From the Chamber of Deputies30/09/12 / cata_tax-news

Act on changes to tax, insurance, and other acts in connection with reducing the public budget deficit

The Senate rejected the government’s bill on changes to tax, insurance, and other acts in connection with reducing the public budget deficit; subsequently, the bill was then also not passed by the Chamber of Deputies. The same bill was immediately presented to the Chamber of Deputies for approval as Parliamentary Press No. 801. Partial changes to the bill will most likely be subject to further consideration and voting on the bill will be connected with the upcoming confidence vote.

1 January 2013 is proposed as the effective date for the changes to the tax acts, which we looked at in more detail in the last issue of Tax News. We will keep you informed of further developments.

Amendment to the VAT Act

The Chamber of Deputies will consider the extensive amendment to the VAT Act in the first reading. Most of the changes result from the obligation to implement EU directives and regulations. Save for certain exceptions, the amended provisions should take effect on 1 January 2013.

Certain provisions in the VAT Act were moved to different paragraphs or brand new paragraphs were added. They include, for example, provisions stipulating what is not subject to taxation, a definition of turnover for VAT purposes, special cases where a person liable to tax becomes a taxpayer, and more. 

The government’s bill includes the following fundamental changes:

• Definitions of the terms place of residence, registered office and establishment are revised and the specifics of certain terms are clarified, including delivery of goods through systems or networks and contribution of an enterprise.
• The conditions for determining the moment when a person becomes a VAT payer are modified. For example, where the turnover is exceeded, the person becomes a taxpayer on the first day of the second month following the month in which the turnover was exceeded. 
• Where a person fails to fulfill his/her registration duties, he/she becomes a taxpayer retroactively.
• In the event of voluntary registration, the person becomes a VAT payer on the day the tax administrator takes the decision to register said person.
• New rules are set for when the tax administrator may cancel a taxpayer’s registration by constitutive resolution.
• The general duration of the taxation period is revised. The basic taxation period is the calendar month. If the payer fulfills certain conditions, the taxation period may be the quarter year.
• The rules have been unified for all persons with regard to determination of the place of performance rendered in the case of vehicle leasing.
• The wording of the provisions determining what is and is not a tax document and the form and retention thereof will be entirely new. Electronic tax documents will also be permitted and it will not be necessary to attach a guaranteed electronic signature or electronic mark.
• The deadline for applying real estate transfer tax will be extended from three to five years. Moreover, the taxpayer may decide whether the transfer will be realized as a taxable supply even after the deadline.
• A new legal fiction institute will be introduced in the case of the reverse charge tax mechanism in connection with the delivery of construction and assembly work. Where the supplier applies the reverse charge mechanism, even if the supplier rendered a supply that is not subject to such mechanism, it will be deemed that such supply is applicable to reverse charge.
• A brand new institute was introduced concerning a guarantee on the part of the rightful recipient for whom an obligation to file and pay the excise tax arose. The rightful recipient, in cases where the goods are supplied to a third party, guarantees payment of the VAT that was not paid by the person who obtained such goods from another EU member state.