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grist to the mill

Kitty Miv, Editor
10 July, 2019

This week, Europe (just for a change!) and VAT are the focuses of our attention.

Assuming the helm of the European Union at the start of the month, the new Finnish presidency has identified tackling tax avoidance and evasion as one of its main priorities for its six-month term.

In its recently published presidency program for the period July 1 to December 31, 2019, Finland said that the EU "needs to work harder to prevent harmful tax competition and tax evasion."

"Close cooperation within the EU should make it possible to take effective action in tackling aggressive tax planning and tax evasion and reducing harmful tax competition," the document states. "These policy measures will make for a fairer and more predictable business environment."

The document also stated that the EU's involvement in ongoing discussions within the OECD on digital taxation will continue under Finland's EU presidency.

Moving on to the point at which our two topics for this week intersect, then, at the end of June, the Norwegian Finance Ministry revealed that in line with a significant number of other countries globally, and in an increasingly digital world, Norway would be exempting electronic publications from VAT, from the start of this month.

The Ministry explained that the VAT exemption for e-books will ensure equal treatment between electronic and physical publications, which have been exempt from VAT since 2016.

Under the previous VAT rules, supplies of electronic publications are subject to the 25 percent standard VAT rate.

According to a previous announcement regarding the measure, the streaming and downloading of audio books will also be covered by the exemption. However, that statement stressed that the VAT exemption would only cover electronic books and journals which are similar in type to their printed equivalents.

Meanwhile, more broadly, the European Union has called for applications from value-added tax experts to contribute to the work of the EU VAT expert group. Applications must be sent by July 31, 2019, at the latest, so get applying, VAT fanciers! (Is there such a thing?)

On the other side of the globe, New Zealand has enacted the Taxation (Annual Rates for 2019–20, GST Offshore Supplier Registration, and Remedial Matters) Act. I honestly don't know how they come up with these catchy names, I really don't.

The legislation will introduce new GST collection obligations for low-value imported goods, and will make a number of "fairness changes" to the tax regime; one of the biggest changes will require offshore businesses that supply low-value goods (those worth NZD1,000 (USD667) or less) to New Zealand to collect GST. From December 1, offshore businesses who supply more than NZD60,000 of services and low-value goods per year will pass on GST directly to Inland Revenue.

In Zambia, however, the government has balked in the face of taking a bold step, as governments are wont to do, and has once again pushed back implementation of a sales tax in place of value-added tax, to September 1, 2019, from the planned July 1 implementation date, which had already been pushed back from a proposed April 1 date.

If actually introduced at some point, the regime will feature two rates, namely a 16 percent sales tax rate on imported goods and services, and a 9 percent rate will be charged on goods and services supplied by domestic businesses.

I daresay they'll get there eventually. And if they don't, it's all grist to the mill of commentators such as myself. Until next week!

Tags: Euro | Taxation | Offshore

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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