Turkey: changes in relation to the Electronic Record Keeping Requirements and e-invoicing

Electronic Record Keeping Requirements

The Turkish Revenue Administration (TRA) has introduced the Electronic Record Keeping Obligations by issuing the Tax Procedural Law General Communique no. 431 on 29 December 2013. As a result, since 1 January 2015 certain Turkish taxpayers (from petroleum and tobacco products market) are obliged to create and keep their records in one of the certain formats (xls, xlsx, txt, csv or xml). The application of the requirements relates to sales, purchase, inventory, import, export, production and other records. The Turkish Tax Authorities can request the files with the records in certain format in case of the audit.

E-invoicing

In March 2010, Tax Procedural Law General Communiqué no. 397 was officially published and e-invoicing became available in Turkey. Later, with the publication of Communiqué no. 421, taxpayers with a gross sales revenue of 10 million TL and above for 2011 or onwards accounting period, taxpayers that import or sell petrol products, alcoholic beverages and tobacco products are mandated to comply with this application.


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Contact

Kinga Zawora
PwC Zürich
+41 58 792 2262
kinga.x.zawora@ch.pwc.com

Changes to legislation governing Swiss VAT liability

Swiss VAT law places new obligations on foreign companies

The partial amendment to the Federal Law on Value Added Tax (VAT law) will impact companies not established in Switzerland from 1 January 2018. Businesses which are not based in Switzerland but provide supplies vis-a-vis Switzerland may be liable to pay Swiss VAT. This will apply in instances where a foreign company generates turnover in Switzerland, in other words in cases where Switzerland is the place of supply for the purposes of VAT. The following information outlines the VAT situation in Switzerland today and in the near future.


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If you have any questions, please get in touch your usual PwC contact person or our expert

Julia Sailer
Director
Leader VAT compliance Switzerland
Tel. +41 58 792 44 57
julia.sailer@ch.pwc.com

Additional Languages for this report

German
French
Italian

Poland to introduce Standard Audit File for Tax (SAF-T) as from 1 July 2016

As from 1 July 2016 some VAT taxpayers in Poland will have to comply with an additional reporting requirement, i.e. to produce a file detailing specific information about the business of the taxpayer to provide it electronically to the Polish tax authorities for audit purposes upon their request.

This file will need to be provided in a specific format defined by the Polish tax authorities and thus is called Standard Audit File for Tax (SAF-T) or in Polish, Jednolity Plik Kontrolny (JPK).

The VAT taxpayers which will be first asked to put together and provide the JPK to the Polish tax authorities are taxpayers whose personnel exceeds 250 employees and whose yearly turnover exceeds EUR 50’000’00, irrespective of whether they are established in Poland or not. This has been explicitly confirmed in the final version of the regulation introducing JPK into the Polish tax legislation, i.e. foreign businesses not having any presence in Poland (i.e. branch and/or fixed establishment) but being registered for VAT in Poland by reference to the nature of their supplies also fall within the scope of the above reporting requirement, provided that the size of their business meets the above conditions.

Specifically, JPK needs to include the following information:

  • Accounting books;
  • Bank statements;
  • Warehouses (receipt, release and internal movement transactions);
  • VAT evidence (details of the sales and purchases);
  • VAT invoices;
  • VAT revenue and expense ledger;
  • Records of revenues.

It is expected that the first requests to put together and provide JPK will be made by the Polish tax authorities in September 2016.

Other taxpayers (i.e. having more than 9 employees and turnover exceeding EUR 2’000’000) will fall within the scope of the above regulation from 1 July 2018.

Conclusion and recommendation for actions

Bearing in mind that the first requests for JPK will be sent out in September 2016, there is still some time to prepare for both groups of taxpayers (i.e. for those who can receive the request for JPK post 1 July 2016 as well as for those who may receive it post 1 July 2018).

Specifically, the taxpayers should undertake a review of their systems and the quality of the data that they can currently extract from their systems and map it to the requirements of JPK to identify the level and/or lack of compliance with the above regulation.

PwC has a group of experts experienced in assisting taxpayers in reviewing systems from the SAF-T perspective and building in SAF-T concepts into the systems. We will be happy to assist you.

Know your international VAT specialists

 

 

Claims handling services should be taxable for VAT purposes – CJEU decision in Aspiro (C-40/15)

The Court of Justice of the European Union (CJEU) confirmed in its recent judgment (Aspiro, C-40/15) that insurance claims handling services should be taxable for VAT purposes. This decision is in line with the current practice and/or rules in a number of Member States (e.g.  Germany, France), however, it is likely to place a greater focus on the VAT treatment of insurance related services in countries which to date, have widely applied the VAT exemption to insurance related services (e.g. the UK).

Background

Aspiro provided claim handling services (i.e. receiving and processing claims and damages covered by insurance, contacting the insured person to conduct any inspection to determine the causes and circumstances of an accident, preparing expert damage reports, dealing with appeals and complaints regarding claim handling and administrative and technical tasks related to these activities).

It had only a legal relationship with the insurer who engaged Aspiro to provide the above services in the name and on behalf of the insurer, i.e. Aspiro did not have any contractual relationship with the insured, however it dealt directly with them.

Aspiro considered its activities to be VAT exempt insurance services on the grounds that they are a key element of the business of the insurance company.

Decision

The court considered two routes to a VAT exemption, i.e. services being a part of an insurance service and insurance related services typically performed by insurance agents and/or brokers. Having done so, it concluded that the services provided by Aspiro did not represent either of the services leading to a VAT exemption. This was because Aspiro did not have a contractual relationship with the insured (key condition supporting the characterization as an insurance service) nor undertook the role of finding prospective clients to introduce them to the insured with the view of concluding an insurance contract (key condition supporting the characterization as an insurance related service).

Conclusion and recommendation for actions

As noted above, we anticipate that the above decision will give rise to a review of the scope of the national VAT exemption for insurance related services especially in the countries with a broader scope of the application of the  above VAT exemption. Thus, insurers and their suppliers should carefully review their service arrangements and assess the impact of the potential changes (i.e. limited scope of the VAT exemptions) in terms of potential higher VAT costs for the insurers as well as opportunities to maximize input VAT recovery for the suppliers.

Finally, there may be scope to consider the claims handling services to be VAT exempt if they are provided as a part of single supply together with insurance intermediation (Aspiro did not deal with this matter explicitly).

We would have happy to assist in conducting the above analysis.

For further information, please contact: 

Tobias Meier Kern                                                                    Marcella Dzienisik

Director                                                                                          Manager

Tobias.meier.kern@ch.pwc.com                                      Marcella.dzienisik@ch.pwc.com

+41 58 792 4369                                                                           +41 58 792 4938

Event – Taxmarc: your cure for the SAP VAT headache

Handling VAT isn’t getting any easier. As if it wasn’t hard enough to ensure the compliant tax classification of transactions, you also have to enter them in SAP. Given that SAP’s tax determination logic was developed 30 years ago at a time when the legislation governing cross-border transactions was far less complex and the reporting requirements a lot less comprehensive, it is no wonder this is a headache for many of our clients.

At our half-day seminar on 21 April we want to show you PwC’s cure for the SAP VAT headache. Our new technology solution, the Taxmarc add-on for SAP, enables you to deal with the problems efficiently in a language users understand.

We will be showing you how you can use Taxmarc to automate your VAT determination and processes and overcome the potential limitations of your SAP system. Among other things you will learn

  • How to automate (complex) incoming and outgoing VAT transactions in your SAP system
  • How to establish an integrated control framework to check whether the VAT treatment of each individual transaction is correct and consistent
  • How to establish and change the tax codes (including extension of tax codes to three characters) flexibly
  • How to handle your VAT, European Sales List and Intrastat reporting efficiently
  • How to use tax data for analytics and controlling purposes.

The seminar is geared to tax and VAT managers, finance function representatives responsible for VAT, and IT people responsible for SAP maintenance and configuration – so as well as a chance to talk to PwC’s VAT and SAP specialists, this will also be a great opportunity to network with your peers.

When?
Thursday, 21 April 2016
8 am to 1 pm

Where?
PwC Zurich I Birchstrasse 160 I 8050 Zurich
Map & directions

Reserve your seat as soon as possible by registering here.

If you have any further questions regarding the event, please do not hesitate to contact Demet Koç.

New compliance system to be introduced in Spain as from 1 January 2017

As per the draft bill of the Spanish VAT legislation the new VAT compliance system will be mandatory as from January 1st 2017.

The main features of this new VAT compliance system, according to the wording of the existing draft legislation, are as follows:

  • Bookkeeping of the VAT ledgers will be undertaken through the electronic site of the Spanish Tax Authorities –STA- (“Agencia Estatal de Administración Tributaria”);
  • The new system will be compulsory for those taxpayers obliged to submit their VAT returns (i.e. Form 303) on monthly basis because either: (i) they are larger taxpayers, (ii) they are included in the VAT Monthly Refund Register (“REDEME”), (iii) they apply the VAT group regime, or (iv) they opt for applying this new system;
  • The new system will oblige the above taxpayers to keep up to date VAT ledgers electronically through the STA website. Invoice-per-invoice and timely filing (see below) will guarantee immediate and online access to the information by the STA in real time.

Relevant deadlines

The entries of the outgoing invoices VAT ledger should be made within four calendar days (excluding Saturday, Sunday and National bank holidays) as from the invoice date and, in any case, prior to the 16th day of the month following that in which the VAT corresponding to the transaction becomes chargeable,

The entries of the incoming invoices VAT ledger should be made within four calendar days of the accounting record of the invoice and, in any case, prior to the 16th day of the month following the VAT period in which the relevant transactions are included.

The VAT filing deadlines regarding regular VAT returns (i.e. Form 303) will be moved from the 20th to the 30th of the following month.

Consequences of the new compliance system

The new system will replace some relevant existing monthly/annually tax reports, i.e. Form 347 (annual return for transactions with third parties) and Form 340 (VAT ledgers detailed info submitted by electronic means, nowadays compulsory only for taxpayers included in the VAT Monthly Refund Register -“REDEME”-).

Delays in keeping up to date VAT ledgers through the STA website will be fined with a proportional penalty of 0.5% on the amount of the invoice to be recorded, with a quarterly minimum of €300 and maximum of €6,000.

We note that this is still a draft and there might still be changes.

Impact for businesses

Affected businesses should use the time up until 1 January 2017 to determine which steps they need to undertake in order to ensure compliance with the above (i.e. what additional processes should be introduced for the purposes of being able to make the above information available within the deadlines set out above).

Thanks to a combination of tax and IT knowledge, PwC can offer a complex assistance with respect to all activities related to ensuring compliance with the new regulations and relevant compliance processed being accurately introduced.

Contacts

Know your international VAT specialists

 

 

Romania: VAT rates to be reduced from 2016

Romania decided to reduce its standard VAT rate from 24% to 20% with effect from 1 January 2016.

Also, the reduced VAT rate of 9% will be reduced to 5% for the supply of school manuals, books, newspapers and some magazines, as well as for the supply of services consisting in the allowance of access to castles, museums, and cinemas. The reduced rate of 5% VAT will also be applied for access to sportive events.

Further, Romania will introduce a reverse charge mechanism for the supply of mobile phones, devices that use integrated circuits, laptops, PC tablets and game consoles as from 1 of January 2016. This provision will be in force until 31 December 2018. Reverse charge will be also applicable to supplies of buildings, parts of buildings and land.

Recommendation for action

The above required the affected businesses to amend their systems accordingly in order to reflect the above changes. We recommend that the affected businesses undertake a review of their systems in order to ensure that the above changes are implemented correctly and on time in their accounting and invoicing systems.

PwC has a team specialized in the review of the accounting and invoicing systems for the purposes of ensuring compliance and will be happy to assist you.

For further information, please contact your usual PwC advisor.

Contacts 

Know your international VAT specialists

 

Czech Republic: new reporting obligation from 2016

VAT reporting: additional reporting requirement to satisfy  

As from 1 January 2016 all businesses registered for VAT in the Czech Republic will have to start submitting an additional report – so called “control statement” to the Czech VAT authorities. The purposes of this control statement is to provide to the Czech VAT authorities the details of the supplies made and / or received in the Czech Republic (i.e. supplies falling within the scope of the Czech VAT). Specifically, each invoice issued and/or received for a supply falling within the scope of the Czech VAT will need to be reported on this control statement in addition to the other VAT filings (i.e. VAT returns, EC sales lists, etc.).

The control statement will need to be submitted electronically. Legal entities will have to file the report on a monthly basis within 25 days following the relevant reporting month.

Conclusion and recommendation for action

This control statement will give the tax authorities additional power to get more insights into the specific transactions performed by the businesses that are VAT registered in the Czech Republic. It appears that with the ongoing development of all digital media and the IT possibilities, the tax authorities are in a good position to design new VAT filings and increase the level of the control.

Thanks to a combination of tax and IT knowledge PwC can offer assistance with respect to all activities related to control statement implementation and reporting.

For further information, please contact your usual PwC advisor.

Contacts 

Know your international VAT specialists

 

Germany increases the Intrastat threshold for arrivals of goods

Intrastat threshold for intra-community arrivals increased 

According to the newly passed law in Germany, the threshold for the submission of Intrastat returns for inbound (“Eingang”) goods movements will be increased from EUR 500’000 to EUR 800’000 from 1 January 2016.

The threshold for outbound (“Versand”) goods movement remains unchanged and is EUR 500’000.

Conclusion and recommendation for action

This change will reduce the administrative burdens of the businesses moving their own goods/receiving goods in Germany in the value higher than EUR 500’000 but lower than EUR 800’000. As from 2016 the companies will not have to file the Intrastat returns for inbound goods movements in case the value of the transactions does not exceed EUR 800’000 in one calendar year.

For further information, please contact your usual PwC advisor. 

Contacts 

Know your international VAT specialists