Lovat Newsletter – March 2024

Nalim

News

North Macedonia:

Starting from January 1, 2024, the North Macedonian Ministry of Finance now imposes a VAT of 18% on digital and telecommunications services provided by non-resident companies. This is because North Macedonia wants to make things fair between local and foreign online service companies and is getting ready to join the European Union. Every foreign company providing digital services to North Macedonia needs to follow these rules.

Sri Lanka:

Starting on January 1, 2024, Sri Lanka raised the VAT rate to 18%.

Sri Lanka’s government also wants to start charging VAT on digital services sold by companies from other countries. This new rule would mean an 18% VAT on many online services, like streaming music, movies, games, apps, e-books, and more, to make sure local and foreign businesses are treated the same way.

Switzerland

Switzerland is revamping its VAT system, with major changes coming for e-commerce in 2025. Online marketplaces will be responsible for collecting VAT on sales under new rules, acting as the deemed supplier in certain transactions. This strengthens transparency by requiring platforms to provide information to tax authorities.

European Union (EU):

Payment service providers (PSPs) will need to monitor cross-border payments and share information on recipients who receive more than 25 such payments per quarter.
This data will be centralized in a new European database called the Central Electronic System of Payment Information (CESOP), developed by the European Commission.

Virginia, USA:

Virginia’s Senate has made a proposal that could change how businesses pay taxes, especially those that work with digital services. They want to change a rule so that taxes apply to all digital services businesses buy. This is different from an earlier plan that didn’t tax these types of business deals. The new rule could make things more expensive for businesses and, eventually, for people who buy things. When businesses have to pay more taxes on their services, they might pass those costs on to customers.

Illinois, USA:

Illinois Governor J.B. Pritzker has laid out plans in his FY 2025 budget to boost state funds by almost $900 million. One key proposal is to update the personal tax exemption amount using only partial inflation adjustments. Another plan is to keep a limit on how much companies can deduct their losses until 2027. To partially offset compliance costs, states typically allow retailers to keep a portion of the sales tax revenues they collect. Currently, Illinois allows retailers to retain 1.75 percent of sales taxes collected, but the governor’s budget would impose a $1,000 per month cap.

Guides updated

Cameroon VAT guide for goods

Bosnia and Herzegovina VAT guide for services

Italy EPR guide for EEE

Poland EPR guide for EEE

UK EPR guide for EEE

Cyprus EPR guide for packaging

Deadlines

2 EPR reporting deadlines

March 31, 2024 – for packaging in Germany;

April 20, 2024 – for EEE in Spain.

Watch our video guides on how to submit EPR reporting on the Lovat platform.

We are here to support your compliance journey. If you have questions or need assistance, feel free to reach out to our dedicated team. Contact us