Finance News by Mazars Romania - June 2021

Mon | 28.06.2021

Accounting/audit/tax

Finance News by Mazars Romania - June 2021

The digital single market: a new VAT regime designed to be less complex, more fraud-proof, and business friendly – Mazars’ analysis

This year, the European Union (EU) will make another step towards the definitive VAT system, a measure included in the VAT Action Plan, published by the EU Commission in 2017. Starting with 1 July 2021, important VAT and customs changes will be introduced for e-commerce, that were long awaited.

New VAT rules for e-commerce

As of 1 July 2021, all distance sales of goods will be subject to VAT in the MS where the individual is established. The current thresholds will be cancelled; the MOSS scheme will be extended to OSS – a scheme which will also apply to the supply of goods and services, as well as to certain supplies of goods “facilitated” by electronic interfaces (EI).

Electronic interfaces – VAT deemed supplier

As of 1 July 2021, any EI (such as a marketplace, platform, portal, or similar means) who is facilitating a supply of goods will be considered deemed supplier and, therefore, obliged to collect and pay the relevant VAT to the tax authorities. However, for certain activities EI should not be considered as a deemed supplier, such as, but not limited to, processing of payments, listing/ advertising of goods, redirecting or transferring of customers to other EI, etc.

Read more info HERE.

Financial performance of European banks in the context of COVID-19: Mazars’ benchmark study 2021

The COVID-19 crisis continues to undermine global financial stability. While its full impact on the banking sector is yet to be determined, the 2020 annual results let Mazars build a picture of the COVID-19 impact on the expected credit losses (ECL) in banks’ financial disclosures.

Mazars analysed the annual reports of 26 banks in 11 European countries to better understand the impact of COVID-19 on their financial performance. This study is the second edition and follows on their first edition of the report released in September 2020. The study is based on audited information disclosed in the annual reports of participating banks published until 1 April 2021.

The study mainly focuses on the ECL-related impacts of COVID-19 on the European banking industry. It covers:

The extent to which the COVID-19 pandemic has impacted the operating profit or loss, and the 2020 ECL charge;
The consequences on the ECL coverage ratios and the ventilation of gross credit exposure and ECL allowance by stage;
What European banks disclosed on their post-model adjustments and macro-economic assumptions.

Download the report HERE.

Doing M&A in Asia Pacific: Tax traps and structuring opportunities – Mazars’ report

Conducting business in different countries and regions presents its own set of challenges – commercial contexts vary and regulatory environments can be difficult to understand and even harder to keep up with as they change.

With this thought in mind, Mazars published the „Doing M&A in APAC” study: to shed light on tax risks and opportunities related to mergers and acquisitions in Asia Pacific. They provide insight based on their experts' experiences that covers due diligence tax structuring in the region and the tax risks frequently encountered that can threaten the success of deal-making and subsequent integration processes in these fast-growing markets.

Mazars reveals that the main traps are related to transfer pricing and the use of tax losses, though such transactions also benefit from several tax incentives such as amortisations of assets and goodwill, and tax exemptions applicable to mergers or demergers. In doing so, Mazars highlights what businesses can expect from conducting deals in the region, the regulatory challenges they are likely to come up against, and how they can avoid the tax traps while making the most of the structuring opportunities.

Read more info and download the study HERE.

An overview of the transfer pricing documentation requirements and penalties in Europe, Asia Pacific and America – Mazars’ material

The OECD has long attempted to create a harmonized playing field for transfer pricing documentation, although countries have only recently started to apply a more consistent approach based on the recommendations provided. Nonetheless, content, threshold, notification, and submission deadlines differ from country to country. It appears clear how the disharmonized documentation approach in terms of content and structure, even within the same macro areas, makes it more difficult for multinational companies to reduce compliance costs.

Mazars prepared a material about the different types of documentation requirements in the three macro-areas analyzed (i.e., Pan Europe, Asia-Pacific, and America) and explained the thresholds used for the different taxpayers’ obligations. In addition, the material also provides an overview of the administrative penalties imposed.