Retail News CRM

Tag: VAT

  • Indonesia rolls out $52B stimulus package for 2025

    Indonesia rolls out $52B stimulus package for 2025

    Indonesia has unveiled economic stimulus packages totaling IDR827 trillion (US$51.65 billion) for 2025, designed to mitigate economic shocks and address the weakening purchasing power of low- and middle-income groups.

    The stimulus also aims to cushion the impact of an upcoming increase in the value-added tax (VAT) rate from 11% to 12%, set to take effect on January 1, 2025.

    Minister of Finance Sri Mulyani Indrawati said the stimulus measures are carefully designed to provide balanced support, particularly for lower-income segments of society, to ensure their financial stability despite the VAT increase.

    A significant portion of the stimulus, amounting to IDR265.6 trillion, will go toward VAT incentives that benefit a range of sectors. These include micro-, small-, and medium-sized enterprises (MSMEs), essential food staples, education, healthcare, transport, energy, low-cost housing, and financial services. Basic necessities like rice, meat, fish, eggs, vegetables, and milk will remain exempt from the VAT.

    The government and the House of Representatives have decided not to impose VAT on essential commodities needed by the public, she said, adding some IDR394 trillion has been allocated for energy subsidies and compensation, which will cover the costs of subsidised fuel, electricity, and LPG.

    To further support the economy, the government is allocating IDR129 trillion to social aid programmes, including food aid, subsidies for health insurance premiums, and easier access to unemployment benefits for laid-off workers.

    In the automotive sector, the government will offer tax incentives for electric and hybrid vehicles. Electric vehicles and hybrid cars will receive substantial tax breaks, including a 3% reduction in luxury taxes for hybrid vehicles.

    For labor-intensive industries, the government will provide tax exemptions, financing support, and 50% subsidies for workplace accident insurance to encourage job creation and economic growth in this sector.

    In the housing sector, the government would extend VAT exemptions for house purchases. The sector not only meets the public’s basic needs but also has a significant multiplier effect, creating jobs and stimulating economic growth, the minister said.

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  • Philippines imposes 12% VAT on digital services by tech giants

    Philippines imposes 12% VAT on digital services by tech giants

    The Philippines will impose a 12% value-added tax on digital services offered by tech giants such as Amazon, Netflix, Disney, and Alphabet, in a move that aims to level the playing field with domestic players, the country’s Bureau of Internal Revenue (BIR) announced on Wednesday.

    Previously, on Tuesday, President of the Philippines Ferdinand Marcos Jr signed into law the imposition of VAT on non-resident providers of digital services such as streaming services and online search engines.

    Only domestic digital service providers are currently subject to the 12% VAT, BIR said.

    BIR Commissioner Romeo Lumagui said in a statement that the taxation will promote fair competition amongst businesses that are profiting from consumers in the Philippines. A level playing field produces better products and services.

    Tech companies like Netflix, Disney, Google and Amazon have not made any comments.

    The Philippines aims to collect 105 billion PHP (US$1.9 billion) from the VAT between 2025 and 2029. It plans to allocate 5% of this revenue to fund projects for creative industries, the presidential communications office noted.

    According to BIR, digital services provided by foreign firms are considered rendered in the Philippines if the services are consumed in the Southeast Asian nation.

    Since the Covid-19 pandemic, tech giants have experienced higher usage in Southeast Asia, but they also face increasingly stringent fiscal tax regimes.

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  • Value-added tax to be cut to 8 pct from February

    Value-added tax to be cut to 8 pct from February

    A draft government decree reduces value-added tax on many products and services from the current 10 percent to 8 percent from Feb. 1.

    The decree on tax reduction to foster economic recovery approved by the National Assembly will also make expenses on pandemic prevention deductible.

    The VAT cut will lead to a loss of some VND49.4 trillion (over $2.1 billion) in revenues, according to the Ministry of Finance.

    The deductible expenses will lead to a loss of VND2 trillion.

    The lower VAT rate will not apply to telecommunications, information technology, financial activities, banking, securities, insurance, real estate, metal, and prefabricated metal products, mining (excluding coal), coke, refined petroleum, chemicals, and chemical products, and goods and services subject to excise tax.

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  • Now tourist can claim VAT refund in downtown Bangkok

    Now tourist can claim VAT refund in downtown Bangkok

    According to the announcement by the government’s Reveue Department regarding ‘Downtown VAT Refund for Tourist’, the campaign has kickstarted an initiative to set up counters in numerous locations across central Bangkok to help tourists proceed with VAT refund upon shopping at permitted VAT refundable retailers. VAT refund will be returned to tourists in the form of cash in Thai Baht, encouraging them to continue shopping in Thailand with ease and convenience. Apart from helping tourists, the campaign is initiated to promote growth and balanced income distribution to small businesses.

    As one of the founding parties of VAT Refund Center (Thailand) Co.,Ltd, Siam Piwat Co., Ltd. is proud to be the official partner and the representative to assist tourists with VAT refund processes in these 5 locations across Central Bangkok; Siam Paragon, CentralWorld, Central Chidlom, Robinson Sukhumvit,  and The Emporium. As one of the partnering department stores, Siam Paragon has completed all preparations to help and service incoming tourists at the highest capacity.

    Senior Executive Vice President for Siam Piwat Co., Ltd. retail business development division Charnchai Cherdchoowongtha-nakorn said, “Siam Paragon is delighted to fully support the government’s policies and work with the Revenue Department. ‘Downtown VAT Refund for Tourist’ is set up to be a key area on G Floor where tourists can find conveniently, as it is located by one of our entrances connected to BTS Skytrain and taxi stops. Additionally, adept, knowledgeable and service-minded staff have been assigned to accomodate tourists with paperwork and essential procedures in order to fully and successfully comply with policies from the Revenue Department.”

    “Not only will shopping tourists of Siam Paragon, Siam Center, and Siam Discovery find it convenient to proceed with VAT refund at Siam Paragon, all tourists who have purchased goods, in accordance with all policies by the Revenue Department are welcomed to complete all necessary procedures at our department stores. The convenience of VAT refund at Siam Paragon is extremely helpful for those who have purchased in the popular shopping destination Siam as hundreds of SME businesses, small retailers and corporations are located in the area, covering an vast space of 2,000,000 sqm, with over 20 hotels to accommodate international tourists in more than 3,000 rooms available – with extra support from Bangkok’s BTS Skytrain system, connecting Ratchathevi and National Stadium to Siam station.”

    “According to statistics, out of 400,000 – 500,000 shopping tourists per day at One Siam, an average of 938 VAT Refund Form ( P.P. 10) have been filled each day from shops and retail spaces in Siam Paragon, totaling to a signification amount of 342,494 applicants.”

    “Based on Siam’s all-round advantages, we are confident that our VAT refund counter on G Floor of Siam Paragon will be the key point of service for all international tourist groups. Not only will these counters help tourists in making better decisions about visiting Thailand, the amount of amount refuned back to them will potentially be spent on additional purchases in Thailand. Consequently, it would help boost our economy. I can see this initiative having positive influence on the number of Thailand-bound tourists – more by volume and frequency,” Charnchai stated.

    The initiative of establishing VAT refund counters directly impacts the tourism industry on multiple levels: 1. Amount of retained money which tourists have spent after receiving VAT refund helps small retailers and businesses, which, in turn, strengthens Thailand’s economy; 2. The growth in sales volume and sales value is proportional to the rate of economic growth and revenue from tourist spending; 3. A significant decline in VAT refund at Suvarnabhumi and Don Muang Airport reflects positive a sign of service improvement; 4. VAT refund for tourists promotes better opportunities for local retail shops to generate more sales.

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  • Taiwan’s VAT On Online Retailers Becomes Law

    Taiwan’s VAT On Online Retailers Becomes Law

    On December 28, Taiwan’s President Tsai Ing-wen signed into law the amendment to the Value-Added and Non-Value-Added Business Tax Act to impose tax on foreign online sellers’ supplies to Taiwanese consumers.

    The amendment is intended to raise additional revenues and level the playing field for Taiwanese bricks-and-mortar retail and service businesses.

    The Ministry of Finance is to draw up the required tax regulations and procedures. In addition, it is to establish a website for simplified business registration and for filing VAT returns and paying VAT.

    Foreign online suppliers selling cross-border goods and electronic services to end consumers will have to register for tax in Taiwan through a permanent establishment, or appoint a VAT or non-VAT tax representative. The permanent establishment or agent will be required to file the necessary bimonthly tax returns. Significant penalties will be imposed for non-compliance.

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  • Global Blue collaborates on Chinese VAT refund scheme

    Global Blue collaborates on Chinese VAT refund scheme

    Tax-free specialist Global Blue has partnered with the Bank of China to launch a VAT refund service to overseas tourists in Shanghai.

    Travellers in Shanghai are now able to save 9% on their purchases as China has introduced its first tax-free shopping scheme for foreign visitors. The scheme will be among the first of its kind in mainland China, allowing eligible travellers to reclaim the VAT imposed by the Chinese government, when making purchases within the country.

    For travellers, eligibility for VAT refunds will be based on a set of simple criteria. These include possession of a non-Chinese passport (or specified ID from Hong Kong, Macau and Taiwan), receipt of purchase showing spend of over RMB500 ($72) in one store on the same day, and proof that the traveller has remained in mainland China for no more than 183 consecutive days.

    If these eligibility criteria are met, merchants simply have to provide a VAT invoice, then issue the shopper with a Tax Refund Application form provided by the Chinese Government, which includes the description of purchased goods and the traveller’s details.

    Global Blue will work with Bank of China to encourage local retailers to sign up to the scheme. It will also provide licensed retailers with ongoing training to sales staff and consult on the processes surrounding the issuing and completion of VAT refunds.

    Already almost 200 stores in Shanghai have already signed up to the tax-free shopping scheme, including major department stores [e.g. Takashimaya, Pacific, Parkson and Bailian (Group) Department Stores], luxury brands (e.g. Chanel, Hermes, Tiffany and Louis Vuitton), high street names (e.g. Zara, Bershka and Marks & Spencer) and local retailers (e.g. Silk King, Lao Feng Xiang Jewellery and Chow Tai Fook Jewellery).

    Global Blue CEO Jacques Stern commented: “We are excited about launching this partnership with Bank of China, a true market leader in the international banking space. The VAT refund service represents a great opportunity for merchants in Shanghai to attract high-spending international travellers and encourage higher spend in-store. For visitors to the city, this scheme will bring obvious benefits, allowing them to shop and spend with leading Chinese merchants for less.”

    Bank of China vice president Mr. Wang added: “This is a very exciting period for Shanghai’s retail sector and we are confident the introduction of these services will be a powerful tool in helping businesses connect with valuable international shoppers. Global Blue’s experience of promoting and supporting Tax Free services around the world make it a valuable partner and we look forward to a long and happy working relationship.”

    In addition to merchant support, Global Blue will manage marketing activities inside and outside of China to increase traveller awareness of the VAT refund scheme. Promotional channels will include Global Blue’s website, app and a wide range of traveller focused collateral including SHOP Maps and point-of-sale materials. The partnership will also see Global Blue collaborating closely with local governments’ tourism departments.

    In addition to VAT refund services in Shanghai, Global Blue has also named Bank of China as a banking refund partner for returning Chinese shoppers across the country. Bank of China will operate refund counters from 10 branches throughout China, making it easier for Chinese consumers to claim overseas refunds back home.

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