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13 November 2024

In the e-commerce field, the importance of Value Added Tax (VAT) in Italy is self-evident. 

For e-commerce operations within Italy, understanding and adhering to VAT regulations are crucial as they directly impact product pricing, cross-border transactions, and customer relationships. 

If you plan to expand your business into Italy, it’s essential to comply with local tax regulations. 

VAT in Italy 

Value Added Tax (VAT) in Italy is a consumption tax applicable to goods and services sold within the country. 

Its rates vary based on the classification of goods or services and generally include standard rates, reduced rates, and super reduced rates. 

Cross-border e-commerce especially needs to accurately calculate and collect VAT, clearly state the tax amount on sales invoices, report regularly, and pay taxes. 

Furthermore, if an e-commerce business’s total sales in Italy exceed a certain threshold, registration and taxation in Italy are also required. 

VAT Registration in Italy 

Your business must register for VAT if it meets the following conditions: 

  • Non-Italian businesses must register for VAT. 
  • Businesses with a fixed establishment in Italy: If a business has actual operating locations in Italy, such as offices, factories, or retail stores, it needs to register for Italian VAT. 
  • Cross-border sales: For goods or services sold from outside Italy to inside Italy, if the sales exceed a certain threshold, VAT registration in Italy is required. 
  • E-commerce businesses: According to EU VAT regulations, for goods and services sold within the EU, if an e-commerce business’s sales exceed specific thresholds, VAT registration in Italy is necessary. 
  • Remote sales within the EU: Refers to the sale of goods or services from one EU member state to another. If sales exceed specific thresholds within the EU, VAT registration in the target country is required. 

If you are unsure whether you need to register for VAT and the registration thresholds, please consult our team

VAT Rates in Italy 

  • Standard rate – 22%: Applies to most goods and services. 
  • Reduced rate – 10%: Some food, water; transport industry; construction industry; hotel accommodation; restaurants; and wastewater treatment, etc. 
  • Reduced rate – 5%: Some specified food items; social services, etc. 
  • Reduced rate – 4%: Some specified food items; specific books; social housing; construction work, etc. 
  • Exempt – 0%: Tax-exempt imported goods; international transportation. 

What’s Next? 

Once you confirm your business needs to register for VAT, you need to determine whether your business requires a fiscal representative. 

Generally, non-EU businesses selling in Italy require the assistance of a fiscal representative for registration and declaration. 

Once your business obtains a VAT number, strict compliance with tax regulations is necessary. 

Additionally, you need to retain all sales data and file declarations within specified timeframes. 


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4 November 2024

If you are running a business and planning to expand into France, there are some tax considerations to keep in mind. 
On one hand, you need to address VAT issues to ensure compliance with French tax regulations. 
On the other hand, France plans to officially implement electronic invoicing and undergo a comprehensive reform starting next year. 

French VAT 

For businesses outside of France, once you start trading locally, you will need to register for VAT. 

EU businesses making remote sales to French consumers must be aware of the VAT registration threshold. 

According to current regulations, the VAT registration threshold is €35,000 per year. 

The standard VAT rate in France is 20%, applicable to most goods and services. 

 

Do You Need a Local Fiscal Representative? 

Our clients often find this question puzzling; the answer depends on where your company is registered. 

If your business is based in an EU member state, you do not need a local fiscal representative or agent in France. 

However, if you are a non-EU business, you will require a fiscal representative who bears joint liability. 

Once your business confirms VAT registration, the fiscal representative will need to assist with the registration and filings. 

Compliance with French VAT 

When a business obtains a VAT number, it must take on and adhere to the corresponding responsibilities. 

  • Stay updated on the progress of France’s electronic invoicing reform to comply with VAT electronic invoicing standards. 
  • Maintain financial records for at least 10 years, with as much detail as possible. 
  • Use approved foreign currency exchange rates. 
  • Submit VAT returns on time (the frequency varies depending on the circumstances). 
Amazon

 

What can we do for you? 

As a tax partner for Amazon, we provide VAT services across multiple countries. 

Our tax experts hail from five major language areas, so you need not worry about communication barriers. 

Our free consultancy service can tailor solutions to your specific situation. 

Our tax team will help you minimise penalties and avoid complications. 

Contact our experts to support your global business expansion journey. 


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25 October 2024

German VAT (Value-Added Tax) plays a significant role in the financial operations of businesses and consumers within Germany.

As an accounting firm, we understand that companies trading or investing in Germany must fully comprehend and comply with this tax system to ensure financial compliance.

If your business plans to trade or is already trading in Germany, there are several important aspects you’ll need to be aware of.

German VAT

Germany introduced its VAT system in 1968, and it has continued to evolve.

Currently, the EU standard VAT rate applies at 19%, with special rates (7%) and exemptions (0%) for specific products and services.

Additionally, the German VAT system offers simplified reporting processes for smaller enterprises, making compliance more manageable.

If you plan to sell goods or services in Germany, it’s crucial to assess whether VAT registration is required.

VAT Registration in Germany

For businesses outside of Germany, VAT registration is mandatory if you intend to engage in local transactions.

Remote sellers (e.g., internet sales) must register for VAT if their annual sales exceed €100,000.

Other cases that require VAT registration include:

  • Importing goods into Germany
  • Transporting goods within Germany or across EU member states
  • Trading goods within Germany
  • Storing goods in a German warehouse

The Registration Process 

To register for VAT in Germany, follow these steps: 

  • Confirm whether your business must register for VAT. Registration must be completed before any transactions occur to avoid penalties. 
  • Appoint a local fiscal representative (for non-European businesses) to manage tax reporting on your behalf. 
  • Submit the required documents, including company statutes, to apply for VAT registration. 
  • Once your documents are complete, the usual waiting time for a VAT number is about one month, though delays of 4-5 months are currently common due to system issues. 
  • Fulfil your VAT obligations by submitting VAT returns as required. 

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23 October 2024

UK VAT 

VAT (Value Added Tax) is a tax applied to most goods and services sold in the UK. Different countries have varying VAT rules. 

The current VAT registration threshold in the UK is £90,000. Once your turnover exceeds this in any 12-month period, VAT registration is mandatory. 

Businesses that don’t meet this threshold can still opt to register voluntarily, which includes regular VAT returns and payment of any due VAT. 

 

UK VAT Rates 

There are three main VAT rates in the UK: 

  • Standard rate: 20% – applies to most goods and services. 
  • Reduced rate: 5% – applies to certain products like children’s car seats and solar panels. 
  • Zero rate: Some goods and services, such as healthcare, education, and financial services, are VAT-exempt. 

 

Advantages of Registering for UK VAT 

  • Once registered, your business will be issued a VAT number, which enhances credibility. 
  • Simplifies cross-border transactions, especially if both businesses are VAT-registered, avoiding complex tax procedures. 
  • Enhances efficiency and transparency in financial management. 
  • Improves cash flow management, potentially assisting with short-term liquidity needs. 
Amazon

How We Can Help? 

Whether you are registering for VAT voluntarily or due to mandatory requirements, our team is here to assist. 

If you are an overseas company, our international team can provide multilingual support, so you don’t need to worry about language barriers. 

In addition to VAT registration, we offer ongoing filing services in line with the respective country’s requirements. 

 


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6 June 2024
Child Benefit Payment Delays

Cost of Living Support

HMRC Reminds Landlords of Tax Changes

Reform UK Proposes “Employer Immigration Tax”


Child Benefit Payment Delays

This week, due to HMRC technical issues, nearly half a million people were unable to receive their Child Benefit payments.


HMRC has advised affected customers not to contact them and will provide updates online.


The relevant department has stated that the specific time of payment remains uncertain.


Currently, it is advised that users wait patiently and check their account balances frequently.



Cost of Living Support

This summer, several family support funds are being expanded, amounting to over £2,000.


Families in certain areas can receive up to £500 for daily expenses.


Leeds will provide £100, Stockport has £315 available, South Ribble offers £350, and Lancashire will provide £250.


East Riding £200, Shropshire £400, and Waverley has £550 available.



HMRC Reminds Landlords of Tax Changes

If you rent out your property on Airbnb or other rental platforms, please note the changes in UK tax policies.


The UK will abolish tax relief for furnished holiday lettings.


This means that affected landlords will need to pay more income tax and consider the cost implications.


HMRC urges all landlords to closely monitor rental property tax policies and ensure tax compliance.



Reform UK Proposes “Employer Immigration Tax”

Recently, the UK Reform Party proposed the introduction of an “Employer Immigration Tax” to encourage UK businesses to reduce their reliance on “cheap labour”.


The plan requires most employers to pay an additional 20% National Insurance when hiring overseas labour.


Healthcare workers, caregivers, and employers with fewer than five employees will be exempt.


The proposal has sparked significant public debate, although it has not yet been adopted or scheduled for consideration.



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4 June 2024
The UK general election is scheduled for 4th July, and post-election, various political parties are expected to intensify tax investigations.


Both the Labour Party and the Tory Party have proposed plans to increase tax investigations.


Additionally, there will be increased funding for HMRC to recruit tax investigators and expand the scope of investigations.



Which Businesses or Individuals Are Likely to Be Investigated?

Self-Employed

Currently, a significant proportion of tax investigations in the UK target the self-employed.


Unlike other businesses, the self-employed must report their annual financial status through self-assessment tax returns.


Typically, they do not have a dedicated accounting team, meaning discrepancies may arise between their tax returns and HMRC’s records.


Furthermore, late payments or random checks can increase the likelihood of the self-employed being investigated.



High Cash Flow Businesses

High cash flow businesses, such as restaurants, pubs, and retail stores, frequently handle large amounts of cash transactions.


Cash transactions are often difficult to track and record, which can lead to underreporting income.


HMRC has historically preferred to initiate random tax investigations in high cash flow industries.


If you operate one of these types of businesses, ensure that you retain all financial records for at least six years.



Multinational Companies

Multinational companies, often with operations in other countries, have become a primary focus for HMRC in recent years.


HMRC currently has a substantial team dedicated to international tax issues for multinational corporations, despite longer investigation periods.


Due to their presence in multiple jurisdictions, these companies can allocate financial expenditures across different countries, reducing taxable income in the UK.


As a result, multinational companies are more likely to trigger UK tax investigations.



Businesses with Frequent Changes in Registration Information

Businesses that frequently change financial personnel or registration information may be seen as attempting to evade tax responsibilities.


Such changes can lead to instability in financial records and reporting, thereby increasing the risk of being investigated.


HMRC might view these changes as efforts to conceal financial and tax issues, prompting a tax investigation.



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31 May 2024
Some UK Households to Receive Up to £100 in Subsidies in July

Scotland Guarantees No Tourist Tax Until 2026

UK Diesel Prices Lead in Europe

VAT and Other Tax Issues Become Election Hot Topics


Some UK Households to Receive Up to £100 in allowance in July

Leeds City Council plans to allocate £7.09 million to support local households.


65,000 households in Leeds that apply for allowance will receive payments from the council in July.


Households without children will receive a £25 subsidy, while those with children will receive £100.



Scotland Guarantees No Tourist Tax Until 2026

Earlier, Scotland voted and passed parliamentary legislation allowing Edinburgh to levy a tourist tax.


However, this new legislation, which will impose a charge on overnight visitors, will not be implemented until 2026.


A public survey initiated by the city council indicates that people generally favour a tax rate of around 5%.


The funds will be used for local infrastructure development, city services, and festival activities.



UK Diesel Prices Lead in Europe

Currently, the average price of diesel in the UK is 155 pence per litre, and the average price of unleaded petrol is 149 pence per litre.


This is following the government’s 5 pence reduction in motor fuel duty in 2022.


According to the RAC, the profit margins of UK retailers are above average.


In other European countries, such as Italy, fuel taxes are the same as in the UK, but diesel prices are lower.



VAT and Other Tax Issues Become Election Hot Topics



This week, the UK Parliament officially dissolved, marking the start of a five-week election campaign.


All parties will present policy proposals and campaign to win the general election.


VAT, National Insurance, and the Digital Services Tax are among the most discussed topics between the parties.


Many parties have already confirmed that if they win the election, they will not increase VAT, ensuring it remains at the current level.



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29 May 2024
Last week, we mentioned that Sunak announced the general election will take place on 4th July.


The focus of this election primarily centres on the Labour and Tory parties.


Considering the varying tax policies proposed by different organisations, we will help you clarify what needs to be done before the election.



Capital Gains Tax

f you reside in the UK and acquire additional capital gains, you might be affected after the election.


Capital gains tax is the tax payable when individuals sell property, businesses, or other assets.


The annual tax-free allowance has been reduced multiple times over two years by the Tory, now standing at £3,000 per year.


Should Labour win the election, they might abolish the tax-free allowance entirely, meaning every penny of your asset sales would be taxable.



Pensions Annual Allowance

The pensions annual allowance is the maximum amount of pension savings that UK residents can contribute each year without incurring extra taxes.


The current standard annual allowance in the UK is £60,000, and the lifetime allowance for pensions has been abolished.


This significantly reduces tax pressure on high earners, allowing them to save more for retirement.


However, Labour might amend the current standard annual allowance and reconsider reintroducing the lifetime allowance.



Changes to Wages

At present, the national minimum wage in the UK is £11.44 per hour, which Labour might further increase if they win the election.


In addition, Labour plans to ban zero-hour contracts and impose stricter controls on employers. Should you have any uncertainties, feel free to consult our team.


Meanwhile, the Tory propose further cuts to National Insurance, providing visible benefits to workers.



Personal Savings

During the election period, the reduction in savings interest rates will be put on hold, meaning the savings rate will remain around 5%.


If you are considering depositing extra funds into a savings account, now is a favourable time.


With the fixed rate remaining around 5% for an extended period, savers will maximise their returns during the election period.



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24 May 2024
Inflation Rate Falls to 2.3%


Primark Clothing Supplier Fined for Tax Evasion


Electric Vehicles to Be Subject to Vehicle Excise Duty from Next Year


Britain’s general election will be held on July 4th



Inflation Rate Falls to 2.3%

This week, the Office for National Statistics announced that the inflation rate for April has fallen to 2.3%.


This is the first time it has reached such a low level since July 2021.


The National Bureau of Statistics stated that the main reason for this decline is the slowdown in the price increases of a range of items, including energy prices.


In response, Rishi Sunak said, “This is an important moment for the economy, as inflation has now returned to normal.”



Primark Clothing Supplier Fined for Tax Evasion

A Leicester-based clothing factory supplies garments to chains such as Primark and New Look.


The factory established a complex network of shell companies to shift VAT liabilities and evade taxes without the knowledge of these brands.


An investigation following a surprise visit by HMRC found that the factory had evaded £1.3 million in VAT.


Ultimately, the two main culprits were sentenced to 3-5 years in prison, and an accomplice was sentenced to 2 years in prison and required to complete 300 hours of community service.



Electric Vehicles to Be Subject to Vehicle Excise Duty from Next Year

The UK Spring Budget has announced changes to Vehicle Excise Duty (VED).


From 1st April 2025, newly registered electric vehicles and low-emission vehicles will need to pay £10 in their first year.


From the second year onwards, this will increase to the standard VED rate (currently £190).


If you are unsure whether your vehicle qualifies as low-emission, you can check using the GOV.UK website tool.



Britain’s general election will be held on July 4

This week Rishi Sunak called a general election for July 4th and will then start campaigning against Keir Starmer.


Starmer said Britain had been waiting for this moment and said it was time to turn the page.


The outcome of the election will affect tax, pension, child care and other programs.



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17 May 2024
– Bournemouth to introduce “tourism tax” from July.

– Gang set up 90 “companies” to gain £800,000 through VAT and financial fraud.

– NAO says taxpayers collectively spent 798 years waiting to speak to HMRC.

– Thousands of drivers facing “sunset tax” .


Bournemouth to introduce “tourism tax” from July

Bournemouth has become the first seaside resort to introduce a “tourism tax.”


From July 1st, 73 large hotels will charge £2.40 per room per night for all overnight guests.


For an average family of four, this will add nearly £34 to the cost of a week’s holiday.


The committee claims the fee will be used to create a clean, green, and safe local environment.



Gang set up 90 “companies” to gain £800,000 through VAT and financial fraud

Recently, HMRC reported a case of VAT fraud and warned taxpayers to beware of new scams.


The gang set up a “recruitment company” and stole job applicant information.


They then listed themselves as directors of fake car dealerships without people’s knowledge and applied for VAT refunds.


The gang has all been convicted and sentenced to over 10 years in prison.



NAO says taxpayers collectively spent 798 years waiting to speak to HMRC

A report from the UK’s National Audit Office shows that HMRC’s telephone communication service is below expected standards.


In the last financial year (2022/23), taxpayers waited an average of 23 minutes, compared to 5 minutes five years ago.


In reality, it’s even more difficult to communicate with HMRC advisers, with calls being automatically disconnected.


NAO hopes for a more practical service plan from HMRC to alleviate taxpayer dissatisfaction.



Thousands of drivers facing “sunset tax”

Denbighshire County Council in North Wales has scrapped its free parking policy.


The council plans to introduce a new “sunset tax,” requiring payment for seaside parking after 5 pm.


For residents and visitors to the town, winter parking will cost £1.50 for two hours and £2 for the rest of the time.


Locals claim this is an absurd charging system and refuse to pay the “sunset fee.”