Archive for February, 2015

Romanian VAT decrease to 20%

Romania to cut VAT rate

Having raised its VAT to 24%, from 19%, in 2010, making it the 5th highest in the EU, Romania has now committed to bringing back a lower tax rate and are planning to lower their tax rate to 20% in 2016, with a potential of a further 2% decrease to 18% in 2018 if it’s financially viable. Additionally there would be a drop from 24% to 9% for meat, fish, fruit, vegetables and other basic foodstuffs. Whilst this would result in over €2.5b budget impact, it is hoped that the lower rate will help to increase the compliance levels which saw a 3% decrease after the VAT increase was implemented in 2010.

Puerto Rico – Tax reform

Puerto Rico VAT Implementation

Puerto Rico has now advanced its plans to implement VAT, with it expected to be introduced in 2016, they have issued a bill to withdraw the current Sales and Use tax. This has been implemented in line with their plans to shift from an income based system to a consumption tax based system. In order to prepare for the VAT introduction they have also risen the current SUT tax from 7% to 16% which will come into effect on the 1st of April 2015. There are several key points in the new indirect tax regime:

• The new VAT rate will be 16%
• The current SUT rate will increase from 7% to 11% on 1/4/15
• Exports will be exempt from VAT but Imports will be liable
• The supply of taxable goods or services will be subject to VAT
• VAT filings will be monthly, due no later than the 20th of the month
• There will be a facility to reclaim any VAT credits
• Will eliminate a significant number of exemptions, exclusions and the preferential tax treatment of many items.
• VAT will be imposed on every taxable transaction Continue Reading

No Ship to on intercompany invoices – solution

This posting is a direct copy from the Oracle website based on note 1048431.6

For years we have been using a work around but Oracle have now provided the following solution to help with the missing ship-to information badly needed to correctly determine the tax.

Reference INCIAR – Ship-To/Shipto Address Does Not Appear On Intercompany AR Invoices (INCIAR) (Doc ID 1048431.6)


The “ship to” address is not appearing on intercompany AR invoices.

The “ship to” address for Intercompany AR Invoices is not populated after the AR Autoinvoice process is completed.

This document includes all version of Oracle E-Business Suite 11i and Release 12.


Continue Reading

Nigeria VAT increase

Nigeria – VAT Increase

The Nigerian government has proposed a potential increase in their VAT rate to 10%, double the current VAT rate of 5%. Due to the recent oil price crashes Nigeria, one of the biggest exporters of crude oil, has face significant financial losses, if the price of oil continues to fall the government will introduce the VAT rate change in order to help cover the losses. However no decision is to be made until the oil price stabilises and Nigeria can further assess its position.

Puerto Rican Sales and Use tax changes

Puerto Rican Sales and Use tax changes

Puerto Rico currently have a Sales and Use Tax (SUT) or Impuesto sobre ventas y uso (IVU), the global rate is 7%. This is made up of 6% state SUT and 1% municipal SUT. This changed from 5.5% state SUT and 1.5% municipal SUT on the 1st of February 2014. The global rate did not change just the rate of the distributions. This is because Puerto Rico are taking steps to change their current SUT system for a VAT one.

They are hoping to introduce a proper VAT system within the next few years with a higher rate of around 16% expected. This change is projected to help Puerto Rico retain 75% of VAT revenue, compared to only 56% retained from sales taxes, which would help with its estimated $168 billion of debt. Since its introduction in 2006 the SUT has failed to provide sufficient revenue for the government, due to a high number of exemptions and non-compliance. This tax reform covers all forms of taxation not just SUT in order to get a more balance system. In 2014 they also changed the scope of the exemptions from SUT to include business to business transactions, resellers and other goods/services previously exempt in order to increase compliance, however this has not done enough.

The Puerto Rican Government are expected to push through the new tax reform bill within the next few weeks, with the VAT plans expected to go ahead. This will mean big changes for individuals and businesses alike in Puerto Rico.

Oracle R12 Chinese VAT free goods

Similar to Italian VAT and Malaysia GST, in China there is a requirement to charge VAT on the supply of free goods such as samples or free gifts.

There is no standard functionality from Oracle to accommodate this but eBiz Answers have developed a simple work around to accommodate this issue.


Reach out to us on this page for further information.

What is the difference between GST and VAT?

What is the difference between GST and VAT?

For all intensive puposes VAT and GST are essentially the same type of indirect tax and work in virtually the same way.  Going on the pure defininition VAT is linked to tangible goods, whilst GST is linked to both tangible goods and services. However in most countries that apply VAT, especially European ones, VAT is applied to both goods and services, which would indicate little difference between the two. Yet  there is a big difference between Sales and Use Tax, used in places such as America, and VAT/GST.

Where there is  a requirement to split between goods and services this can easily be accommodated in your Oracle ERP System.