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A Veritable VAT Cornucopia...

Kitty Miv, Editor
06 April, 2022

In this column, you're never far from a VAT reform, and that is certainly the case this week!

We begin our focus on indirect tax developments, then, with the launch by Vietnam of a new online portal for overseas retailers and digital platforms without a permanent establishment in the country to register for value-added tax.

The Portal of General Department of Taxation of Vietnam for Foreign Providers is available in English and Vietnamese, and is intended to support businesses to comply with the requirements to collect and remit tax on online sales to Vietnamese consumers.

In New Zealand, meanwhile, legislators signed off on a parcel of amendments to the GST rules, with Parliament passing the Taxation (Annual Rates for 2021–22, GST, and Remedial Matters) Bill, and Royal Assent subsequently granted.

The legislation includes measures aimed at limiting the deductibility of interest incurred for residential property investments and updates to the residential property bright-line test, and also contains a range of proposed improvements and maintenance measures to ensure the smooth functioning of the tax system, including to: modernize the GST invoicing rules; introduce specific rules for the GST treatment of cryptoassets; set penalties for the sale and acquisition of sales suppression software; and set the annual income tax rates for the 2021–22 tax year.

In Indonesia, the headline value-added tax rate was increased on April 1, 2022, to 11 percent. The hike, from 10 percent, was included in legislation approved by the country's lawmakers last year. The rate will be further increased to 12 percent under the legislation from January 1, 2025.

We close for this week with the United Kingdom, and with not so much a reform, as the reversal of a previous measure, as the value-added tax relief measures for the tourism and hospitality industry that were introduced in response to the COVID-19 pandemic were allowed to expire from April 1.

A five percent rate of VAT was provided to the industry in response to the COVID-19 pandemic in July 2020. This rate rose to 12.5 percent on October 1, 2021.

The headline rate of 20 percent has now been restored on the following goods and services:

  • food and non-alcoholic beverages sold for on-premises consumption, for example, in restaurants, cafes, and pubs;
  • hot takeaway food and hot takeaway non-alcoholic beverages;
  • sleeping accommodation in hotels or similar establishments, holiday accommodation, pitch fees for caravans and tents, and associated facilities; and
  • admissions to the following attractions that are not eligible for the cultural VAT exemption, including: theaters; circuses; fairs; amusement parks; concerts; museums; zoos; cinemas; exhibitions; and similar cultural events and facilities.

Until next week!


About the Author

Kitty Miv, Editor

Kitty was born in Argentina in 1960 to a Scottish cattle rancher and his Argentine wife. Educated in Edinburgh and at Princeton, Kitty worked for the World Bank as an economist, where she met and married an emigre Iranian banker. During her time with the Bank, Kitty worked in a number of emerging markets, including a spell in the ex-USSR as a Transition Economies Team Leader. Kitty is now a consultant in Brussels and has free-lance writing relationships with a number of prominent economic publications. kitty@lowtax.net


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