Are VAT regulations on the rise? Generally speaking, companies have little control over indirect, national tax policies, and when they will occur. Policies are often unpredictable and, at times, inconsistent – regularly being postponed, delayed, or escalated at a moment’s notice.
Of course, the COVID-19 crisis has made fiscal policy-making somewhat volatile. In the past few months, we have seen delays in significant legislative and fiscal changes, from Vietnam to India to Italy. Actual economic circumstances will always influence fiscal legislation, and while companies worrying about compliance management is no secret, recent research brings a painful issue to the fore.
Several governments continue to put fiscal measures in place to support businesses through the COVID-19 crisis which is reflected in the latest updates from Germany and Belgium.
The German Government has disclosed plans to temporarily reduce German VAT rates as part of their very substantial economic support programme. It is the Government’s intention to reduce the standard VAT rate from 19% to 16% and the country’s reduced VAT rate from 7% to 5%. The reduction will apply for the period from 1 July 2020 to 31 December 2020.
Even though there is no draft bill at this time, a retrospective law can pass legislative procedures in time. As such, Tungsten Network has already started preparations to implement the necessary changes in a timely manner for our global customers.
In the same vein as Germany, the Belgian government has confirmed a reduced VAT rate. Effective 8 June 2020 to 31 December 2020, a reduced VAT rate of 6% will apply to restaurant and catering services in Belgium.
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If you’d like to discuss your compliance needs, please contact [email protected] and we’ll arrange a call to discuss how we can help.