What’s happening in the world of VAT? Our Global Managing Editor gives her daily round-up.
Indonesia
Could the world’s largest archipelago become the next great shipbuilding nation? Eddy Kurniawan Logam, president director of PT Logindo Samudramakmur Tbk, thinks so. Also chair of the offshore department of Indonesian Marine and Offshore Industry Association (Iperindo), Mr Logam says Indonesia is an untapped market for shipbuilding; it currently only produces 100 ships per year, largely hindered by the high costs of production due to a 10% VAT and 5-12% import duties on shipbuilding components. The Indonesian government, however, is expected to abolish the VAT shortly, and who knows what could happen then. Source.
Greece
The bailout issues continue in Greece. It scraped together enough cash to order the repayment to the IMF of EUR 750m to avoid a default which could send it crashing out of the Eurozone, but euro finance ministers in Brussels are keeping their tough line, saying Greece could not hope for any of the final EUR 7.2bn of its EUR240bn bailout until Athens makes key reforms.
Meanwhile, Greece’s Association of Hellenic Tourism Enterprises (SETE) has been forced to lower its estimates for the year thanks to the introduction of a special VAT on tourism accommodation.
But it’s not all bad news in Greece; the nation has been invited to become a member of the development bank of the BRICS economies, including Russia and China, which is seeking to become a counterweight to the IMF. Prime Minister Alexis Tsipras called it a “happy surprise”. Source.
UK
The British Hospitality Association has called on the UK’s new government to cut tourism VAT to 5%. Chief executive Ufi Ibrahim says a cut could boost jobs, bring billions of new revenue to the Treasury and directly improve the livelihoods of people in struggling communities across the UK. Source.
Serbia
The EU’s Enlargement Commissioner Johannes Hahn visited Serbia last week but was dogged by questions as to why Serbia’s accession negotiation process stalled. No chapters have opened more than a year after their official launch, and it’s emerged that Belgrade and Brussels have opposing views on the situation. While Hahn talked about the need for Serbia to fully implement conditions, Serbian Prime Minister Aleksandar Vu?i? insisted that his country had met the EU's requirements, and that the first move mostly depends on Brussels. Economic difficulties, and Russia, were also on the agenda. Vu?i? expressed Serbia's commitment to EU integration, but criticized Brussels for not sufficiently recognizing progress made by Serbia.
France
The French tax authority has updated the list of French and foreign airlines that may benefit from a special scheme providing a tax exemption on the goods and services connected to activities they receive in France. Under Article 262 of the General Tax Code (CGI), airlines considered eligible for the exemption may take advantage of certain goods or services VAT-free, such as supplies, repairs, maintenance and chartering, providing at least 80% of activities take place overseas. Source.
Australia
Treasurer Joe Hockey has unveiled new measures to crack down on tax avoidance by multinational companies and extend the GST to digital downloads in a move that’s been dubbed the “Netflix tax”. Mr Hockey said the tightening of provisions in part 4A of Australia's Tax Act would deal with the tax avoidance of 30 identified multinational companies and would look to start from 1 January 2016. Source.
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