VAT changes in 2013
Change in the effective date
The Parliamentary Public Finance Committee is working on the governmental draft of the amended Act on the Value Added Tax. The Committee will present its report in this respect on Thursday, November 15th, 2012. An important change proposed by the Committee is the postponement of the effective date of amendments to the VAT Act from July 1st 2013 to January 1st 2014. The changes are mainly in respect of the tax point, deduction of input VAT and tax base.
Some of the amendments will still come into effect on January 1st 2013. They include the following:
- Supply of goods free of charge – samples and gifts with a small value will not be subject to VAT if the supply of such goods is related to the business activities conducted; the definition of a sample will be changed. As a general rule, marketing materials and information materials will be subject to taxation;
- Billing – invoices will be simplified and statement invoices will be introduced; some elements of an invoice will change;
- International trade – including amendments to regulations on application of VAT at 0% on intra-community supply of goods and export of goods, new deadlines for billing intra-community supply of goods, and invoices for advance payments related to intra-community transactions will not be subject to taxation.
In addition, the Parliament is working on the so-called third deregulatory act which is also to come into effect on January 1st 2013. The changes in VAT resulting from the new act will be in respect of cash accounting method used by small taxpayers and simplification of bad debt tax relief. Importantly, if a debtor has not paid their liabilities within 150 days from the payment deadline, they will have to make an adjustment to the input VAT deducted. If the debtor fails to do so, tax authorities will be able to fine the debtor charging it with 30 per cent of the sum not adjusted.