian legislation a non-resident can be
registered as a taxpayer in Ukraine only if such non-resident
registers the permanent establishment. The registration
annual limit of UAH 1,000,000 taxable transactions applies to
permanent establishments.

in your country?
No. There is no specific legislation to tax non-resident supplies
of electronically supplied/digital services to private consumers
resident in Ukraine.

In accordance with Ukrainian legislation a non-resident can be
registered as a taxpayer in Ukraine only if such non-resident
registers the permanent establishment. A non-established
business does not need to appoint a fiscal representative in
order to register. Naturally, any non-resident can set up a
subsidiary in Ukraine.

If you are obliged to charge VAT, you must also report and
pay VAT to the state, regardless of the amount of sales. The
obligation to report also applies to those who are registered
for VAT and have the right to make deductions (right to
repayment) despite not needing to charge VAT.
In Ukraine the tax reporting period for VAT is one calendar
month and in some cases specified by the tax code a calendar
quarter, taking the following into account:
if a person is registered as a taxpayer on the day other than
the first day of the calendar month, the first reporting
period is the period that begins on such registration date
and ends on the last day of the first full calendar month
if the tax registration of a person is cancelled on the day
other than the last day of the calendar month, the last
reporting period is the period that begins on the first day of
the month and ends on the day of such cancellation.
A tax return for the base tax reporting period (a calendar

month) shall be filed within 20 calendar days following the last
calendar day of the tax reporting month.
The taxpayer shall pay the amount of the VAT liabilities
specified in the VAT return within ten calendar days following
the relevant deadline.

Taxpayers are required to pay a penalty of 170 UAH for VAT
returns failed or late submissions on the case by case basis.
Repeated violations committed by the taxpayer during the year
shall incur a penalty of UAH 1,020 for each failure to submit
or the late submission. If the taxpayer does not pay its tax
liabilities on time, the penalties are as follows:
a delay up to 30 calendar days inclusive following the last
day of deadline for payment of such liabilities at the rate
of 10% of repaid amount of the tax debt
a delay of more than 30 calendar days following the last day
of deadline for payment of such liabilities at the rate of
20% of repaid amount of the tax debt.

In addition to VAT declarations businesses must provide
customs declarations for imported goods.

Yes. Penalties can be imposed for the understatement of tax and
for the budget compensations overstatement.
Penalties and interests can be applied in case of errors and
omissions made in tax returns, or when the tax is paid late.
Penalties can also be applied when the businesses:
fail to maintain adequate records
fail to provide information (including additional
declarations) to the tax authorities
make repeated mistakes.
Criminal proceedings may be brought in the case of intentional
evasion of taxes, duties and other payments in the system of
taxation imposed in accordance with the law.
Ukraine

claimed if they are not registered in the Ukraine?
No. VAT incurred by overseas businesses cannot be claimed if
they are not registered in Ukraine.

Required details to be shown on the VAT invoice are:
invoice number which is unique and sequential
invoice date
sellers and customers full or short names
sellers and customers tax registration numbers
supplied to the customer, their quantity and volume
supply price exclusive of VAT
rate of VAT and amount of VAT in numeric value
total amount, including VAT
commodity code according to Ukrainian classification of
goods for foreign economic activities.
date of the tax liability
description sufficient to identify the goods or services
commodity code according to Ukrainian classification of
goods for foreign economic activities
goods/services measurement units
quantity of goods or scope (volume) of services
unit price, excluding VAT
total amount payable, excluding VAT sectional to 20%,
7%, 0%-rated or exempted transactions
total amount payable, including VAT.
All VAT invoices and adjustments to VAT invoices should be
digitally compiled and registered in the Unified Register.
For further information on indirect tax in the Ukraine please contact:
Maxim Shutiy
T +38 (067)409 34 26
E maxim.shutiy@ua.gt.com
United Kingdom

Reduced rate of 5% for some goods and services including childrens car seats and domestic energy
supplies.
Zero-rated goods and services include most food,childrens clothes and printed matter.

these rates?
No.
Value Added Tax (VAT) is the principal indirect tax in the UK. It is a tax on consumer expenditure, and is
Yes. It relates to the annual turnover of taxable transactions in the UK, and once the limit has (or will be)
reached it is necessary to register. The current registration threshold is GBP 82,000 for UK businesses,
and those with UK establishments.

No. There is no registration limit for businesses that are not established in the UK and they will need
internet sales.

In certain circumstances, a non-established person may be directed by the UK tax authority to appoint a
can also be submitted on a monthly or annual basis, subject to tax authority approval.

United Kingdom

Deduction of VAT
Input VAT cannot be recovered in certain circumstances, for example:

goods andservices that havebeen purchased for private reasons
business entertainment
costs incurred in relation to VAT-exempt or non-business supplies
specified items, for example a 50% restriction on car hire.

in the UK and in other European Union (EU) countries. It is
governed by the Principle VAT Directive of the EU and is also
enacted in National Law.
It is also applied to goods, and certain services, entering
the jurisdiction. Although VAT is ultimately borne by the
for charging, collecting and paying it to the tax authority at
each stage of the process rests with the business making the
supply, ie the sale.
business to the tax authority. Where the input tax exceeds
the output tax, a refund can be claimed, subject to certain
conditions.
A transaction is within the scope of UK VAT if the
it is a supply of goods or services. Although the
term supply is not defined in the legislation, it has a
broad interpretation
it takes place in the UK
UK, or has a liability to become registered
services in the UK; the standard rate, the reduced rate, and the
from the tax.

Most goods imported into the UK from outside the EU are
It is also important to note the interaction between VAT and
customs duty. Customs duty is levied across the EU at the place
where goods are imported into the community. It is levied in
order to bring the cost of goods produced outside the EU up to
the same level as those produced within it. Once duty (and VAT)
has been paid by the importer, the goods are in free circulation
and they can then be released for use in the home market. Unlike
other indirect taxes, such as VAT, once duty has been paid it is
not usually recoverable by the importer. It therefore represents a
bottom line cost to the importing business if it cannot be passed
on in higher prices. It is consequently very important to ensure
that the correct rate of duty is applied. VAT is charged on the
value of the importation, including any custom duty.
United Kingdom

supplies in the UK exceeds the annual registration limit, or is
not been exceeded.
Please note that the UK registration threshold is currently
GBP 82,000 per annum.
a VAT group if:
establishment, in the UK
they satisfy the control test, ie one of them controls each of
the others, or one person or a business partnership controls
all of them
they satisfy anti-avoidance rules that apply in

that are not established in the UK, but for the purposes of the
the UK, or have a reasonable expectation of trade in the next
month, irrespective of the level of turnover.
Registration for VAT in the UK may also be required
calendar year, or the equivalent in its own currency. The UK
has adopted an annual threshold of 70,000 which equates to
the upper threshold in euros.
persons in the UK will be subject to VAT at the appropriate
distance sales to the UK exceeds the UK threshold of 70,000:
the supplier becomes liable to register for VAT in the UK
the UK becomes the place of supply
any further sales to customers in the UK are subject to
UK VAT.
Suppliers can choose to make the UK the place where the
United Kingdom

in your country?
customer belongs). Therefore B2C supplies of electronically
supplied services to customers in the UK are subject to UK
VAT. To ensure compliance with this, suppliers have the choice
to either register for VAT in each Member State where their
customers reside, or elect to register under the EU VAT MOSS
simplification scheme in a single Member State (where they
are established). Businesses with multiple establishments in
choosing to operate MOSS and become their Member State
of Identification. The UK is popular choice for a MOSS
registration due to the English language.

The Tax Authority in the UK may direct a person to appoint
where the person:
goods in the UK from one or more other EU countries
in the UK
country (or part of such a country) and where it appears to
the UK tax authority that there is no provision for mutual
assistance similar to that which provided between the UK
and other EU countries
of residence in the UK.

months, ending on the last day of a calendar month. A business
can request a specific accounting cycle to coincide with its
financial or management reporting. Businesses that are in a net
repayment position (because of the nature of their activities)
and those incurring exceptionally high expenditure (for
example, as a result of set up costs or a capital project)
can apply to submit returns on a monthly basis to improve
cash flow.
All VAT returns have to be submitted within 30 days of
the end of the relevant accounting period, together with any
tax due. As all returns and payments have to be submitted
electronically, taxpayers get a further seven days (in addition
to the normal 30 days) in which to submit the return and pay
the tax due.
Businesses that had a taxable turnover exceeding 2.3m in
the preceding calendar year, must make interim VAT payments
every month. An interim payment must be made at the end
of the second and third months in each accounting period. A
balancing payment for the quarter is then made when the return
is submitted.

For the first late submission or payment, the tax authority
will issue a notification to the taxpayer confirming that a
penalty may be imposed in the future. If another submission or
payment is late within the next 12 months, a fixed percentage
penalty is imposed on that occasion. The percentage penalty is
increased for subsequent defaults (up to a specified maximum),
unless returns and the related payments are made on time for a
12 month period.
United Kingdom

Businesses that are registered for VAT in the UK, and make
in other EU member states exceeds GBP 35,000 in the current
ESLs for services should be submitted for each
calendar quarter.
dispatched to, or arriving from, other EU countries is above an
annual threshold, a supplementary declaration (referred to as
an Intrastat declaration) has to be submitted for either or both.
Both declarations are used for statistical reporting purposes
across the EU and are not tax returns, though they should be
reconciled back to VAT returns submitted.

serious matters.

United Kingdom?
Member States, and enables a business established in an EU
country to recover VAT incurred in another Member State.
rules that apply in the Member State making the refund. The
claim is submitted electronically via a portal in the home tax
authority in the Member State where the claimant is established.
was incurred.
into the UK or purchases of goods and services used in the UK.
the UK
they made no supplies of goods and services in the UK
where they are established in a third country having a comparable
system of turnover taxes, unless the UK tax authority allows
otherwise, that country provides reciprocal arrangements for
refunds to be made to taxable persons established in the UK.
United Kingdom
The claim period in the UK is from 1 July to 30 June each year.

Claim forms have to be submitted to the UK tax authority no
later than six months from the end of the relevant designated
year, ie by 31 December each year.

the invoice date
the total amount of VAT charged expressed in GBP.
services, it must:
or services

electronic format and there is no need to inform the tax
authority. Electronic invoices must contain the same
For further information on indirect tax in the United Kingdom please contact:
Karen Robb
T +44 (0)20 7728 2556
E karen.robb@uk.gt.com
Alex Baulf
T +44 (0)20 7728 2863
E alex.baulf@uk.gt.com
United Kingdom

Middle East
Gulf Cooperation
Council (GCC) member
countries have from
1 January 2018 to
1 January 2019 to
implement VAT.
The UAE will
implement VAT at
the rate of 5% from
January 2018.
Middle East
Kuwait
Standard rate: No VAT system
Other: No VAT system
Gulf Cooperation Council

The Middle East is expecting momentous changes. In a move to generate additional revenue and
diversify the economy, the Gulf Cooperation Council (GCC) countries Bahrain, Kuwait, Oman,
Qatar, Saudi Arabia and the United Arab Emirates are expected to levy VAT from 2018.
Kuwait
United Arab Emirates
Kuwait currently does not currently impose VAT. However,

there are plans to introduce it in the future along with
increasing custom tariffs as measures to improve the gross
domestic product of non-oil revenues.
The chances of such regulations passing by the parliament
will be higher the longer the decline in oil prices persists.
In March 2016, Kuwaits cabinet has approved economic
reforms including the introduction of a 10% tax on corporate
profits to narrow a budget deficit caused by low oil prices.
It has been confirmed that the United Arab Emirates will

implement value added tax (VAT) at the rate of five per cent
from 1 January 2018. Obaid Humaid Al Tayer, Minister of
State for Financial Affairs, said that GCC countries have
from 1 January 2018 to 1 January 2019 to implement VAT.
He confirmed that each country represented in the GCC can
implement VAT within that time period and continued that
a lot of ground work needs to be done before implementing
VAT.1 He continued that the GCC countries are currently
working on a framework, which he expects to be agreed upon
and made public in June of this year.2
UAE to implement 5 per cent VAT from January 2018

(Gulf News)
Five per cent value added tax in UAE from 2018
(Khaleej Times)
1
2
Gulf Cooperation Council
Following the announcement, it has been confirmed that

the UAE will impose five per cent VAT while exempting 100
food items, healthcare and education. It has been claimed that
by imposing VAT, the country could generate upwards of
Dh12 billion from tax revenue in the first year. The move to
implement VAT will enable the GCC to continue diversifying
the economy and hence, become less reliant on oil revenues
to promote long term growth and sustainability. Even with
a low tax rate of five per cent, with the introduction of VAT,
it will not be difficult for GCC states to generate tax revenues
up to two per cent to gross domestic product, said Christine
Lagarde at the Arab Fiscal Forum this month1.
Following on from the statement at a press conference,
Obaid Humaid Al Tayer continued and stated that the UAE
is not currently undertaking any study on personal income tax
and that no such proposal was under consideration. He said
that the current priority of the Ministry was to put in place the
infrastructure required for the implementation of VAT.3
For further information on indirect tax in the Gulf Cooperation Council please contact:
Bahrain
Jassim Abdulaal
E jassim.abdulaal@bh.gt.com
Kuwait
Hazem Al-Agez
E hazem.alagez@kw.gt.com
Oman
Nasser Al-Mugheiry
E nasser.almugheiry@om.gt.com
Qatar
Samir M. Salem
E gt@qatar.net.qa
Saudi Arabia
Akram F El Husseini
E ahusseini@aldaraudit.com
Atul Varma
E atul.varma@ae.gt.com
UAE to implement 5 per cent VAT from January 2018 (Gulf News)
Five per cent value added tax in UAE from 2018 (Khaleej Times)
UAE confirms no income tax yet, but 5 per cent VAT is coming (online)
1
2
3
International indirect tax guide
Contacts
Africa
Tunisia
Chile
Botswana
El Moez Ben Amor

T +216 (20) 332 053
E elmoez.benamor@tn.gt.com
Hctor Castillo
T +56 2 26513000
E hector.castillo@cl.gt.com
Zambia
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Rodia Musonda
T +260 211 227722 -8
E rodia.musonda@zm.gt.com
Heiner Orozco
T +506-2253 9782
E heiner.orozco@cr.gt.com
Zimbabwe
Mexico
Christina Muzerengi
T +263 4 442511 4
E christina.muzerengi@zw.gt.com
Mario Rizo
T (52 33) 38174480
E mario.rizo@mx.gt.com
Americas
Santos Briz
T (52 55) 54246500
E santos.briz@mx.gt.com
Rajesh Narasimhan
T +267 395 2313
E rajesh.narasimhan@bw.gt.com
Rebecca Sanchez
T +267 395 2313
E rebecca.sanchez@bw.gt.com
Egypt
Hossam Hilal
T +2 02 257 44 810
E hhilal@gtegypt.org
Kenya
Samuel Mwaura
T +254 20 3752830
E samuel.mwaura@ke.gt.com
Argentina
Mauritius
Nstor Taravini
T +54 11 4105 0000
E nestor.taravini@ar.gt.com
Sattar Hajee Abdoula

T +230 4673001
E sattar.abdoula@mu.gt.com
Julia Adano
T +54 11 4105 0061
E julia.adano@ar.gt.com
Mariam Rajabally
T +230 467 3001
E mariam.rajabally@mu.gt.com
Juan Pablo Fossati

T +54 11 4105 0000
E juan.fossati@ar.gt.com
Morocco
Brazil
Sana Al Mokri
T +212 (0) 5 22 54 48 00
E sana.almokri@ma.gt.com
Fbio Mancilha
T +55 19 98136-2328
E fabio.mancilha@br.gt.com
Mozambique
Canada
Dev Pydannah
T +258 823214180
E dev.pydannah@mz.gt.com
Maurice Arsenault
(Montreal, Qubec)
T +1 (514) 393-4817
E arsenault.maurice@rcgt.com
South Africa
Manon Harvey (Montreal, Qubec)

T +1 (514) 390-4160
E harvey.manon@rcgt.com
Cliff Watson (Johannesburg)

T +27 11 322 4649
E cliff.watson@za.gt.com
Anton Kriel (Cape Town)
T +27 21 417 8747
E anton.kriel@za.gt.com
Cathy Kuhrt (Toronto, Ontario)

T +1 (416) 360-4986
E cathy.kuhrt@ca.gt.com
Mark Singer (Halifax, Nova Scotia)
T +1 (902) 420-7185
E mark.singer@ca.gt.com
Daniel Santiago
T (52 33) 38174480
E daniel.santiago@mx.gt.com
Pedro Zugarramurdi
T (52 55) 54246500
E pedro.zugarramurdi@mx.gt.com
Panam
John C. Cheng
T +507 264 9511
E cheng.jr@pa.gt.com
Peru
Juan Carlos Basurco
T +51 1 994057428
E juancarlos.basurco@pe.gt.com
Carlos Chirinos Robb
T +51 1 615 6868
E carlos.chirinos@pe.gt.com
Puerto Rico
Maria de los ngeles Rivera, CPA
T +1-787-754-1915 ext. 207
E maria.rivera@pr.gt.com
Javier Oyola
T +1-787-754-1915 ext. 227
E javier.oyola@pr.gt.com
United States
India
Philippines
Rob Clarke
T (813) 204-5153
E rob.clarke@us.gt.com
Amit Kumar Sarkar

T +91 22 66262750
E amit.sarkar@in.gt.com
Edward D. Roguel
T +63 (2) 988-2288 local 540
E wowie.roguel@ph.gt.com
Uruguay
Raman N.V.
T +91 080 42430702
E raman.nv@in.gt.com
Singapore
Nicols Juan
T +598 2908 33 86
E njuan@gt.com.uy
Indonesia
Lor Eng Min

T +65 6805 4127
E engmin.lor@sg.gt.com
Carla Kaphammel
T +598 2908 33 86
E ckaphammel@gt.com.uy
Tommy David
T +62 (21) 571 0703
E tommy.david@id.gt.com
Lorraine Parkin
T +65 6805 4110
E lorraine.parkin@sg.gt.com
Asia Pacific
Arvin Max Samuels

T +62 (21) 571 0703
E arvin.samuels@id.gt.com
Shareen Tan
T +65 6805 4134
E shareen.tan@sg.gt.com
Aris Kurniawan
T +62 (21) 571 0703E
E aris.kurniawan@id.gt.com
South Korea
Australia
Tony Windle
T +61 (07) 3222 0222
E tony.windle@au.gt.com
Bangladesh
Lutful Hadee
T +88 (0) 2 988 3863
E hadee@howladaryunus.com
Cambodia
Ronald C. Almera
T +855 23 966 523
E ronald.almera@kh.gt.com
Veasna Leng
T +855 23 966 520
E veasna.leng@kh.gt.com
China
Julie Zhang
T +86 10 85665777
E julie.zhang@cn.gt.com
Hong Kong
William Chan
T +852 3987 1399
E william.chan@cn.gt.com
Japan
Dong-Bum Kim
T +82 2 2056 3706
E dongb.kim@dmgt.co.kr
Kumiko Miyajima
T +81 3 5770 8914
E kumiko.miyajima@jp.gt.com
Sang-Il Kim
T +82 2 2056 3713
E sangi.kim@dmgt.co.kr
Malaysia
Joo-Yun Woo
T +82 2 2056 3783
E jooy.woo@dmgt.co.kr
Alan Chung
T +60 3 2692 4022
E alan.chung@my.gt.com
New Zealand
Dan Lowe
T +64 (09)308 2531
E dan.lowe@nz.gt.com
Pakistan
Nadeem Tirmizi
T +92 (0)51 2271906 Ext 107
E ntirmizi@gtpak.com
Taiwan
Jay Lo
T +886 2 2789 0887 ext 314
E jay.lo@tw.gt.com
Thailand
Edward Strauss
T +66 (2) 205-8120
E edward.strauss@th.gt.com
Vietnam
Zahid Mehmood
T +92 (0)51 2271906 Ext 109
E zmehmood@gtpak.com
Nguyen Hung Du
T +84 8 3910 9231
E hungdu.nguyen@vn.gt.com
Muhammad Mansoor
T +92 (0)51 2271906 Ext 110
E m.mansoor@gtpak.com
Valerie Teo
T +84 8 3910 9235
E valerie.teo@vn.gt.com
Europe
Estonia
Ireland
Albania
Kerttu Kuuseme
T +372 626 4500
E kerttu.kuusemae@ee.gt.com
Jarlath OKeefe
T +353 (0)1 680 5817
E jarlath.okeefe@ie.gt.com
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T +372 626 4500
E kristjan.jarve@ee.gt.com
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T +389 2 3214 700
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Davit Harutyunyan
T +374 (10) 54 51 48 ext 12
E davit.harutyunyan@am.gt.com
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T +43 1 26262 38
E karl.newertal@at.gt.com
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International

indirect tax guide

Many other governments, regulators and tax

SEC Accounting and auditing enforcement Release No. 3226 10 January

International indirect tax guide 1

Lack of visibility of global indirect tax compliance

Audits from tax authorities

Changes in VAT/GST rules

Implementation of new VAT/GST regimes

New VAT/GST reporting requirements

Historic liabilities and penalties

Changes in VAT/GST rates

The complications of indirect tax compliance have

Now were at a fresh watershed as the focus of

OECD/G20 Base Erosion and Profit Shifting Project Addressing

2 International indirect tax guide

in the growing adoption of reverse charge

Feeling the strain

The result is an indirect tax landscape in which

1. Central team to anticipate changes and

A central teams of indirect tax specialists can

So how can your business create the capabilities

2. Augment ERP with dedicated tools

Bolting dedicated indirect tax management

International indirect tax guide 3

3. Workflow management tools to plan and

With so many moving parts, its important to

4. Close co-operation with sales teams

Sales teams often hold some of the most

5. Blueprint of documentation to demonstrate

Among the biggest risks are patchy or ad

4 International indirect tax guide

The yardstick for indirect tax compliance is

Unlike some other indirect taxes, customs duty is

International indirect tax guide 5

Global indirect tax rates

6 International indirect tax guide

France (Corsica1 and Overseas territories2)

International indirect tax guide 7

Indirect tax overview

8 International indirect tax guide

Standard rate of 12% for most goods and services.

Are there any confirmed or anticipated changes to

What is the principal indirect tax?

Is there a registration limit for the tax?

Does the same registration limit apply to

A non-established business need not register for VAT.

Does a non-established person need to appoint a

How often do returns have to be submitted?

International indirect tax guide 9

Are penalties imposed for the late submission of

Are any other declarations required?

Are penalties imposed in other circumstances?

Yes. Penalties can be imposed on false or misleading information or statements.

Can the tax incurred by overseas businesses be

No. Tax can only be claimed by business registered in Botswana.

Is there any specific legislation to tax non-resident

There is no specific provision to tax non-resident supplying electronic/digital services to private

For further information on indirect tax in Botswana please contact:

10 International indirect tax guide

1. Central team to anticipate changes and

2. Augment ERP with dedicated tools

3. Workflow management tools to plan and

5. Blueprint of documentation to demonstrate