Germany: New Obligations and Tax Adjustments
As every year, German VAT legislation evolves to align with European directives and new fiscal guidelines. For 2025, several important adjustments will come into effect, impacting businesses operating in Germany.
Here are the key points to note:
Mandatory electronic invoicing: German companies must now issue electronic invoices for B2B transactions.
Modification of VAT exemptions for educational services, requiring compliance with new requirements.
Changes to territoriality rules for supplies with installation, limiting reverse charge to services involving elements belonging to the customer.
EU harmonization, including the extension of the small business scheme to cross-border activities and the application of VAT on virtual events based on the participant's place of residence.
Reduction of the fiscal archiving period, shortened from
10 to 8 years.
Increase in the quarterly reporting threshold, raised from
€7,500 to €9,000.
Upcoming abolition of the VAT warehouse regime (0%), effective from January 1, 2026, requiring affected businesses to adapt their logistics processes now.
Spain: End of Tax Benefits and Adjustment of Reduced Rates
The Spanish government recently adopted Law 7/2024 of December 20, introducing several significant VAT changes applicable from December 22, 2024. In addition, Royal Decree-Law 4/2024 of June 26 provides for VAT rate updates on certain food products starting January 1, 2025.
Here are the main changes to consider:
Extension of the reduced 4% rate to fermented
milk, now in effect.
Requiring depositors to pay VAT monthly and ensure its payment before any withdrawal.
Depuis le 1er janvier 2025, les taux de TVA sur certains produits alimentaires ont été modifiés comme suit :
Common bread, milk, cheese, eggs, and fruits are
now taxed at 4%.
Seed oils and pasta have increased to 10%, while olive oil now benefits from a 4% rate.
Finland: Rate Increases and New Opportunities for Small Businesses
Since January 1, 2025, Finland has implemented several tax changes:
Increase from 10% to 14% for several goods and services, including:
- Printed and electronic books,
- Pharmaceutical products,
- Sports and fitness services,
- Passenger transport,
- Tourist accommodations.
Reduction of VAT to 14% for sanitary products and children's diapers, previously taxed at 25.5%.
Increase in the VAT threshold for small businesses, raised from €15,000 to €20,000, allowing more businesses to benefit from an exemption.
Upcoming VAT increase on confectionery and chocolates, scheduled for June 1, 2025, rising from 14% to 25.5%.
Implementation of the new European VAT scheme, enabling small businesses to be VAT-exempt across the EU if their annual turnover does not exceed €100,000.
