With effect from 1 October 2013, the standard VAT rate on goods and services has increased from 21% to 22%. The reduced rates of 10% and 4% are kept unchanged.
The correct rate to use for the supply of goods is the rate prevailing on the first of the following events:
- The transfer of the goods through delivery;
- Date of issuance of the invoice; or
- Payment of the amount due.
Where goods are provided on a rolling (continuous) basis, the VAT rate at the end of the calendar month will have to be used.
For the provision of services, the tax point occurs on the earlier of the following events:
- An invoice is issued;
- The amount due is settled; or
- Completion of the services.
The primary purpose of increasing the VAT rate is to meet the Euro currency 3% GDP deficit target. If the increase had been postponed, this might have resulted an increase in excise duties on fuel, the regional production tax (IRAP) and the corporate income tax (IRES).
