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.


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The electronic VAT return is here!

PwC_Swiz_Zurich_C_MB_62 resized

As of September 8, 2015, the management of the VAT compliance tasks for taxpayers in Switzerland has taken a broad step ahead. The Swiss Federal Tax Administration (FTA) has introduced “AFC SuisseTax”, a secure portal allowing to simplify the VAT reporting process, as henceforth all Swiss VAT declarations can be submitted electronically to the FTA.

The new platform was first launched and tested in four Swiss Cantons and given the successful results, it has now been released on a Swiss-wide level.

Through AFC SuisseTax, businesses registered for VAT in Switzerland can:

  1. Submit their VAT returns and corrective VAT returns electronically
  2. Submit the annual VAT reconciliation (so-called 5th VAT return) electronically
  3. Request an extension, if necessary, of the filing deadlines
  4. Monitor on a regular basis the submission of VAT returns, as well as, of all operations performed via the portal (operations executed / on hold)

The transition from paper to electronic form can increase efficiency and facilitate the fulfilment of VAT reporting tasks. It should be noted that the e-filing option is available for all Swiss VAT registered businesses (taxable persons established in Switzerland and abroad). However, if your business is not established in Switzerland, the authorization process should be carried out through the fiscal representative.

A brief presentation of the new portal can be found on the following interesting video prepared by the FTA:
link to video

As a next step, businesses registered for VAT in Switzerland should consider the implementation of the e-filing option offered by the FTA and adapt their internal processes accordingly. Your PwC Indirect Tax team is ready to answer your questions and guide you through the implementation and use of the new system.

Your needs:

  • “How to”: Review the system requirements, assist you with the request of the e-filing and the authorization process;
  • Assess the correctness and quality of the data transmitted electronically through the portal;
  • Adapt your internal compliance processes for preparing and reviewing VAT returns;
  • Ensure the safety of your data, as FTA declines all responsibility for damages that may result from the use of the platform;
  • Manage efficiently the user account(s) granted to your business by the FTA, determining the authorizations required for the use and the transmission of statements.

Last but not least, even though the e-filing option launched by the FTA facilitates the reporting process, the new process will also help the FTA to perform consistency checks regarding the data transmitted. Swiss taxpayers should keep this in mind, anticipate the review of the VAT data transmitted electronically and ensure the proper implementation of e-filing process as well as of the appropriate internal controls.

Your contacts

Patricia More
PwC Switzerland
Tel. +41 58 792 95 07

Olivier Comment
Senior Manager
PwC Switzerland
Tel. +41 58 792 81 74

Gergana Chalakova
Assistant Manager
PwC Switzerland
Tel. +41 58 792 92 02

Federal Supreme Court clarifies competences for issuance of tax rulings

In two recently published decisions, the Federal Supreme Court (the “Court“) has clarified the federal and cantonal competences for issuing tax rulings on income tax matters. The two Court decisions confirm that the competence for the issuance of tax rulings for direct federal tax purposes lies with the cantonal tax authorities and not with the federal tax authorities.

Although the two decisions of the Court are worded as a confirmation of its current practice, they contradict the Court´s statement made back in 2012, when it left open the question as to whether rulings issued by the cantonal tax authorities concerning direct federal taxes were binding if not explicitly approved also by the Swiss Federal Tax Administration.

Despite these two new Court decisions, it should be noted that the Federal Tax Administration is entitled, based on explicit legal provisions, to object to rulings issued by the cantonal tax authorities in cases of inaccurate application of the Federal Tax Law governing direct federal taxation by the cantons. This means that even if a cantonal tax ruling addresses direct federal tax consequences, there is still a certain risk that the Federal Tax Administration may take a different position on an objection at a later point in time.

For more information on the topic discussed above, including what it means in practice or for other tax questions, contact your local PwC engagement team or me.

We are now there – electronic VAT reporting has arrived

After a test phase with four cantons the FTA is now launching electronic reporting for all taxpayers. Officially it is to start on 1 September. According to information from the FTA, registration is, however, already possible over the following link. The “FTA SuisseTax – Elektronische Mehrwertsteuerabrechnung”(FTA SuisseTax – Electronic VAT reporting) […]

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Good representation is half the battle

With great satisfaction we can inform you about a positive Federal Court judgment published last week (2C_33/2014 judgment of 27 July 2015). After we had already obtained a positive judgment before the Federal Administrative Court for our client, the Federal Court has also supported our position and rejected the FTA’s appeal. Specifically the issue was whether […]

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18th Annual Global CEO Survey: Taxing times for global business

Despite evidence that governments around the world are reducing tax costs and compliance, these efforts are not being felt by CEOs. Here we explore some of the reasons for the disparity.
PwC’s 18th Annual Global CEO Survey
reveals that seven in 10 CEOs are still concerned about the increasing tax burden borne by their businesses – some 15 percentage points higher than the levels of anxiety seen in 2012.

These high levels of concern are despite the trends seen in the annual PwC / World Bank Group study, Paying Taxes: The Global Picture, which suggest a different story. The most recent study shows that not only has the global average Total Tax Rate for a typical medium sized company fallen by 1.3 percentage points, but so too has the compliance burden, measured by the average time it takes a case study company to comply with its tax responsibilities and the number of tax payments required to be made. Indeed, all three of these sub-indicators have shown a steady downwards progression over the past decade. So why is there such a mismatch?

Explore CEOs perspectives and what business and government can do.

Read more…

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.


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. 


Know your international VAT specialists

Toll manufacturing creates a fixed establishment in Poland

A Polish court (the Administrative Court of Warsaw) ruled in one of its recent judgments toll manufacturing to create a fixed establishment for VAT in Poland. 


A Finnish manufacturer of boats intended to extend its business activities to Poland. Before it started conducting business in Poland, it applied for a ruling to the Polish Ministry of Finance.

In its request for a ruling, the Finnish company advised that it intended to purchase parts and components needed for the production of the boats. The manufacturing process was envisaged to be outsourced to a Polish manufacturing company.  Once the manufacturing process was completed, the boats would be stored at the premises of the Polish manufacturer. The Finnish company intended to sell them to customers in Poland and elsewhere.

The Finnish company emphasized that the components and the boats would remain in its ownership and that its right to dispose of the components/goods as an owner would not be transferred to anyone else throughout the whole manufacturing and storage process.

The Finnish company was of the opinion that it did not create a fixed establishment in Poland by reference to the above activity in Poland. Accordingly, it took the view that the services that it purchased from Polish suppliers (e.g. transport, translation work) would be subject to the Finnish reverse charge provisions (i.e. taxable at the main establishment in Finland).

Further, the Finnish company advised that based on the judgments of the Court of Justice of the European Union (“CJEU”), a creation of a fixed establishment requires a sufficient degree of permanence, technical and human resources and that the activity to be carried out by this establishment is independent of the activity of the main establishment.

The Finnish entity was of the opinion that it did not satisfy the above conditions as (i) it did not intend to carry out the activities in Poland permanently, (ii) it did not have any own resources in Poland and that (iii) the resources used in Poland (i.e. machines, tools, employees) belonged to the local manufacturer.

The Ministry of Finance did not agree with the Finnish company’s assessment and instead concluded that the business did have a fixed establishment in Poland. The question was subsequently referred to the Court.

Judgment of the administrative court

Taking into consideration the above fact pattern, the court concurred with the ruling of the Ministry of Finance and ruled that Finnish company would conduct business activities in the territory of Poland which would have a sufficient degree of permanence. The main basis for the above decision was that in the view of the court, the involvement of own resources is not required for the purposes of creating a fixed establishment in the meaning of article 44 of the VAT Directive. Instead, the use of third party resources is sufficient to create a fixed establishment.

Finally, the court indicated that a similar conclusion arises from the judgment of CJEU in Welmory (C-605/12), where the CJEU advised that whether a fixed establishment is created or not needs to be determined by the local courts.

Impacts for businesses

Businesses using third-party resources in Poland (specifically businesses using Polish toll manufacturers) should review the nature of the used resources and the purpose for which these resources are used in order to establish whether they create a fixed establishment for VAT in Poland.

If so, first consequences of the above would be the obligation to register for VAT in Poland, apply Polish VAT on the sale/purchase of goods and services and do the VAT reporting.

For further information, please contact your usual PwC advisor.


Know your international VAT specialists

Greece – European Stability Mechanism (E.S.M) Programme: Voted Tax Measures and Further Commitments from the Greek Government

On August 14, 2015 the Greek Parliament approved the third bailout agreement and the “Provisions regarding pensions – Ratification of the Draft Agreement on the Financial Assistance by the European Stability Mechanism (E.S.M) regarding the implementation of the Financing Agreement”. This is enacted in Law 4336/2015 introducing important tax measures as well as the commitment of the Greek government to adopt additional tax measures for the implementation of the Agreement.

The already approved tax measures include an increase in advance tax payments, higher tonnage tax rates (whereas the tax exemptions applicable to the shipping sector in general will be reviewed at a later date) and the abolition of the obligation to pay a 26% withholding tax as a prerequisite for the deductibility of specific expenses.

Further, until early 2016 the Greek Government committed to proceed to the introduction of further major tax reforms in order to improve the effectiveness of the implementation of the tax laws and the collection of taxes. Such reforms would include the establishment of a wealth registry, the identification of undeclared deposits by checking bank transactions in banking institutions in Greece or abroad, the introduction of a voluntary disclosure programme for the undeclared income, the creation of a database to monitor the balance sheets of parent-subsidiary companies to improve risk analysis criteria for transfer pricing, modernisation of the tax administration and a series of measures in the field of debt collection.

Read more…

Previous publication
Greece – Voluntary Disclosure Programme expected by November 2015

Should you have any questions, please contact your usual PwC contact or:

Marcel Widrig
Partner, Tax & Legal
+41 58 792 44 50
Anna-Maria Widrig Giallouraki
Senior Manager, Tax & Legal
+41 58 792 42 87
Simone Heinrich
Senior Manager, Tax & Legal
+41 58 792 42 65
Sophie Limbioul
Manager, Tax & Legal
+41 58 792 81 83