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VAT News ject to VAT in accordance with the provisions laid down by Art. 1 (4) of the Tax Code, i.e. the difference between, on the one hand, what the creditor receives from the borrower or, where he transfers his rights, from the new creditor and, on the other hand, what he paid to the previous creditor for the acquisition of the rights. From our correspondent Oleg Berezin Deloitte, Russia Singapore On 22 January 2009, the Minister of Finance presented the Budget for 2009 to the parliament. As regards GST, details of the budget are summarized as follows. Deduction by funds Qualifying funds that are managed by a prescribed fund manager in Singapore will be allowed to claim a substantial portion of their input GST on specific expenses during the period from 22 January 2009 to 1 March 2014. International aircraft From 1 April 2009, the zero rate of GST applicable to qualifying aircraft will be extended to include: – all aircraft which are wholly used, or intended to be wholly used, for international transport of goods and passengers, including private aircraft, provided that they are wholly used, or intended to be wholly used, for travel outside Singapore; and – the sale, maintenance or repair of aircraft components or systems, provided that they form part of a qualifying aircraft. A new scheme will also be introduced to facilitate the importation of aircraft components or systems for qualifying aircraft without GST. Temporary removal from GST control With effect from 1 April 2009, GST will be suspended in respect of goods (including wine) temporarily removed from a zero-GST or licensed warehouse for the purposes of being auctioned or exhibited, even if the goods are sold during the auction or exhibition. Suspension of GST applies on the condition that the goods are subsequently returned to the warehouse. Exempt wine With effect from 1 April 2009, a specified quantity of wine for use at approved wine exhibitions and conference events will be exempt from GST. Slovenia Electronic VAT returns and EC sales listing forms From 1 January 2009, all registered taxable persons, regardless of whether they are established within or outside Slovenia, must file their VAT returns and EC sales listing forms through the Internet portal of the tax authorities, called “E-davki”. The tax authorities have issued a new DDV Pravilnik (Ministerial VAT Order) that changed some of the existing provisions. The amendments came into effect on 1 January 2009. The most important amendments are summarized as follows. Accelerated refunds Taxable persons who have the status of “exporter” have the right to receive a refund of excess input tax within 0 days from the date of application, whereas other applicants receive the excess input VAT within 0 days. In order to determine whether a person has the status of exporter, supplies of goods to be assembled or installed in another Member State are considered to be exported for the purposes of the accelerated refunds. At the time of writing, a proposal to shorten the refund period for both exporters and non-exporters to 21 days is under discussion in the parliament. Correction of output VAT Until the end of 2008, suppliers of goods and services were only allowed to correct the amount of VAT charged to their customers on an invoice in the reporting period in which they received a written statement from their customer confirming that he had not claimed the VAT as input VAT or had corrected the input VAT on his VAT return. Provided that the customer states that he has not yet claimed the VAT, the new rules allow the issuer of the invoice to correct the VAT in the reporting period in which he discovered the mistake, which means that, under specific circumstances, the correction can be made earlier. Pro rata In the case that a taxable person, that is using a pro rata on the basis of a provisional proportion, is no longer VAT registered, new rules are added regulating the obligation, the manner and timeframe for the calculation and correction with respect to the final entitlement to input VAT. The old rules had measures for taxable persons making the correction of the provisional proportion at the end of the calendar year and did not cover the situation of correcting this during the year (in which a taxable person also may cease to be VAT registered). From our correspondent Lucijan Klemenčič Ernst & Young, Ljubljana South Africa Compulsory registration threshold With effect from 1 March 2009, the threshold for compulsory VAT registration is ZAR 1 million. Prior to that date, persons with an annual taxable turnover of more than ZAR 00,000 (calculated on the basis of the past 12 months and the next 12 months) were obliged to apply for VAT registration. 1 0 INTERNATIONAL VAT MONITOR MARCH/APRIL 2009 © IBFD
Budget 2009: The 2009 Budget was delivered on 11 February 2009. The proposed VAT amendments which have been announced are outlined below. Voluntary registration threshold Currently, a person carrying on an enterprise may apply for voluntary registration if his turnover exceeded ZAR 20,000 in the previous 12 months. This threshold is aimed at reducing the risk of fraudulent claims for VAT refunds. It has now been proposed that this threshold be increased to ZAR 0,000 from 1 March 2010. VAT fraud False statements made on VAT returns constitute an offence for VAT purposes. It has been proposed that the list of offences be extended to include false statements on any form submitted to the South African Revenue Service (SARS), including application forms for VAT registration. As a further measure to combat VAT fraud, the use of biometric measures to verify the identity of persons applying for VAT registration has been proposed. Company reorganizations Reorganization relief measures were introduced in 200 , which are aimed at ensuring that company reorganizations are neutral for VAT purposes. However, where assets used for mixed purposes are transferred by banks and other companies making both taxed and exempt supplies, difficulties have arisen regarding, inter alia, adjustments of initially deducted input tax based on the change in use, and input tax deduction relating to commissions and legal fees. These issues will be addressed by the SARS in an interpretation note and, if necessary, amendments will be introduced. Late-payment interest Interest is payable where VAT payments are not made by the due date. The SARS may grant full or limited relief for interest due if there is no loss to the state or if there is no financial benefit for the taxpayer. The circumstances under which interest may be remitted will be clarified to ensure consistent application of this concession. From our correspondent Marlene Botes PricewaterhouseCoopers, Cape Town Sri Lanka Following the announcements in the Budget for 2009, which was presented on November 2008, 22 a press release was issued on 29 December 2008 announcing a number of changes to the VAT regime. Although they have not yet officially been legislated, the following changes have come into effect on 1 January 2009 on the basis of an administrative arrangement. The main changes are as follows. © IBFD INTERNATIONAL VAT MONITOR MARCH/APRIL 2009 VAT News Rates The standard rate of 1 % has been reduced to 12%. Goods which were previously subject to the basic rate of % have become either exempt from VAT or subject to the standard rate of 12%. Registration threshold The registration threshold has been increased to SLR 0,000 per tax period or SLR 2. million per year. The threshold for voluntary VAT registration has been increased to SLR million per year. Deduction of input tax The right to deduct input VAT in respect of transactions subject to the rate of 20% is limited to 12%. It should be noted that the budget proposed a 10% ceiling. VAT on the importation of goods can be recovered within a maximum period of two years (previously one year) from the time the customs import declaration was made. Switzerland Free warehouses In the framework of the entry into force of the new Customs Law on 1 May 2007, transitional arrangements were made for so-called free warehouses. During a period of two years, the arrangements applicable under the former Customs Law continued to apply to existing free warehouses, which had the effect that those warehouses continued to qualify as not forming part of the customs territory and, therefore, were also excluded from the territorial scope of VAT. On expiry of the transitional arrangements, on 1 May 2009, free warehouses are considered to form part of the customs territory and are within the territorial scope of VAT. The tax authorities have published an information sheet in which they explain the VAT treatment of transactions carried out in free warehouses, 2 rized as follows. which can be summa- From 1 May 2009, the following new rules apply: – supplies made in free warehouses can give rise to subjective VAT liability, even if the supplies are zero rated; – the simplified import procedure for supplies of – goods from abroad can no longer be applied to supplies of goods that leave free warehouses. However, under certain conditions, a similar procedure with the same effect can be applied, on request; services that are not ancillary to transport and are deemed to be supplied in the free warehouse are no longer zero rated but, instead, subject to the standard rate. 22. See International VAT Monitor 1 (2008), p. 8. 2 . Praxismitteilung “Mehrwertsteuerliche Behandlung der Zollfreilager nach Ablauf der zweijährigen Übergangsfrist” (Notice of 1 December 2008, VAT treatment of free warehouses after expiry of the two-year transition period). 1 1
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