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Finance law 2021 has been published: Composite supplies, 0% VAT rate on vaccines, postponement E-Commerce Directive, VAT grouping, E-Invoicing

VAT topics:

  • New provisions to adopt principles established by the CJEU in order to clarify the VAT treatment of composite transactions that include different elements falling under different VAT regimes, which generally provides that transactions including different (non-accessory) elements subject to different VAT rates on a standalone basis will be subject to the highest applicable rate;
  • The application of a 0% VAT rate on COVID-19 vaccines and in vitro diagnostic medical devices approved in the EU with effect from 15 October 2020 until 31 December 2022;
  • The postponement to 1 July 2021 for the implementation of new VAT rules on e-commerce sales to comply with EU law;
  • The introduction of new provisions for the creation of a VAT group regime in accordance with Article 11 of the EU VAT directive (Council Directive 2006/112/EC), which generally come into force on 1 January 2022, with requests to be made by 31 October for a group to be formed from 1 January of the following year; and
  • The inclusion of provisions in relation to the improvement and modernization of management by companies as well as the collection and control by the administration of VAT by generalizing the use of electronic invoicing and establishing related reporting obligations, with an ordinance for this purpose to be issued within 9 months.

Note with respect to the electronic invoicing, it is expected that all businesses will be required to accept electronic invoices from 2023, while the requirement to issue electronic invoices will be phased in, with the requirement to apply for large companies from 2023, for medium companies from 2024, and for small and very small companies from 2025.

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