What’s happening in the world of VAT? Our Global Managing Editor gives her daily round-up.
UK
The Conservative party has won a majority in yesterday’s UK election, and will no longer be part of a ruling coalition. While debate continues in the UK about what the election results mean for the union as a whole – and for the voting system – the financial world welcomed the news, with the FTSE 100 rising 2.32% buoyed by shares in banks and energy companies seeing big gains. The pound was also up more than two cents against the US dollar. Investors seem happy that the Conservative’s slender majority lets the UK avoid the long period of uncertainty and a hung parliament that looked likely even as polls opened on Thursday. Source.
EU
The European Commission released its blueprint for its Digital Agenda on Wednesday, including VAT reform measures. The EC says it will look to reduce the administrative burden businesses face when dealing with different VAT regimes, hinting at increased harmonisation in the area of digital tax rules. It also said that sellers of physical goods to other countries should benefit from a single electronic registration and payment system. Source.
Norway
Norway’s incentives for environmentally-friendly vehicles has seen electric cars surge in popularity – 50,000 have been registered as of April on the promise of toll-free driving, free public parking and use of public transport lanes – but not all parties are happy. The state has lost income, and bus drivers have complained about traffic jams in bus lanes. Following late-night negotiations, the right wing government and its centre right allies agreed to maintain the tax exemptions until 2017, but electric car owners will be required to pay half of the yearly road license fee from January 2018 and the full rate from 2020. Dreams of business fleets of electric cars may not seem so likely anymore. Source.
Greece
Tourists to Greek islands will be forced to pay an 18% tax on hotel and restaurant bills to help the battling government appease its creditors in a plan heads of tourism called “catastrophic”. The European Central Bank is also drawing up plans for a parallel currency for Greece as the country hurtles towards bankruptcy; a default is looking more and more likely as the clock ticks on. Source.
Hungary
The Hungarian government is planning a reduction in VAT on internet subscriptions from 27% to 18% from January, say sources. The tax could be reduced again if a superfast broadband network is established. Source.
Alabama (US)
The Alabama State Senate is considering a bill that could lead to a “more even playing field” in commerce. It will allow out-of-state online retailers to voluntarily collect state and local sales tax from its customers. Currently many online retailers that don’t have physical locations in the state – including Amazon – don’t charge sales tax on purchases. Source.
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