Recent worldwide VAT/GST RATE developments

Please find below a selection of recent rate developments. Apart from the “usual” Corona driven VAT rate changes, we also see a lot of VAT rate changes triggered by energy prices. The updates are sorted per continent/country, and if you click on an item you will be redirected to the message/source information.

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WORLD

• Looking back @2021 #21: Global VAT rate changes, continuous monitoring needed
• Looking back @2021 #24: Temporary reduction of VAT on Electricity and VAT incentives for Electric Cars
• Rita de la Feria on VAT reductions for the poor: Good or bad?

 

AFRICA

ALGERIA

• Algeria raises digital services VAT to 19% 2022

ANGOLA

• 2022 General State Budget Law is approved – VAT for certain food products reduced from 14% to 7%
• VAT exemption on goods to mitigate natural disasters and pandemics, 7% for certain hotel and catering services, 7% rate reduction for specified food and agricultural inputs

CABO VERDE

• VAT reduction from 15 to 8% in electricity and water enters into force from January 1, 2022

EQUATORIAL GUINEA

• VAT rates in Equatorial Guinea

GHANA

• Ghana’s new VAT Regulations for textile manufacturers

MOROCCO

• 10% reduced VAT rate for accommodation operators and photovoltaic panels

SOUTH AFRICA

• The effect of changes in the value-added tax rate on tax compliance behaviour of small businesses in South Africa: a field experiment

UGANDA

• Non-profit organisation has called for the VAT on electricity to be reduced

AMERICAS

BAHAMAS

• IMF Suggests Increasing VAT Rate to 15%
• The Bahamas VAT Rate Reduced from 12% to 10%

GRENADA

• Grenada Introduces Zero VAT Rate and Environmental Levy Exemption for Electricity Consumption

SAINT LUCIA

• VAT rates in Saint Lucia

UNITED STATES

• Alabama Manufacturer Requests Reduced Machine Rate
• Bipartisan Bill Would Cut Washington State’s Sales Tax for the First Time in Nearly 40 Years
• California Clarifies Sales Tax for Mixed Newspaper Subscriptions
• Florida Sales Tax Compliance Rates And Exceptions
• Sales tax rate changes for 2022
• Why Sales Tax Rates Might Start Decreasing Across the US

ASIA-PACIFIC

BANGLADESH

• FBCCI seeks withdrawal of VAT on utility bills

INDIA

• 46th GST Council Meet: Existing rates in textile sector to continue beyond January 1, 2022
• 5% GST on Marine Engines and Spare Parts: AAR
• ACMA seeks uniform GST rate of 18 per cent on all auto components
• Confusion surfaces over GST rate on cheese balls
• Demand to cut GST on scrap from 18% to 5%
• Footwear traders oppose GST hike, seek rollback
• Govt to go slow on GST rate rationalisation exercise
• GST @ 12% chargeable on supplying, operating, and maintaining air-conditioned electrically operated buses with ITC
• GST on smartphones should be lowered to 12% from 18% – ICEA
• Karnataka government reduces VAT on aviation turbine fuel to 18%
• New GST rates on textile likely from January 1, 2022
• Now, AAAR rules ready-to-eat fryums papad to draw 18% GST
• Tax Break on Ethanol: Govt reduces GST from 18% to 5%

INDONESIA

• Govt extends VAT cut on new homes but reduces amount
• Indonesia to introduce new tax breaks on property, car sales
• Indonesia VAT to rise to 15%?

LAOS

• Laos cuts VAT to 7%

PAKISTAN

• Govt to slap 17% GST on 140 goods
• Notification amending sales tax rates for specific petroleum products
• Sales tax slashed on local electric vehicles

PHILIPPINES

• Implementation of VAT zero-rating, exemption provisions for registered export enterprises

SINGAPORE

• 5 FAQs on Singapore’s GST hike: KPMG’s Viewpoint
• HSBC Says Singapore to Raise GST Incrementally Over 2023-2024
• Singapore to ‘start moving’ on planned GST hike as economy recovers: PM Lee

SRI LANKA

• 2022 Budget: VAT rate charged on supplies of financial services to 15%, scope of VAT exemptions is amended

TAJIKISTAN

• Reduction in the standard VAT rate to promote cashless payment in transactions
• Tajikistan cuts VAT to 13% by 2027
• VAT Rate Decrease as of Jan 1, 2022

VIETNAM

• Ministry of Finance releases draft decree on VAT rate reduction
• VAT for goods and services currently subject to the rate of 10% is reduced to 8%, applicable from 1 February 2022 to 31 December 2022
• Vietnam COVID-19 VAT cut to 8% on key supplies

 

EUROPE

ALBANIA

• VAT reduced rate for sale of agricultural inputs (10%) instead of the VAT exemption

AUSTRIA

• Amendments in VAT Act in response to COVID-19: 0% VAT on the supply of Protective Masks extended until 30 June 2022

BELGIUM

• Circular 2022/C/2 on the extension of the temporarily reduced VAT rate for mouth masks and hydroalcoholic gels
• Proposal: Temporary VAT reduction from 21 to 6 % on energy to reduce the price for consumers

BULGARIA

• Bulgaria announced reduced rate extended until the end of 2022

CYPRUS

• Temporary reduction of VAT rate for certain supplies of electricity

CZECH REPUBLIC

• VAT guidance regarding electricity and gas, and for tour operators

ESTONIA

• Ministry of Finance against the reduction of VAT on books and newspapers

EUROPEAN UNION

• 2022 VAT Rates in Europe
• COVID-19: Commission decides to extend customs and VAT waiver
• EU consumers to benefit from reduced VAT rates on bikes and e-bikes
• EU Two new European Citizens’ Initiatives – The Green VAT – An EU Green VAT to stimulate sustainable and eco-friendly products and services
• EU VAT Committee: WP 1017 Spain – Application of a reduced VAT rate to certain supplies of electricity
• EU VAT Committee: WP 1030 Poland – Reduced rate of VAT for supplies of electricity and district heating
• EU VAT Cuts Prompted by Energy Price Hikes Seen as Ineffective
• EU VAT Rate Database made available by the European Commission
• European Commission: EC: The reduction of VAT on food will be possible soon
• Flashback on ECJ Cases C-384/01 (Commission vs. France) – VAT reduced rates lower than the general rate can be admitted if it does not vulnerate the principle of neutral fiscality
• Flexibility, equality, modernity and harmonisation are key to delivering a compromise solution on EU VAT rates rules, writes Olivier Chastel
• Lower VAT for online events? Here’s why it matters.
• More VAT rates in the EU: Less distortion of competition?
• Reform of (reduced) VAT rates from 2025 – 12 percent on everything?

FRANCE

• How is VAT in France calculated in gift baskets with mixed products?

GERMANY

• Germany MOF Extends VAT Relief for Catering Services Due to Coronavirus
• Greenpeace calls for higher VAT on meat products in Germany
• VAT rate for digital media according to § 12 paragraph 2 number 14 sales tax law (UStG)
• VAT rate for provision of food and beverage services in a shopping center

GREECE

• Covid-19: Extension of reduced VAT rates until June 30, 2022
• Extension of reduced VAT rates till June 30, 2022 and permanent reduced VAT rate for animal food
• Government may reduce VAT in some products to contain surging costs
• Greece next to cut VAT to alleviate inflation effects
• No Plans to Lower VAT Rates, Greek FinMin Says
• Reduced VAT rates apply at 6% on certain health-related goods and 13% on art objects, collections or antiquities.

ITALY

• 2022 Budget: Plastic tax delayed, VAT rate on feminine hygiene products is reduced from 22% to 10%
• Clarification 35/2022: VAT rate for boxes containing ingredients for the preparation of meals – art. 16 DPR n. 633 of 1972
• Clarification 850/2021: Online subscription databases – reduced VAT rate of 4 percent
• Italy cuts domestic gas to 5% for start of 2022
• Ruling 51/2022: Surgical glue – medical device – Ordinary VAT rate
• Standard VAT rate for in vitro diagnostic tests for narcotic drugs and psychotropic substances, and not aimed at combating Covid-19
• Supply of kits for the preparation of meals: which VAT rate applies

LATVIA

• Latvia’s governing coalition parties discuss cutting VAT on energy from 21% to 5% to stem rising energy costs
• Latvian parliament rejects opposition deputies’ proposal to temporarily reduce VAT for electricity
• On 1st January 2022 VAT on books, news websites, etc will be reduced from 12% to 5%, and on e-books from 21% to 5%

LITHUANIA

• Lithuania Proposes to Reduce VAT Rate for Food Used for Special Medical Purposes

MALTA

• Cut VAT to 7% for bars and restaurants as COVID cases rise, PN says

MOLDOVA

• Deadline for applying 6% VAT rate for HORECA sector extended until March 15, 2022

 

MONTENEGRO

• Reduced VAT rate of 7% for supply of services related to preparation and serving of food and beverages

NETHERLANDS

• 9% VAT for online sports lessons from gyms
• Aphrodisiacs subject to standard VAT rate
• Energy suppliers warn: a VAT reduction from 1 February is unfeasible
• No reduced VAT rate for a platform where individuals can resell tickets
• Rabobank: separate zero VAT rate for fruit and vegetables has many issues
• Reduced rate for event with lectures
• Rickety ICT tax authorities inhibits introduction of zero VAT rate on fruit and vegetables
• Standard VAT rate (21%) for granting access to a men-only sauna

NORWAY

• VAT rates for 2022

POLAND

• 0% VAT on natural gas, electricity and heat
• Consent of the European Commission for a zero VAT rate on food in Poland
• Extension of the 0% rate for the import of goods purchased for the purpose of combating COVID-19
• Poland will most likely implement reduced VAT rates
• Temporary VAT reduction from February 1
• The government is proposing a reduction in VAT on food, energy and fuels
• VAT reduction passed. Nobody was against
• Zero VAT on basic groceries from February 1, 2022?

ROMANIA

• Reduced VAT Rate for Heating Supplies as of Jan 1, 2022 till March 31, 2022
• Romania considers zero VAT on food as inflation rises
• Romania Extends Reduced VAT Rate to E-Books
• Romania to lift cap for 5% preferential VAT rate on residential properties
• Romanian Govt. ponders 5% preferential VAT rate for energy after April

SLOVENIA

• COVID-19: VAT exemption for medical supplies extended till June 30, 2022

SPAIN

• Extension of the reduced VAT rate of 10% for electricity till April 30, 2022
• Extension super-reduced rate 4% surgical masks to 30 June 2022
• Government approves the extension of the tax cuts for electricity and the super-reduced VAT rate of 4% for masks
• Tax measures to compensate for increase in electricity prices extended

SWITZERLAND

• Increase in VAT rates expected as of 1 January 2023 (?)
• Proposed VAT rate increase, to fund Swiss pension system
• Swiss referendum on 2023 VAT rise to 8.1%
• VAT to stabilize Swiss Old Age Insurance – VAT rate increase coming?

TURKEY

• Turkey Extends VAT Reduction for COVID-19 Vaccines and VAT Refund for Manufacturing Construction Works
• Turkey Tax Agency Updates Special Consumption Tax Rates on Fuels

UNITED KINGDOM

• Boris Johnson risks losing Tory voters by keeping VAT on energy bills, poll reveals
• Boris Johnson U-turns over VAT on energy bills
• Boris told to use Brexit freedoms to scrap VAT on energy bills
• Rishi Sunak considers lowering VAT and providing a cash boost to pubs and restaurants
• UK considers cut on domestic energy reduced VAT rate from 5% to 0%

 

MIDDLE EAST

BAHRAIN

• Bahrain Publishes Law Increasing VAT Rate to 10% from 2022
• Bahrain VAT increase transitional rules
• FAQ: Transitional provisions relating to the VAT rate change
• More shops, restaurants shut down for exploiting increase in VAT
• Small traders in Bahrain feel pain of updating VAT
• VAT Return filing manual – Transition period of the standard VAT rate change

IRAN

• 9% VAT on Agrifood Imports as of Jan. 3

OMAN

• Oman to hold out and not raise VAT

SAUDI ARABIA

• Forecasters see Saudi inflation in 2020 below 2%, given no change in VAT
• Saudi Arabia to review increase VAT rate – eventually