EU

Greece plan flat 18% VAT rate

News coming out of the EU suggests that Greece is planning on implementing a flat VAT rate of 18% and also reduction in their list of exemptions. Greece currently has one standard VAT rate of 23% and two reduced rates of 13% and 6.5%, these would be combined so there is only one rate of 18% meaning that the standard rate will fall by 5% but the reduced rates will see a significant rise. Medicines would be the only exemption, although tourism VAT rate is also expected to stay at 13%. The special status granted to Aegean islands, with a 30% discount on VAT rates, will be abolished.

This is part of the Greeks government’s negotiations with creditors to start reducing their high levels of national debt, and increase revenues. Nothing has as yet been approved and the rate would not be implemented till late 2015 at the earliest.

Italy reduces Blacklist countries

Any Italian VAT registered business, resident and non-resident, must produce a regular report on transactions undertaken with a business resident in a Blacklist country, with increased restrictions on the deductibility of costs incurred from the countries. Italy have now removed several countries from its ‘Black list’ of countries that require this additional reporting.

Malaysia, Singapore and the Philippines have now been removed from this ‘Black list’ or ‘Modello Polivalente’, still leaving over 40 countries on it.

For a full list of countries see the earlier eBiz Answers post: Italian Tax Black List