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This in from ACCA

There have been numerous announcements concerning VAT in Europe; here is a summary of the most significant changes. 

For further details on EU VAT rates along with other useful information the ACCA produces a helpful analysis of the 27 EU countries that includes details on:

  • what VAT is called
  • the EU country code
  • the standard rate of VAT
  • the form of the VAT registration number
  • the normal filing period
  • government website details to access further information.

France

Having announced this a number of times in the past with no firm conviction, the French government will now be increasing its standard rate of VAT, currently 19.6%, to 20%. The change will come into force on 1 January 2014 and falls in line with the recent increase of VAT rates across Europe.

The 7% reduced rate relating to restaurants, construction and ebooks will also increase to 10%. The 5.5% reduced rate relating to food, hotels and entertaining will reduce to 5%.

Cyprus

There is a proposal to increase the Cypriot VAT rate by a further 2% to 19% as a result of the loan the government have taken to assist with their economy. This increase is in addition to the earlier 2% hike in the standard rate of VAT to 17% from 1 March 2012.

There is no timescale indicated other than at some time next year.

Luxembourg

From 1 January 2013 VAT filing will all be online; this is in line with the EU VAT Directives and will apply to resident and non-resident companies. Details of how to file VAT returns in Luxembourg, or in the French or German languages, is available at:

http://www.aed.public.lu/etva/etva-affiche-fr.html

(Please note: this links to a French-language website)

Both Luxembourg and France have been approached by the European Commission to stop applying a reduced rate of VAT to electronic books. A number of complaints have been made to the European Commission ministers of finance. Both countries had been applying the reduced VAT rate since the beginning of 2012 and were in breach of the EU’s Directive and have stated:

This situation is creating a serious distortion of competition to the disadvantage of operators in the 25 other Member States of the Union, as e-books can be easily purchased in a Member State other than that in which the consumer is resident, and current rules provide for application of the VAT rate in the Member State of the provider rather than that of the customer.

The European Commission has issued both countries with ‘reasoned opinions’: this is the second phase of formally requesting that they revert back to charging the standard rate of VAT on electronic books. Both countries have a month to comply before the matter is referred to the European Court of Justice.