A summary of the latest changes to VAT across Europe.
Article contributed by ACCA
The standard rate of VAT in Poland increased to 23% in 2011 with the proposal to reverse the increase in the near future. Though Poland has not fallen into recession, worsening economic conditions have prevented the reversal. The latest prediction is that the VAT rate will not drop back until at least 2015.
In order to assist the tourism industry the Danish government will be increasing the amount of VAT that can be recovered. Currently only 50% of VAT suffered at conferences on expenses like hotels, restaurants incurred by businesses on live events, exhibitions can be recovered. The assistance will come in the form of increasing this recovery percentage to 75% from 1 January 2014
The Romanian government has requested from the EU to reduce the VAT on bread to 9%; a decision has yet to be taken.
The Luxemburg government is contemplating increasing its standard rate of VAT, currently 15%. It has stated that it wishes to maintain a low VAT rate and there is speculation that it might increase to 16% or even 17%. The measure is being used to reduce the Luxemburg deficit. Luxemburg is home to the European headquarters of many companies, due to its low rate of VAT, location and multi-lingual population.
The annual changes to the VAT thresholds have been announced and are effective from 1 April 2013. The VAT registration threshold increased to £79,000, previously £77,000, and deregistration threshold increased to £77,000, previously £75,000. The VAT registration threshold for relevant acquisitions from other EU member states also increased to £79,000, previously £77,000.