The End of the VAT exemption for goods up to €22 – No Transitional Period
22 June 2021
As from 1st July 2021, the European Union will introduce new VAT e-commerce rules to...
The VAT Department in collabotaion with the GRTU helped organise a meeting for software programme providers held during this week to which Council member Marcel Mizzi attended. The meeting was mainly targeted at software developers who are involved in the development and deployment of computerised Point of Sale (POS) systems.
The VAT Dept explained that a campaign is going to be lauched shortly to promote the advantages being offered to traders who post their VAT returns online. He also said that the department is planning to push the idea of standardised electronic invoicing that would be indispensable in B2B business. A working group will be set up with members from the constituted bodies to discuss these initiatves.
The new measures that were going to be introduced with the intention of curbing VAT fraud were explained. The department is aware that there are software based POS systems on the local market that are specifically designed to allow the user to change or delete transactions after they have been posted. This would usually be through a hidden function that would enable the shop owner to remove or change a transaction once it has been posted which is of course highly illegal. Changes that have been made recently in the VAT Act which make this a criminal offence and that are harsh penalties stipulated within the law. The software supplier that knowingly supplies software with these loopholes is committing a criminal offence himself and would be held criminally liable. The department is going to start investigating these abuses. Developers who are found to be involved in the provision of software with these loopholes will be prosecuted to the full extent of the law. Even in cases where computerised stock control systems are used together with a fiscal cash register, if the audit trail on the computer system is tampered with, it would still be a violation of this law.
Numerous developers present during the meeting, pointed out that data can be manipulated outside of the POS application and this surely would not be the responsibility of the suppliers. Mr. Sammut stated that from now on before an exemption is awarded the software is going to be examined to ensure that it is difficult if not impossible to tamper with the data outside of the POS application. He also said that it is up to the department to prove complicity and this would not be the case when there is none.
These exemptions allow shop owners to use a computerised POS systems instead of a fiscal cash registers. Many of those present agrued voiciferously that they could not be held responsible for the user's actions. They said that if this law were to be enforced most of the POS systems on the market would not be deemed legal and would have to be replaced. Although this would ensure a steady stream of new business for the developers, the business owner would have to invest in news systems which come at a considerable cost. The VAT Dept was adamant about this and maintained that the law is clear enough.
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