VAT changes 2019

VAT news 2019. Are there any new VAT rates introduced in the EU-countries during 2019? What changes to the VAT come into effect from January 1, 2019? Which goods and services will change VAT in 2019? Which are the changes in VAT-rates for 2019? How many countries will lower the VAT rates on e-books in 2019?

Changes in EU VAT rates 2019

Netherlands raises its reduced VAT rate from 6% to 9%.

Ireland raises the reduced rate of 9% to 13.5% for tourism-related activities. However, VAT on e-books is lowered to 9%.

Poland lowers VAT on e-books from 23% to 5% on April 1, 2019. Digital newspapers are reduced from 23% to 8%. Bakery products receive reduced VAT.

Croatia lowers VAT from 25% to 24% by 2019. VAT on e-books is reduced to 5%.

Hungary lowers the VAT on ESL and UHT to 5% (milk).

Germany makes digital marketplaces responsible for all VAT that is not charged. If you, as a freelancer, sell services in a German marketplace, the marketplace will be able to charge you for VAT that you do not have, or do not know, that you should have added to the sales. Therefore, read about the German VAT rates here.

Czech Republic lowers VAT on various items to 10% with preliminary start on July 1, 2019.

Finland lowers VAT on e-books and e-newspapers to 10% on July 1, 2019.

Lithuania lowers VAT on books to 5%.

Table with the current VAT rates within the EU

Table for digital VAT rates

Selected VAT changes in 2019 in the rest of the world

Iceland lowers VAT from 24% to 22.5%, and e-books and online journals are also reclassified to zero VAT. In other words exempt from VAT.

Norway also lowers VAT on e-books to 0% but from 1 July 2019.

The Canary Islands are part of the EU but outside the EU VAT area. They have a local VAT system and the VAT rate of 7% is reduced to 6.5% in 2019.

Turkey raises VAT on digital publications to 18% on December 18, 2018. If you sell digital services to Turkey then your company must invoice with Turkish VAT to Turkish private customers since 2018.

Russia raises VAT from 18% to 20%. For those of you who sell digital services to Russian private individuals, there will be a VAT increase to 16.67%. New rule for B2B transactions, they are now subject to VAT and VAT registration. Therefore, as a small company, avoid selling electronic services to Russia if you do the accounting yourself.

Japan will raise the VAT level to 10% from 1 October 2019, but will at the same time issue a new level of 8% for food, beverages, and newspapers.

This is, of course, a response to the EU-madness of introducing VAT of recipient country on electronic services – a nightmare in the accounting. Is it realistic to file as many VAT returns each quarter as there are countries in the world? Really? This will be the digital black death of the World, only already big companies can do digital business in the future, no more new startups, no more job-creating which is primarily done by small growing companies…

New VAT rule for vouchers

Certificates of value and so-called vouchers receive changed rules. In addition, single-function and multi-function vouchers are defined in the VAT legislation in several EU countries for the first time.

What is a voucher?

A typical example of a voucher is simply a gift card or gift token. One can also describe it as a proof of payment or a form of securities, something that can be used as, or converted to, money relatively easily. A certificate that shows that something has been paid in advance in other words.

The cards must be issued from January 1, 2019 for the new regulations to apply. The changes do not apply to discount vouchers or money-off tokens and subscription agreements (telephone subscriptions) are not covered by the amendment.

The tax base and the amount on which the VAT is to be calculated is the amount paid for the voucher. So if the voucher value is 29 but you paid 20, the VAT will be calculated on 20.

For a single function voucher, the tax liability has occurred in connection with the sale of the voucher and no adjustment of previously reported value–added tax should be made even if the voucher is not used before the voucher’s expiration date.

New rule for shipments from warehouses in Germany

Germany had prior to 1 January 2019 a so-called simplification rule for deliveries via a warehouse based on German soil. This means that it will now be possible to book and declare a sale of goods from a German warehouse to a German company as a “VAT-free sale within the EU”. Consequently, some none-German companies will not have to be VAT registered in Germany. Prior to 2017, older rules interpretations stated that stock deliveries from German warehouses always required German VAT registration.

Electronic services

The sensational EU-morons in Brussels have crawled to the cross and later realized that they have to change the rules for the sale of electronic services to private individuals in other EU countries. When vast numbers of small businesses already closed their business because it was not worth the trouble to sell downloads within the EU any longer, then the change comes.

Too little, too late, a floor is introduced for when you have to start invoicing with the recipient country’s VAT rate and the seller does not have to follow the customer country’s invoice rules. Really EU-blubber guts, it took you this long to figure this out?

The amendments entered into force on January 1, 2019.

This now applies to those who sell e-services for less than 10000 Euro to EU customers (private customers):

Below the limit, you invoice with YOUR COUNTRY VAT and YOUR DOMESTIC RULES.

You only need ONE proof of which country the customer buys from up to 100000 Euro.

The VAT e-commerce package and the MOSS – What changes on 1 January 2019?

Over this limit, you must register in the MOSS system and invoice with the customer’s country’s VAT rate. The limits of 10000 and 100000 Euro are sales before VAT was applied.

It is allowed to invoice with the VAT of the customer country immediately from the first sale if you wish.

After January 1, 2019, you can unsubscribe from MOSS if you are below the threshold. You will then face a quarantine period of two quarters before you can register again in the system.

The digital-VAT-rates you should invoice with to different EU countries

France introduces extra digital tax

This tax is intended for huge multinational companies such as Google, Facebook, and Amazon, which through sophisticated corporate structures avoid paying taxes which small businesses cannot avoid. It is not reasonable for these giant companies to pay less tax than small SMEs. This tax will be launched sometime past March 2019, if the EU does not jointly declare this digital tax for all EU members.