European Union VAT Rates 2013

EU 2015 VAT Changes – Customer Location

2015 EU VAT changes – Determining customer location

By now most of you will be aware of the EU VAT changes to digital downloads, where the VAT is now charged for the country it is downloaded in rather than from where it is supplied, however many businesses are questioning how they determine their customers place of supply. Many people now a days use many different installs or plugins etc. to change their perceived location, for example there are many chrome plug ins that allow you to set your location to different countries in order to access certain video streaming services or websites otherwise blocked or different in the country that they are in, but will this affect the VAT rate that they pay for digital downloads? Could you for example be in Hungary and set your location to Luxembourg in order to only pay 17% (new 2015 rate) instead of 27%? And if so how to companies prevent this from happening and inadvertently committing VAT fraud.

Which means that the key issue for suppliers will be to correctly identify where their customers belong, so they can apply the correct rate of VAT. In order to try to provide both clarity and certainty on this point the regulations contain a number of presumptions which will have legal effect in all 28 EU Member States. Continue Reading

Luxembourg VAT increase coming soon

Luxembourg to raise VAT 2%

From the 1st of January 2015 Luxembourg is to hike all rates other than its super reduced rate of VAT by 2%, increasing the standard rate of 15% to a rate of 17% and reduced VAT rates will rise from 12% and 6% to 14% and 8%, respectively. The rate of the super reduced rate is to be unchanged at 3 percent but its scope will change.

The Prime Minister confirmed that the measure would help raise €350 million which would be vital to compensate for the scheduled change in EU 2015 B2C VAT digital services place of supply rules. Many companies base their digital download business headquarters in Luxembourg due to its low VAT rate, however when the VAT rule changes in 2015, where companies pay the VAT of the country in which the product is downloaded, Luxembourg is set to lose out approximately €700million per annum.

If your company is registered for VAT in Luxembourg you should be aware that any change in the VAT rates will affect businesses both as suppliers and as customers. Businesses registered for VAT in Luxembourg should therefore keep well-informed with the planned VAT developments and adjust accordingly.

For more information please see:

Luxemborg confirms VAT rise for 2015 – from
Luxemborg issue guidance ahead of 2015 VAT rate changes.


Slovenia 2% VAT rise July 2013

Slovenia 2% VAT rise July 2013

9 May 2013
The Slovenian government has agreed a new austerity package, which includes a 2% VAT rate rise on 1 July 2013.
The package will be presented to the European Commission tomorrow, 10 May.  Slovenia is looking to assure other member states of the European Union that it can remain solvent, and will not need a Cyprus-like bail out.
The current Slovenian standard VAT rate is 20%, and was set in 2002.  There may also be an increase in the reduced VAT rate, currently 10%.
This rise follows recent VAT increase announcements in Cyprus and Luxembourg as smaller EU states facing worried financial markets

for the full article, follow this link,1H77Y,7QSZAY,50TM3,1

Luxembourg to raise VAT, will it be 16 or 17%?

The following was published by the TMF Group, you can see the full link here

Luxembourg has announced that it plans to raise its standard VAT rate to help reduce is deficit.
Currently, the Value Added Tax rate in Luxembourg is 15%, the lowest in the European Union.  Whilst there is no confirmation of what the new rate will be, the government is adamant that it will remain the lowest in the EU.

The rise will probably be to 16% based on previous discussions.  However, it could go to 17% as the next lowest EU rate is 18% in Malta.  Cyprus also has a VAT rate of 18%, although this will rise to 19% at the start of 2014.

Luxembourg is home to the European headquarters of many global companies

Further update;

Luxembourg: VAT rate to be slightly increased from 2015

Grant Thornton Luxembourg report that: On 10 April 2013, the Luxembourg Prime Minister, Mr Juncker, has announced in his “State of the Nation” speech that the Luxembourg standard VAT rate of 15% will increase as from 2015.

This increase will help to offset the planned deficit of VAT revenues in Luxembourg related to the new rules applicable to e-commerce services as from 2015. Indeed, the place of taxation of e-commerce services provided to EU private customers will be the country of the supplier instead of the country of the customer as from 2015.

The Prime Minister has specified that Luxembourg government wishes however to maintain in the future the lowest standard VAT rate in the EU despite the increase. Currently, the lowest VAT rate is Luxembourg (15%). The second lowest VAT rates are applied by Cyprus and Malta (18%). However, the VAT rate of Cyprus will increase to 19% as from 2014. At this stage, there are no other indications regarding the future Luxembourg VAT standard rate except that it will not exceed 18% in order to remain the lowest VAT rate in the EU.

Oracle eBTax: How to add Croatia to your EU Tax Zone

The intention of this posting is to show you how to add Croatia to your European Economic Region Tax Zone in Oracle eBusiness Tax R12

Step 1

Navigate to your Tax Zones.
This should be in the Tax Manager Responsibility (or whatever your equivalent is).
Tax Manager–>Advanced Setup Options–>Tax Zone Types

ebusiness tax european union tax zone 

Step 2

You should already have an existing tax zone for Europe setup. Click on the ‘View Existing Zones’ next to the Tax Zone Type of ‘Economic Regions’. If you do not see ‘Economic Regions’ then check the other tax zones you have.
ebtax tax zones etax oracle 

Step 3

Click the update against the ‘European Economic Community’ (or European Union, or whatever else may have been set up)
oracle ebtax etax


Step 4

This screen will show all the EU countries that you currently have  in your Tax Zone. To add an additional one, click the ‘Go’ button as shown below.

Oracle eTax adding country to tax zone

Step 5

Type Croatia in the country name and click go. Then choose Croatia.

Step 6

Make sure you change the start date – we have used 1stJuly 2013 as at the time of writing this was the correct date but if this changes then you can change the date accordingly.
oracel etax tax zone
Change Start Date
Click on Apply
You have successfully Added Croatia to the European Union.

Triangulation VAT, recorded on AP transactions??

By default, when selling to a registered EU supplier, I will either set the tax solution to calculate an EU Sales Goods, EU Sales services or an EU Sales Triangulation tax rate – all with a 0% rate but often with different parameters to allow me to report them differently. On the flip side, when receiving an invoice from a supplier, i would only split between the purchases from Europe of goods and services. But a client of mine recently has insisted that for invoices received from suppliers they need to record separately the tax rate when the supplier charged triangulation tax.

Is this the norm? is this a legal requirement? what countries would need this if it were a legal requirement as my client is located in Spain.

your comments will be greatly appreciated

Cyprus 2% VAT rise to 19% by 2014

The VAT rate first increased by 1% to 18% on 14 Jan 2013 and a second rise of 1% on 13 Jan 2014 to 19%.  The reduced rate will also rise in 2014 from 8% to 9%.  There will be no change to the 8% VAT rate..

this post was originally from

VAT Rates Applied in the Member States of the European Union

For a list of EU VAT rates for 2013, please follow this link – EU VAT rates for 2013

Iceland – VAT rate changes for 2013

Effective September 2013, the VAT rate on rental of hotel and guestrooms and other accommodation (including campground facilities) will increase from 7% to 14%.

With this change, Iceland will have four VAT rates on goods and services:

  • The standard VAT rate of 25.5%
  • The VAT rate of 14% on hotel and guestrooms and other accommodation services
  • A reduced VAT rate of 7% applies to specific goods and services
  • A VAT rate of 0% on certain services and goods (for example, exported goods as well as labor and services provided abroad)

Another VAT change is that effective 1 January 2013, movie tickets to Icelandic films are no longer exempt from VAT, but are subject to the standard VAT rate of 25.5%.

Effective 1 July 2013, the VAT rate on condoms, reusable diapers, and diaper fillers (custom 9619.0091) will be reduced from 25.5% to 7%.