Archive for June, 2015

Romania confirms 5% VAT rate cut

Romania confirms 5% VAT rate cut

The Romanian Government has now confirmed that the planned VAT rate cut is going ahead, a drop from 24% which is one of Europe’s highest to 19% which is one of the lowest. It has recently been uncertain as to whether the cuts would go ahead due to some political unrest when the opposition accused the Government of going in the wrong direction with the budget and calling for a re-election which would have put the VAT plans in jeopardy.

However earlier this month the Government confirmed the VAT cut was to be implemented by 1st January 2016, and at a greater rate than was expected. In February they announced a cut to 20%, this is based on a quicker than expected return to growth in the country.

Furthermore in addition to this they also confirmed that draft beer will drop from 24% to 9% following in line with the earlier cut to food products.

Yet with this measure potentially impacting the budget revenues by some EUR 2.6 billion both the EU and the IMF have expressed doubts over the sustainability of such deep tax cuts in Romania.

eBiz Answers narrowly miss out at awards ceremony

eBiz Answers narrowly missed out at last months International Tax Review’s – European Tax Awards presentation held at the Grosvenor House Hotel in London.

eBiz Answers had been nominated for two awards, European Tax Innovator of the Year and European Tax Technology Firm of the Year, which were awarded to Deloitte and Meridian Global Services. Continue Reading

IMF call on Spain to raise their VAT rate

IMF call on Spain to raise VAT

The International Money Fund has called on Spain to raise its VAT rate, even though they said they are pleased with the progress that Spain has made so far it still needs to see more improvements especially on the high levels of unemployment, currently at 24%.

Spain’s economy is gaining momentum and is expected to grow by 3.1% this year however they still need more revenue to boost their economy and the IMF believe they can best do this by raising their VAT rate. In addition they also say other reforms were needed, such as an overhaul of employment contracts and the introduction of healthcare co-payments.

So far the Spanish Government says it had no plans to raise the VAT rate, but it is something that could be a possibility in the near future if they are to listen to the IMF.

India Increase service tax rate

India raises service tax rate to 14%

As of the 1st of June 2015 India’s service tax has increased to 14%, this is a 1.64% rise in the effective VAT rate which was previous 12.36% made up of 12% Service Tax and 2% surcharge for education on the 12%. The service tax currently affects all services except for a select few.

This is part of the transition over to Goods and Services Tax (GST) which is set to roll out in April 2016, the GST Bill seeks to streamline India’s tax administration by eliminating different tax structures in different states, as India operates one of the most intricate and ineffective consumption tax regimes in the world. There are a number of taxes, including:
• Indian VAT levied on goods separately by most of the 29 Indian states
• Indian Service Tax which is charged on services
• CENVAT a VAT on the supply of goods charged by the central government
• Professional Tax

This means that often the taxes over lap resulting in double taxation, and also imposes a heavy administration burden on businesses, meaning that the government finds it hard to forecast a budget as the tax system is so unstable they cannot predict revenues accurately. This is why they plan to introduce the country-wide GST. GST will be levied on the supply of goods and services, with potential reduced rate and exempt supplies for essential supplies such as foodstuffs and public transport, which is expected to be implemented at around 16%, the current rise to 14% is just the first stage in this tax overhaul.

Romania to cut VAT on food products to 9%

Food chain welcomes early cut on VAT

Romania will cut value added tax (VAT) for all food products to 9% from 24% starting on the 1st of June 2015, six months earlier than planned as budget revenue is higher than expected, after cutting budget deficit to 1.8% of GDP last year from 7.2% in 2009 by a series of measures including cuts in state salaries, limits in public employment and tax hikes, the Romanian Government has announced.

The law extends the scope of the reduced VAT rate to food, including beverages but excluding alcoholic beverages, animals, and live poultry from domestic species, seeds, plants, and ingredients normally used in food preparation, and also restaurant and catering services, excluding sales of alcoholic beverages. Applying the cut to the whole food chain makes it easier to manage. Continue Reading

Fusion Tax – Rapid Setup Templates

With Fusion Tax, Oracle introduced ‘Rapid Setup Templates’ with the intention to allow the configuration of eBTax to be done quickly. The idea is great and similar to our own eBTax Rapid Install™ product that we created for R12 but unfortunate it is nowhere near as comprehensive. At the time of writing this post, it also is currently full of bugs (June 2015) and a lot of them.

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Fusion Tax – Run Maintain Geography Name Referencing

In R12, this was a nice simple process, a solution that has been refined over the years to a stable and great solution. Fusion on the other hand still has a few teething issues as you would expect with any new release of software.

In R12, when running the same process, you had a drop down list of values so you could choose the table name. No such luck with Fusion tax at the moment (maybe fixed in future release), you need to know the table names and manually type them in, any mistakes and your request will fail.

This is the parameters:

Fusion TaxThat’s it nothing else to help you!

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