Lowtax Network

Back To Top

Value Added News...

Kitty Miv, Editor
03 December, 2020

In this week's column, we will be focusing on VAT, which has seemingly been a priority for governments around the world recently.

We begin in Malaysia, where the long-running issue of the potential re-introduction of a value added tax is... well... continuing to run, with the Government reportedly considering reintroducing goods and services tax.

Sales and Service Tax has applied in the country since September 1, 2018. It replaced the six percent goods and services tax – a VAT – which was effectively repealed when the rate was reduced to zero percent from June 1, 2018.

The state news agency reported that the possibility of reinstalling GST had been discussed in comments made by the Finance Minister to Maybank IB Research. The minister reportedly also discussed the potential to raise revenues through a carbon tax or digital tax, or by reining in tax breaks.

In Ireland, the Revenue department published guidance on the new VAT e-commerce rules that will enter into effect from July 1, 2021, governing cross-border business-to-consumer (B2C) e-commerce activities in the EU.

Revenue explained that new rules are being introduced for online marketplaces and platforms facilitating supplies of goods in the EU. It said: "Where online marketplaces or platforms are facilitating certain supplies of goods, they will be deemed to be making the supplies themselves. As such, the online marketplace or platform will be responsible for accounting for the VAT on those supplies."

Among other changes, the current VAT exemption for goods in small consignments with a value of up to EUR22 will be abolished with effect from July 1, 2021. All goods imported into the EU will be subject to VAT, irrespective of their value. A new Import One Stop Shop (IOSS) will be introduced to simplify the importation of low value goods – goods not exceeding an intrinsic value of EUR150, excluding goods subject to excise duty – into the EU.

In addition, the VAT Mini One Stop Shop (MOSS) will become a One Stop Shop (OSS). Currently, VAT MOSS may be used only in relation to the supply of telecommunications, broadcasting, and electronic services. The two schemes currently covered by MOSS – the Union scheme and the non-Union scheme – will remain in place, but their scope will be extended.

In the Isle of Man, meanwhile, the focus was still on the online aspects of VAT, but from a filing perspective, with the confirmation that VAT-registered businesses and individuals will be required to submit VAT returns online and make payments electronically from April 1, 2021.

Currently, around three-quarters of VAT returns are submitted electronically, using the Isle of Man Government's Online Services. As of April 1, 2021, e-filing and electronic payment will be mandatory, except where an exemption has been specifically granted.

Then finally for this week, taking a small hop across the Irish Sea to the UK (no, not in that direction. We still don't know what's happening next year in VAT terms in the Irish Sea in that direction... !), the UK Government announced that it intends to repeal the VAT (Treatment of Transactions) Order 1992 before fall 2021. The repeal will impact government departments and National Health Service bodies that supply cars to their employees under salary sacrifice arrangements.

The repeal of the VAT (Treatment of Transactions) Order 1992 will ensure government departments and NHS bodies cannot exploit the legislation to give themselves a VAT recovery advantage over other taxpayers. The legislation was originally introduced to avoid double taxation, but subsequent changes to UK law and policy have meant that the order is no longer required.

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


« Go Back to Blogs

Blog Archive

Event Listings

Listings for the leading worldwide conferences and events in accounting, investment, banking and finance, transfer pricing, corporate taxation and more...
See Event Listings »