A number of significant changes regarding VAT took place in 2014, with the abolition of the annual VAT clearance return and the new simplified VAT form (effective from 01/01/2015) being the most important.
TaxExperts’ VAT Compliance Team has drafted a special report with the most recent modifications.
Changes under the L. 4182/2014
The article 38 of VAT Code (L. 2859/2000) was replaced by the par. 8A of art. 1 of L. 4182/2014, while the majority of the new provisions will be effective from 01/01/2015.
Rescheduling of the filling periods:
• The tax period is one month for companies with double entry bookkeeping and IFRS.
• The tax period is set at three months for taxpayers operating pursuant the simplified accounting standards of income-expenses.
• The tax period coincides with the calendar year for individual farmers with no other activities which oblige them to bookkeeping. It is noted that this provision is effective since 08/08/2014, when the L. 4182/2014 was released in the Official Gazette.
Concerning the filling and payment process, the VAT return shall be submitted by the last working day of the month following the end of the tax period. The same deadline is also applied for the payments, contrary to all withholding taxes (for payroll, dividends, interest etc.) which are granted with an extra 30 days.
Moreover, if the amount due of the VAT clearance does not exceed 30 Euros, the liability is transferred to the next payment. If the amount due exceeds 100 Euros, it may be paid in two equal and consequent monthly installments, without any charges.
There is also a special scheme for dormant companies. If a taxpayer declares inactivity or suspension of operations, he will not submit a VAT return. Also, companies and freelancers with gross revenues lower than 10.000 Euros, based on their income tax return of the previous accounting period, exempt from the obligation of submitting a VAT return (art. 39 of VAT Code as replaced by art. 251 of L. 4281/2014). This favorable regulation is not effective in the following cases:
• Farmers of the special VAT scheme. (art. 41 of the VAT Code)
• VAT registered taxpayers with a permanent establishment abroad.
• Delivery of new means of transport.
The par. 8B of the art. 1 (L. 4182/2014) abolished the obligation of the submission of annual VAT clearance return for accounting periods ending after 01/01/2014.
New VAT form after 01/01/2015
Under the Circular 1198/2014, issued by the General Secretary of Public Revenues, a couple of changes were made at the content and codes of VAT form (F2 form).
More specifically, the new amendments are summarized in the following points:
• Inputs, i.e. purchases and expenditure, will be filled only in two fields containing the value and the VAT charged. In short, inputs will not be displayed per VAT rate as in the previous form.
• The informational fields get embodied in inputs and outputs respectively. This modification contributes to the adoption of best practices concerning the proper statement of corporate transactions for VAT purposes and the auditing by the competent Tax Authorities.
• The VAT refund claim is integrated in the new VAT form and the submission of a separate application will be no longer required.
• The offsetting application for funding future amounts due is also included in the new VAT form.
• The taxpayer may fill a bank account in case of refund.
Furthermore, the new VAT form will allow the settlement of assets and the calculation of the deductible proportion (pro-rata). Thus, the obliged taxpayers will no longer have to complete confusing tables for the calculation of the abovementioned amounts.
Overall, the lawmakers are trying to make a comfortable environment for foreign companies and potential investors who are seeking for simplifications. With the new scheme, fiscal / vat representation for distance sellers, online stores, importers and triangle transactions with third countries, will be more straightforward.
Greece, is also struggling to get a better score in the Ease Doing Business Guide of World Bank. TaxExperts, which is a formal contributor over the last years is going to give a credit to Greece for the developments in VAT and Greece is expected to gain several positions in the global business ranking.
To sum up, it is worth saying that the aforementioned regulations are expected to reduce significantly the administrative cost of all companies. More specifically, the Minister of Administrative Reform estimated that the exemption of small firms from the obligation to submit a VAT return may reduce the administrative burden by €15 million per year, while the total benefit arising by the new legislation is assessed at €430 millions.