Category Archives: News & alerts

Australia – Budget announcement confirms GST obligation of non-established digital service providers

As anticipated in our recent post tonight’s Budget announced new law in relation to the GST treatment of digital products and other services imported by Australian consumers, based on the OECD guidelines for the taxation of cross-border intangibles. The new law will apply to supplies made on or after 1 July 2017. The closing date for the submission of comments on the draft legislation is 7 July 2015, which does not give affected taxpayers long to consult on the process.

Find out more

South Korea – VAT on electronic services provided by foreign entities – changes as of 1 July 2015

Korea joins the group of countries which require non-established companies to register and account for on their B2C sales of electronic service into South Korea.

The VAT law has recently been amended to apply VAT to the supplies of electronic services (e.g. applications, games, music, films, electronic documents, software, etc.) purchased from non-resident service providers (i.e. offshore app developers or through offshore open markets app stores).

Find out more

EU – VAT Committee issued its Working Paper on the scope of the notion of electronically supplied services

The Belgian tax authorities submitted questions to the VAT Committee regarding the notion of electronically supplied services as referred to in the EU VAT Directive and the Implementing Regulation, the possible interaction of this type of services with other services and the issue of VAT exemption of such services.

Find out more

Australia – GST registration obligation for non-established e-service providers

On 9 April 2015, the Australian Treasurer announced that the government will be introducing new GST measures aimed at overseas companies supplying digital services into Australia. The Treasurer stated that “a company providing intangible services into Australia, such as media services or so on, wherever they are located they should charge GST on those services.”

Specific details of the proposed changes are not available yet, however, they are widely anticipated to be announced in the May 2015 Budget (on 12 May 2015).

Find out more

Albania – VAT registration obligation for non-established B2C e-service providers

Albania joined the group of countries which require non-established e-service providers to register for VAT for supplies made to private individuals.

Effective from 1 January 2015 the Albanian VAT legislation deems the place of supply of “telecommunication, transmission and electronic services” to non-taxable persons to be where the non-taxable person receiving the service is “placed, has a permanent address or resides usually”, regardless of the place where the supplier is established.

Find out more

Luxemburg – e-books are subject to the standard VAT rate as of 1 May 2015

The Luxemburg tax authorities were rather quick to the react on the ECJ’s recent decision on the VAT treatment of e-books. As reported in our previous post, in the infringement procedure against Luxemburg and France the court held that these countries incorrectly applied reduced VAT rate to the sale of e-books.

It is confirmed in a “Circular” published by the tax authorities on 16 March that Circular 756 is revoked with effect from 1 May 2015, and as of that date the standard VAT rate of 17% should be applied to the sale of e-books. (Please refer to the news update on PwC’s GlobalVATOnline.)

Find out more

Argentina – Turnover tax regime for digital supplies suspended by the Tax Authority of Buenos Aires for an indefinite period

The Tax Authority of Buenos Aires (AGIP) has established a new turnover-based (i.e., provincial sales tax) withholding tax system for foreign suppliers of e-services to Argentinian private consumers located in Buenos Aires (B2C supplies).
According to initial provisions of the new regime, effective February 1, 2015, withholding agents (Argentine credit card companies) that collect payments for such services should withhold 3% turnover tax from the payments made by final consumers to the non-resident service providers. Credit card companies have, however, formally asked the AGIP for additional time to make the necessary amendments to their systems, enabling them to identify whether the payments relate to taxable services to be used in Buenos Aires. As a result, the AGIP has postponed the enactment of the new regime until withholding agents can adequately modify their systems to be able to collect the tax.

Find out more