HThe Cabinet wants to increase the low VAT rate from 6 percent to 9 percent, the ministry reports. This increase will take effect on 1 January 2019. It is important that you prepare for this rate increase in 2018. What does this mean to you? KHN informs and gives advice!
What does this mean to you?
The new rate has an impact on:
- Your administration
- The prices of goods and services
- The processing of new sales prices in checkout and cash register systems, quotations, websites and menus
- Your invoicing and VAT return at the year transition Note: Quotations that you prepare in 2018 for goods or services that you provide in 2019 must also be based on a VAT rate of 9 percent.
KHN: Raising not a good thing
VAT is a levy on the consumer price. This means that retail prices for the consumer will become 3 percent more expensive. Against this higher tax revenue, the Cabinet proposes lower income tax and lower profit tax for entrepreneurs. The Cabinet will now increase the low VAT rate for the first time in 2019. It is clear that KHN does not think this is a good thing. For now it is important to inform you about this development. Then you can prepare for it.
What does this mean for performance taking place in 2019?
If a performance takes place in 2019, but the payment has already been made in 2018, the rate of 6 percent still applies. For example, consider a reservation for a hotel or restaurant that has been paid in advance, while the overnight stay or restaurant visit will not take place until 2019. For payments from 1 January 2019, the 9 percent rate applies.
Change included in Tax Plan 2019
The Cabinet's plans are not yet final. The Cabinet wants to include the change in the VAT rate in the 2019 Tax Plan. This plan will be made public on Budget Day 2018. The House of Representatives and the Senate have yet to approve this plan.
Source: KHN