In this issue Australia
Australia moves forward with changing GST treatment of digital currency On 14 September 2017, the Australian government introduced legislation into Parliament to remove the double taxation of GST on digital currency. The change is intended to remedy the current situation in which consumers who use digital currencies may effectively bear GST twice: once on the purchase of the digital currency and again on its use in exchange for other goods and services subject to GST. It is proposed that the legislation will have a retrospective start date of 1 July 2017. Changes to Australia's cross-border GST rules Australia's new cross-border GST rules entered into force on 1 July 2017, with an extraterritorial GST regime now applying to the supply of digital products and services to Australian consumers. This article outlines the key features of the new regime and highlights a number of practical issues to be considered by taxpayers. | Read more GST on Low Value Goods: Productivity Commission Review On 21 June 2017, the Treasury Laws Amendment (GST Low Value Goods) Bill 2017, which applies GST to supplies of low value goods purchased by consumers and imported into Australia, was passed with the inclusion of an amendment requiring the Productivity Commission to conduct an inquiry into collection methods of GST arising in respect of supplies of low value goods. This article provides an overview of the work undertaken by the Commission. Argentina
Argentina publishes VAT reimbursement regulation for renewable energies projects FTA General Resolution 4101-E was published in the Official Gazette on 8 August 2017, regulating the mechanism to reimburse VAT billed on capital goods or infrastructure, electro mechanic and assembly investments made under the terms of the promotional law for the use of renewable energy sources in the production of electric energy. Belgium
The option to subject the rent of real estate used for professional purposes to VAT The Belgian government has introduced the option to have immovable rent subjected to VAT, which can then be deducted. This article outlines the considerations which need to be taken into account for a company looking to exercise the right to opt for taxation. China
The State Administration of Taxation issues rules to clarify certain VAT issues On 20 April 2017, the State Administration of Taxation issued Bulletin 11 to clarify certain VAT issues. This article provides an overview of the key provisions relating to construction services and invoice verification. China reduces the VAT on agricultural products and certain life necessities to 11% On 28 April 2017, the Ministry of Finance and State Administration of Taxation jointly issued Notice 37 introducing a reduction in the VAT rate for agricultural products and certain life necessities to 11%. This article sets out the main features of the change. European Union
CJEU: Financial and insurance sector excluded from VAT cost sharing exemption On 21 September, the Court of Justice of the European Union delivered three long awaited judgments in the cases DNB Banka (C-326/15), Aviva (C-605/15) and Commission/Germany (C-616/15), holding that the VAT cost sharing exemption can only apply in respect of businesses carrying out activities in the public interest and thus cannot be used in the financial and insurance sector. | Read more The Court of Justice of the EU: Knowing the intentions of the first acquirer can affect the classification of the supplies On 26 July 2017, the Court of Justice of the European Union ruled in Toridas UAB (Case C-386/16), concerning the classification of transactions carried out as intra-Community supplies and the application of the VAT exemption with the right of deduction - the zero rate. By its decision, the CJEU confirms that in a cross-border supply chain with two successive supplies, there can only be one zero rated intra-Community supply. As such, the processing of the goods before transporting to the final destination will not change this. A transfer of immovable property in order to settle a tax debt is not a supply subject to VAT In its 11 May 2017 decision in the case Minister Finansow v Posnania Investment SA (C-36/16), the Court of Justice of the European Union clarified the meaning of "supply of goods" for the purposes of the VAT Directive, holding that the transfer of ownership of immovable property to a State or local authority in settlement of a tax debt does not constitute such a "supply of goods for consideration" that is subject to VAT. No 0% rate for transportation services provided by a sub-contractor By a judgment delivered on 29 June 2017, the Court of Justice of the European Union held that the VAT exemption available for services relating to the export of goods cannot be applied to services consisting in the transport of goods to a third country, where those services are not supplied directly to the consignor or the consignee of those goods. This article provides an overview of the Court's decision in L.C. IK (C-288/16). Opinion of Advocate General Wahl in CJEU joined cases RGEX Gmbh (C-374/16) and Igor Butin (C-375/16) This article considers the conclusions set out in the opinion of Advocate General Wahl in joined cases RGEX Gmbh (C-374/16) and Igor Butin (C-375/16), delivered on 5 July 2017, in which he took the view that it is not required that an invoice indicates the address where the issuer carries out its economic activity in order to benefit from the right of deduction, holding instead that it is sufficient that the supplier may be promptly and effectively contacted at that address. Italy
Frauds occurred in relation to indirect exports: burden of proof In a judgment delivered on 20 September 2017, the Italian Supreme Court provided a number of clarifications on the nature of the burden of proof in cases of fraud relating to ex-works exports, where transport is carried out by the purchaser.
Malaysia introduces new GST relief on supplies directly connected to exported goods Malaysia has introduced a new measure granting suppliers a relief from the obligation to charge GST on certain types of supplies which are made directly in connection with exported goods, subject to certain prescribed conditions. The relief came into force on 1 July 2017. Singapore
Singapore issues guide on GST exemption of investment precious metals The IRAS has issued the sixth edition of its guide on the GST exemption of investment gold, silver, and platinum which took effect from 1 October 2012. This article provides an overview of the sixth edition of the guide. Switzerland
Switzerland amends VAT Act During its meeting on 2 June 2017, the Federal Council decided that the partial revision of the Value Added Tax Act adopted by Parliament would come into force on 1 January 2018. Companies whose global turnover is at least CHF 100,000 will be liable to VAT. Previously, foreign companies could provide their services in Switzerland without VAT up to a turnover level of CHF 100,000. Mail order regulations will not come into force until 1 January 2019.
Venezuelan VAT exemption for basic food and personal care import products On 4 July 2017, Presidential Decree No. 2.796 came into force in Venezuela. The decree exempts from the payment of VAT, customs duties, and customs service fees the final importation of basic food and personal care products made by the National Public Administration and distributed in Venezuela. The exemption will be valid for one year.