The finance ministry has published its draft bill to transpose various EU amendments and ECJ cases into national law whilst taking the opportunity to make a number of editorial changes. The main features of substance are:
- Conformity with the amended Parent/Subsidiary Directive, in particular revising the lists of legal forms covered by the Directive to include practically any entity within the EU subject to corporation tax except partnerships able to opt. The Directive provisions will now apply to dividends on shares held through a permanent establishment in a third member state of the EU and the minimum shareholding levels will fall from the present 25% to 20% in 2004-06, 15% in 2007/8 and to 10% thereafter.
- The transmission of electric power and the throughput of natural gas is to be deemed for VAT to have been performed in the country of the customer of the service. Sales of power and gas to a distributor are to be treated as supplies in the country of the distributor; sales to end-users are subject to VAT as supplies in the country of usage (consumption).
- The rules governing the correction of a VAT input tax deduction following a later change of circumstance have been rewritten in considerably greater detail. In particular provision has now been made for the input tax deduction for a current asset to be adjusted to the circumstances (proportion of VAT-able to VAT-free turnover) obtaining in the year of sale/use. If a fixed asset is sold under a different VAT regime than for which it was originally acquired, the adjustment in the year of sale shall assume continued future use under the new regime for the remainder of the adjustment period (five years for equipment, ten for buildings).
- If a retailer redeems a manufacturer's or wholesaler's credit voucher presented by his customer and charges the cost back to the supplier, the latter may henceforth reduce his taxable turnover accordingly. The retailer must reduce his input tax deduction if he retains some or all of the redemption amount for himself.
- Among the various changes to the Tax Management Act, particularly worthy of note is a right of each taxpayer to information on his personal data stored by the tax authorities. This right is restricted if there are security objections, if release of the data would impair the privacy of others, or if finding the data stored would appear to be excessively difficult
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