E-Commerce, Market insights, Newsroom, VAT | 17. April 2023

CFE Tax Advisers Europe raises concerns over ViDA proposals

CFE Tax Advisers and CIOT express concerns over EU VAT changes and digital services taxes' impact on businesses. EU aims for fair online retail pricing, while Swiss influence raises DACH competitiveness questions. Austria ranks top retailers, and a Nestlé scandal highlights unbiased research importance. Amazon focuses on AI, and the Hague Court rejects VAT fraud allegations. Czech beer tax sparks controversy. by

The CFE Tax Advisers Europe have issued an Opinion Statement on the EU Commission’s “VAT in the Digital Age (ViDA)” legislative proposals. While they welcome the proposals to adapt current VAT rules in the EU to the digitalisation of the economy, they have concerns about e-invoicing and digital reporting requirements, the extension of the One-Stop-Shop, and the proposed changes to deemed supply rules for platforms. They also suggest that changes be made to reduce the burden on small businesses and simplify procedures for correcting errors.

CIOT Warns of DST’s Potentially Lasting Impact

The Chartered Institute of Taxation (CIOT) warns that the UK’s temporary Digital Services Tax (DST) risks becoming a permanent feature due to the complexity of international negotiations. The DST, which raised 30% more than expected in its first year, was designed as a stopgap measure to tax digital multinational companies until a multilateral solution was agreed upon. However, the lack of progress in OECD talks and the potential for US retaliation against countries adopting such measures have raised concerns. CIOT’s Director of Public Policy, John Cullinane, calls for governments to redouble their efforts to reach a global solution and repeal the DST. The Public Accounts Committee’s report suggests that HM Treasury and HMRC consider lessons learned from DST’s introduction for future tax systems.

Fair Pricing: EU Takes on Online Retailers


The European Union has implemented new rules to enhance transparency in online retail sales, addressing consumer concerns over hidden costs and misleading pricing practices, reports fiscal-requirements.com. Online retailers must display prices clearly, including additional charges like shipping and taxes. The total price of goods and services, including all fees, must be shown at the beginning of the ordering process. Retailers must also provide clear information on delivery and payment methods and any extra charges that may arise. Misleading or aggressive marketing practices are also targeted. Retailers are prohibited from using false or misleading information to promote products or services. These regulations apply to all online retailers in the EU, and non-compliant retailers may face fines and penalties. These regulations aim to promote transparency and protect consumer rights in online retail sales.

GfK study: Swiss shopping power dominates DACH region

Switzerland surpasses Austria and Germany in 2023 with a per-person purchasing power of 49,592 euros, according to GfK’s Shopping Power Study. Austria records an increase of 5.3 per cent and is now ahead of Germany. The total purchasing power is 433.4 billion euros in Switzerland, 239.5 billion euros in Austria and 2,186.7 billion euros in Germany. However, the increases in purchasing power in all countries are being eaten up by rising consumer prices, warns GfK expert Tim Weber. Regional purchasing power levels vary within the countries. The Swiss canton of Zug takes the top position with 79,207 euros per person.

The best retailers in Austria: ServiceValue and SZ present results

The study by ServiceValue, in cooperation with the Süddeutsche Zeitung, examines which retailers in Austria perform best from the customer’s standpoint. 295 retailers from 27 sectors were evaluated based on around 36,000 judgements. Criteria included accessibility, product range, customer service, product quality, transparency, environmental awareness and delivery and return options. The award “Best Retailer” was given to 160 companies, with all categories examined enjoying the buyers’ confidence. Some companies were able to secure the top position through special features. The top 3 companies in Austria are the bookseller Libro, followed by the food retailer SPAR/EUROSPAR/INTERSPAR and the bakery chain Der Mann.

Nestlé subsidiary Bountiful implicated in a rating scandal

Vitamin retailer Bountiful must pay a $600,000 fine for misleading advertising after the US trade regulator FTC accused the company of “review hijacking” on Amazon, Der Spiegel reports. Bountiful allegedly hijacked reviews of well-established products for new supplements to rank them higher in Amazon’s search results. The practice involves linking identification numbers of similar products so that ratings and reviews are combined. Bountiful is accused of doing this for products with significantly different ingredients. The company, now owned by Nestlé, has pledged to stop this practice.

Machine Learning and Generative AI Key to Amazon’s Future

Amazon CEO Jeff Jassy has reflected on the company’s past year, acknowledging its challenges and highlighting its ability to grow demand and innovate. In the company’s annual shareholder letter, Jassy emphasized the importance of embracing change to succeed, citing examples such as the dot-com crash and recession in 2008-2009. He also expressed optimism about Amazon’s prospects and how the team responds to changes.

The letter also discussed Amazon’s recent changes, such as streamlining costs and optimizing its fulfilment and transportation networks for productivity gains and cost reductions. Jassy also announced that corporate employees would be asked to return to the office at least three days a week beginning in May. Despite short-term challenges, Amazon is optimistic about the future of its AWS business, with a robust pipeline of new customers and active migrations to the cloud.

Amazon continues to invest in machine learning to hone its advertising selection algorithms and develop comprehensive planning and measurement solutions. The company has also invested in geographic expansion and new areas such as healthcare and satellite systems. Amazon’s investments and innovations demonstrate its continued focus on long-term growth and customer experience.

Amazon introduces Bedrock, a cloud service for generative AI

Amazon has launched Bedrock, a new API for Amazon Web Services (AWS), which allows developers to use and customize AI tools for generating text or images, reports Engadget. Bedrock is positioned as a cloud-based and configurable alternative to OpenAI’s ChatGPT and DALL-E 2, aimed at businesses and developers. The service enables AWS customers to write, build chatbots, summarize text, classify images, and more based on text prompts. Bedrock users can choose from Amazon’s Titan foundation model and several startup models for customization. The company ensures that users’ input data won’t be used for training the models, addressing privacy concerns. Amazon CEO Andy Jassy emphasizes that Bedrock provides companies with a large foundational model that can be customized for their purposes without investing in the training process. Companies such as C3.ai, Pegasystems, Accenture, and Deloitte are among the early adopters of Bedrock. Pricing details are yet to be announced, and access to the service is currently available through a waitlist.

Dutch Court Rejects VAT Fraud Allegations

The Dutch Tax Authority has failed to provide evidence of fraud involving a dubious supplier, leading the District Court of The Hague to rule that the recipient of the supplier’s goods is entitled to a VAT deduction, reports taxlive.nl. The recipient, a wholesaler of mobile phones and micro SD cards, had an agreement with the Tax Authority to report new suppliers. The supplier, Y BV, issued invoices with VAT but failed to declare them. The wholesaler deducted the VAT, but should have informed the Tax Authority about Y BV being a new supplier. The court decided that the burden of proof for fraud in the chain lies with the Tax Authority, and the supplier’s failure to declare VAT was insufficient to prove fraud.

Deficit-Cutting Plans Target Czech Beer Tax

The Czech Finance Ministry is considering raising the value-added tax (VAT) rate on beer as part of its deficit-cutting plans and a major VAT regime overhaul, reports financialpost.com. The proposed reforms would merge the two lower VAT rates of 10% and 15% into a single 14% rate, while retaining the 21% top rate. Beer, hotels, water, and sports may see a VAT increase. The VAT changes could raise CZK 24 billion ($1.12 billion) for the budget next year. The Czech government is seeking around CZK 70 billion in budget savings or indirect tax hikes to reduce next year’s deficit and address inflation exceeding 16%.

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