Daily News 23rd November 2020
VAT News: Saudi Arabia To Review VAT Increase
In July, Saudi Arabia decided to triple their value-added tax from 5% to 15% in reaction to the economic crisis caused by the pandemic. However, the minister of commerce has announced that this policy will be reviewed once the economic crisis is over. The 5% tax was only introduced in 2018.
It has been a particularly tough year for Saudi Arabia. Since they are the world’s largest exporters of crude oil, the oil market turmoil, coupled with the pandemic, has meant that the government have had to introduce a range of new regulations such as increased VAT, increased custom fees and trimmed government aid programmes.
Business News: Britain And Canada Finalize Trade Deal
As Britain prepares to end its transition out of the European Union on Dec. 31, it has negotiated multiple rollover bilateral deals to maintain trade with Canada. Whilst many of these deals simply are an extension of agreements that were already in place, both parties have vowed to start talks on a bigger agreement next year.
With this announcement Britain and Canada have maintained their trade relations, which is a vital step for both countries’ respective foreign agenda. Undoubtedly Britain will use this deal in an attempt to form closer ties to the CPTPP agreement, and Canada will likely use the regulations in order to form a similar deal with the EU. Canada is Britain’s fifth biggest trade partner after the US, China, Mexico and Japan.
E-commerce News: Austria To Record Double Digit Growth For The First Time
For the first time ever, E-commerce is set to make up 11% of the total retail sales in Austria. Due to the Coronavirus, e-commerce in Austria has had to undergo a fundamental and structural change, as consumers leaned more on e-commerce due to the impact of the pandemic and retailers had to digitalize.
This news comes from the EHI Retail institute and Statista who analyze the top 250 best selling business-to-consumer online shops in Austria. The current stats show that the top 10 of online shops in Austria account for 49.7% of the top 250’s sales. Sites in the top 10 include Amazon and Zalando.
Daily News 24th November 2020
VAT News: Saudi Arabia VAT To Remain For Short Term
Whilst reports yesterday suggested that Saudi Arabia were going to review their VAT increase after the pandemic, their finance minister has come out to clarify that this change will not be reconsidered in the short term. The minister said that the decision had been “difficult” to increase the tax, but will remain in place for the foreseeable future.
For those involved in cross border transactions, it is worth knowing that services provided by Saudi-based companies to those based outside the kingdom are in principle subject to zero VAT. However, exceptions apply and the tax authority looks closely at taxpayers applying the zero rate of VAT. In case the zero rate does not apply, the non-resident company cannot get a refund for the VAT incurred as per the above.
E-commerce News: E-money License Given To JoomPay.
JoomPay, a social finance app, has obtained an electronic money license in Luxembourg. The application has been created by Joom, the Latvian online marketplace. The mobile app allows money transfers, even if only one party has the app, and the only information needed is a phone number or email address of the recipient.
The instant payments market is growing fast. In Europe, the volume is worth over 2.5 trillion euros and is predicted to grow to more than 15 trillion euros by 2025. And it’s West Europe that’s driving innovation and will account for 38%of the instant payment transaction value within five years.
E-commerce News: Alibaba Welcomes Chinese Regulation
China’s increasing oversight of internet platforms is both “timely and necessary”, Alibaba Group CEO Daniel Zhang told the World Internet Conference on Monday. Zhang said Chinese internet companies had moved to the forefront of the global industry with the help of government policies, but regulations need to evolve.
Alibaba’s e-commerce marketplaces and payment services are also expected to face greater oversight under the draft rules published on Nov. 10 by China’s market regulator, which said it wanted to prevent platforms from dominating the market or from adopting methods aimed at blocking fair competition. These regulations should help to increase the efficiency of Chinese e-commerce.
Daily News 25th November 2020
VAT News: Italy To Introduce E-invoicing To Cross-Border Trade
Italy is to extend its SdI e-invoicing regime to cross-border invoices, and will withdraw the requirement to complete an Esterometro return. This will apply from January 2022. From 2022, sales invoices issued to non-residents must be reported through SdI within 12 days of the invoice. Purchase invoices received from non-residents must be submitted by the 15 days of the following month.
For those involved in cross border transactions, expect to see this trend spread to other countries. E-invoicing is cheaper, faster, and more environmentally friendly, thus it is likely to become more and more common over the next couple of years.
E-commerce News: Parcel Platform Paack Raises €44 million
The Spanish start-up has accelerated its growth by raising 44 million Euros. This will allow the delivery company to expand its coverage across Europe, where it is already present in over 60 countries in a range of countries, including the UK, France and Portugal.
Paack are responsible for handling the packages for the ‘last mile’ for e-commerce companies such as El Corte Ingles and Amazon. Their main selling point is that they are able to deliver parcels for next day or even same day delivery. They currently have over 3,000 couriers.
Business News: PM Warns Britain Won’t Budge On Fishing
British Prime Minister Boris Johnson said on Wednesday the European Union needed to accept the reality that Britain must control access to its waters if the two were to make progress in Brexit talks on fisheries. These comments come as both sides claim they are optimistic for a deal, but are preparing for a No-Deal Brexit.
As the deadline of December 31st edges closer, it seems that the two sides still cannot agree on the access of British waters. There is still some way to go until an agreement is reached on the ‘level-playing field’ also. Whilst these issues may not be resolved before the deadline, it is likely that some sort of deal that includes plans for future discussions on these issues will be made.
Daily News 26th November 2020
VAT News: Isle Of Man VAT Returns Must Be Submitted Electronically From April 2021
VAT-registered businesses and individuals from the Isle of Man will be required to submit VAT returns online and make payments electronically from 1 April 2021. Customers who are not currently enrolled for VAT Online Services will automatically receive a letter with an activation code with their next VAT return.
Three-quarters of Value Added Tax (VAT) returns are currently submitted electronically using the Isle of Man Government’s Online Services. It will become mandatory to submit this way from 1 April 2021. This change will make interactions more efficient and environmentally friendly.
E-commerce News: Bevh Wants Retail And Logistics To Work On Sundays
The German E-Commerce and Distance Selling Trade Association (Bevh) wants a temporary lifting of the ban on Sunday work in retail and logistics. The association thinks that, especially with regards to the upcoming Christmas shopping period, this is necessary to stop the spread of the coronavirus.
Germany is currently in a ‘light’ lockdown, but it seems inevitable that restrictions will become more strict. If retail shops were able to open on Sundays, this would lift the load on ecommerce stores somewhat and also ensure that shopping was more spread out, lessening the possibility of coronavirus being passed around . Bevh are also asking from the use of Click & Collect to be greatly increased.
Logistics News: Rush To Stockpile Goods Causes Sharp Increase In Cost
According to industry sources, British businesses are hurrying to stockpile goods five weeks before post-Brexit customs checks come into force on Jan. 1, driving up the cost of cross-border deliveries and cutting capacity. Logistics companies are being overwhelmed by the demand for shipments and help navigating the new rules that will come into effect from the beginning of next year.
The increased demand has pushed prices up by around 20% in recent weeks and will likely rise further in December. Indeed, the cost of journeys between Poland and England, and France and England, have risen by more than 10%. The frantic activity is clearly due to British businesses attempting to prepare for Brexit.
Daily News 27th November 2020
VAT News: European Tax Administrations and the European Commission Hold Summit
TADEUS, the yearly summit held by the European Tax Administrations and the European Commission, was held yesterday. The meeting was focused on addressing the challenges presented by the pandemic, and establishing the priorities for dealing with these issues.
This year’s meeting particularly focused on tax compliance, on the need for administrative cooperation and improved coordination of the development of intra-European IT systems. Tax administrations have a prominent role to play, not only in delivering support and services during the COVID-19 crisis, but also in ensuring the resilience of Member State and EU budgets.
VAT News: Online Market Places To Settle VAT for Sellers In Poland
The Polish government is currently working on an ‘E-commerce Package’ which will constitute a major reform for the payment of VAT. The most significant change is the burden of settling VAT will now rest on the shoulders of online market places.
This is a change that we saw announced earlier in the week for Britain also. It seems countries are now placing more pressure on Online Marketplaces to be responsible for VAT. In the case of Poland, the obligations will even apply to social networking sites and auction portals.
VAT News: Vietnamese E-invoicing Delayed
The Vietnamese e-invoicing mandate has just been officially postponed from 1st November 2020 until 1st July 2022. Taxpayers will therefore remain in the transitional period, during which they are still allowed to use paper invoices and current invoicing rules.
The movement to e-invoicing is one we are seeing across the globe, and is likely to become the main way of submitting of invoices over the next couple of years. Not only is the current system less environmentally friendly, but it is also more fraud-prone, and creates a big burden for tax administrations.