The Belgian government had introduced VAT relief to counteract the effects of the corona pandemic. These reliefs have now been extended again. The reduced VAT from 12% to 6% on masks and hydroalcoholic gels has been extended, as well as a further deferral of VAT penalties for late registration and late payments. Instead of a regular interest rate of 0.8% for late payments, interest will be charged at 0.33%.
Regulation of the monthly declaration
Regulation of the tax return quarter 2 2021
Regulation of monthly reporting for July 2021
In Brazil, import duties and the federal excise tax (IPI) on several products were reduced to 0% due to the pandemic. Some states have also extended the deadlines for fulfilling ancillary obligations related to the tariff reduction for transactions involving hygiene, medical and pharmaceutical products.
In Bulgaria, due to the pandemic, there is also some relief for taxpayers. For example, the VAT rate for hospitality, catering, restaurants, beer, wine, books, and other products has been reduced from 20% to 9%. This measure has now been extended until December 31, 2021.
Until September 30, 2021, British Columbia is offering temporary Provincial Sales Tax rebates for certain plants and equipment, such as machinery, zero-emission cars, and even IT.
Many companies are struggling with the economic effects of the Corona pandemic, which is why China wants to support smaller companies in particular with VAT relief. For example, China has extended the reduction of the cash-based VAT scheme, from 3% to 1%, for small businesses until December 31, 2021.
In addition, other measures have been extended from June 2021 to December 31, 2021:
In Costa Rica, the standard VAT rate was lowered from 13% to 9%. VAT on tickets for live and cultural events was reduced from 13% to 7%.
The VAT exemption for hotels and other tourist services is to apply until the end of 2021. The national excise tax for restaurants in Colombia is reduced from 8% to 0%. The VAT for flights is also reduced from 19% to 5%.
The VAT rate on basic foodstuffs was reduced from 25% to 13%.
In Cyprus, VAT on hotels, accommodation, hospitality, restaurants, cafes, and public transport was reduced from 9% to 5%.
In the Czech Republic, a reduced tax rate of 10% applies to accommodation, sports, and cultural activities. In addition, there is a possibility to postpone VAT payments for the fourth quarter in 2020 and the first quarter in 2021, until August 16, 2021, at the latest. In addition, the electronic entry of sales (EET) with associated invoicing has been postponed again, to January 1, 2022.
In Denmark, the deadline for repayment of VAT loans and repayment of VAT from the first quarter of 2020 has been postponed from April 2021 to December 2021. In addition, small businesses can borrow interest-free VAT payments made from 2021 until March 31, 2022.
In Estonia, protective equipment for private use and other medical equipment intended to prevent the spread of the Covid 19 virus are exempt from VAT and customs duties for the time being.
Even though France has not made such extensive adjustments to VAT, it is still possible for companies to apply to the corporate tax department for a penalty-free deferral of payment of the next due dates for direct taxes. VAT returns must still be submitted on time.
In Germany, the 7% VAT reduction for restaurants and catering services due to the pandemic has been extended until the end of 2022.
In addition, the due date for the annual VAT return has been postponed from March 31, 2021, to August 31, 2021, provided that it is prepared by an external professional services consultant.
Due to the Corona pandemic, the VAT rate in Greece for transport, coffee, soft drinks, cinemas, and tourist services was reduced from 24% to 13%. The relief for cinemas, beverages, and catering services has now been extended until September 30, 2021. The reduction in the rate for tourist services will be extended until December 31, 2021.
In the UK, VAT on e-books and online journals has been reduced from 20% to 0%. The VAT rate for hospitality and tourism, restaurants, cafes, pubs (excluding alcohol), hospitality, hotels, guest houses, house rentals, caravan and tent sites, hot food takeaways, theaters, circuses, amusement parks, concerts, museums, zoos, cinemas, and exhibitions has been reduced from 20% to 5%. The UK VAT cut to 5% will apply for the time being until September 30, 2021, after which it will be increased again to 12.5%, and after April 30, 2022, VAT will revert to its normal rate of 20%.
In Iceland, the accommodation tax is suspended until December 31, 2021. Taxes levied in 2020 are also not due until February 2022.
In Ireland, the pandemic reduced the standard VAT rate from 23% to 21%. However, this regulation has been lifted again since March 2021 and the rate is now 23% again. VAT charged on tourism and hospitality services was reduced from 13.5% to 9% and apply until the end of 2021.
There are special rules regarding the payment of VAT liabilities during the Corona crisis. While the four monthly installments of 50% of the liability already had to be made between September and December 2020, the 24 monthly installments for the remaining 50% have to be paid by December 2022. In addition, the plans related to the implementation of pre-filled VAT returns have been postponed from July 1, 2021, to January 2022, in order to reconcile the withdrawal of the E-Sterometer.
In Japan, the reduced consumption tax rate of 8% is to be reduced even further to 5% by the end of 2022. After that, it is to be gradually returned to 8% over a period of years. In addition, companies will be offered excise tax-free payment delays without penalties and interest. Beginning Feb. 1, 2021, businesses must have at least a 20% decline in sales to qualify for this one-year deferral of excise, corporate and personal income taxes.
In Lithuania, as of July 1, 2021, the VAT rate for hospitality, sports, and cultural services will be reduced from the regular rate of 21% to 9%. This reduction is to apply for the time being until December 31, 2021. In addition, VAT liabilities can be extended for another four months until August 31, 2021.
After the pandemic, goods and services taxes are to be reintroduced so that declining tax revenues can be recouped.
The VAT rate in Montenegro has been lowered from 21% to 7% for certain products and services and is valid until August 31, 2021. These include:
The Netherlands has announced that it will extend tax breaks introduced as a result of the pandemic until October 1, 2021. These include the following regulations:
However, the deferral of regular VAT payments will continue to end on July 1, 2021, which means that repayment of VAT due will begin on October 1, 2021.
Norway has also introduced some reductions in VAT. These reliefs are now extended until September 30, 2021. The tax rate on accommodation, leisure and transport was originally 12%. At the start of the corona pandemic, the rate was initially reduced to 7% in April 2020 and then reduced even further to 6%. This tax rate additionally applies to visits to cinemas, public transport, accommodation services, and admissions to any leisure facilities.
In Portugal, VAT rebates have been introduced in a bid to revive tourism. In addition, VAT vouchers are intended to increase spending in the retail sector. These reliefs, known as “IVAucher“, are issued on bills paid in museums, restaurants, cafes, and hotels. These vouchers can then be redeemed for other expenses to receive discounts.
Foreign companies with a Slovak VAT registration can apply for VAT deferrals, just like domestic companies.
The government in Slovenia offers a two-year plan for the payment of VAT until the end of 2022.
Sweden is extending until the end of 2021 the possibility for taxpayers to request a deferral of VAT payments. The country is also offering consultation on extending monthly VAT payments to a 6-month payment schedule in 2021, including an extension for quarterly taxpayers to 6 months.
The Turkish VAT rate on hotels, accommodation, and domestic flights has been lowered from 18% to 1% due to the pandemic. The implementation date of the new accommodation tax was postponed from January 1, 2021, to January 1, 2022.
In Uruguay, a lowered retail sales tax of 2.5% applies until the end of the Corona crisis. For residential real estate, there is also a temporary VAT reduction from 27% to 5%. This regulation is to apply until December 31, 2022.
We are happy to be there for you – by phone, by e-mail, or personally at your site!
Muzaffer Havcarci
INPOSIA e-Invoicing-Specialist
Sustainability with E-Invoicing