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VAT Ventures in the Spotlight

Kitty Miv, Editor
13 January, 2022

Having looked last week at VAT via the lens of Bahrain's rate increase from January 1, and the drop in the Bahamian standard rate from the same date, it makes sense to stay with value added tax this week, and there has certainly been a lot going on in this area.

For instance, in Vietnam, the Government recently announced proposals for a two percent cut to the value-added tax rate on various goods and services.

Earlier the Government had considered a one percentage point cut to the headline rate, for all goods and services, for three years. However, it is now proposing to lower the rate to eight percent for a broad range of essential goods and services, to prop up consumer demand and support taxpayers.

In Bulgaria meanwhile, the focus was on COVID-19 mitigation measures, with legislation gazetted to extend value-added tax reliefs, introduced in response to the pandemic, for certain industries.

Legislation passed in July 2020 expanded the scope of the nine percent reduced rate of value-added tax to: certain sports facilities, such as gyms; services provided by tour operators; and beer and wine served in restaurants and catering outlets. VAT was also cut for supplies of publishing materials (including in electronic format) and certain children's products, and later in 2020, Bulgaria broadened the scope of the reduced rate of VAT to cover take-out food.

Greece also recently extended a number of COVID-related VAT relief measures, enacting legislation to provide for a six-month extension, until June 30, 2022, to the imposition of reduced rates of VAT on PPE (at six percent), art objects, collections and antiquities (at 13 percent), and zoo admissions (also at 13 percent).

In the UK, HM Revenue and Customs called on UK VAT-registered businesses to sign up for Making Tax Digital (MTD) for VAT before April 1, 2022.

Since April 2019, businesses with a taxable turnover above GBP85,000 have already been required to follow Making Tax Digital, including keeping digital records and filing VAT returns using MTD-compatible software.

All VAT-registered businesses, including those who have voluntarily registered, must follow MTD rules from April 2022.

And last but not least, in Nigeria, new VAT rules have been published for non-resident persons making supplies of services or intangibles to Nigerian consumers.

New requirements were added to new Section 10 of the Value Added Tax Act in the 2021 Finance Act to require non-resident persons to charge VAT on taxable supplies made to Nigeria. The same obligation will apply for supplies of goods from January 1, 2024.

The legislation includes an obligation on VAT-registered Nigerian companies receiving supplies from overseas to ensure VAT is collected and remitted to the tax agency by self-accounting for the VAT due when necessary. Non-resident companies can appoint a representative in Nigeria to comply with the tax obligations.

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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