The new Czech virtual currency, Czech Crown Coin (officially named by the authors “CZC”) was for the first time offered to the public this week (Tuesday, 19th August) at noon, as part of a press conference held by its founders. The interest of the public in purchasing CZC was bigger than expected. The pre-mined amount released in the initial edition of 100,000 CZC was sold out within nine and half hours, whereby a third of this limited amount was sold already within the first hour! It is planned that within the next days, an additional set of 100,000 CZC will be offered to the public. After these ten days (on Friday, 29 August) an exchange platform will be opened on the official website of CZC.
Another virtual currency was “borne” today (17 July 2014) at noon. A Czech Crown Coin (the abbreviation used by the authors is “CZC”) as it is called, is established. The announced amount of coins is 100 million and the currency will be, similarly to other virtual currencies, mined. The mining website was opened at the same moment. Half of the total volume of CZCs has been already pre-mined, the other half should be mined within the next 4 to 10 years. The distribution of a limited number of free-of-charge coins to registered Czech citizens is announced to start in the first half of September 2014.
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The Advocate General (AG) released her opinion in the interesting VAT case dealing with the situation whether a foreign company can be regarded as having a fixed establishment in the supplier’s Member State by using the supplier’s infrastructure.
On 13 June the EU Commission has published additional guidelines on the audit of the VAT Mini One Stop Shop scheme (MOSS).
The additional MOSS guidelines are available on the EU Commission’s website in English (Link). It will be translated in all EU languages, as well in Chinese and Japanese.
The guidelines include additional information for businesses signing up for the Mini One Stop Shop and notably on:
how to best contact businesses as part of an audit;
the method businesses should use to provide the information required by an audit.
These are recommendations only and not binding for the EU Member States.
The Michigan Court of Claims recently held in a summary disposition that remotely accessed software is not subject to Michigan sales and use tax. The court held that software accessed remotely was neither tangible personal property nor ‘used’ by the taxpayer as defined under Michigan statutes. Further, any prewritten computer software provided to the customer was only an incidental component of the various services purchased and did not subject the charges to tax. [Auto-Owners Insurance Company v. Department of Treasury, State of Michigan Court of Claims, No. 12-000082-MT (March 20, 2014)]
On 4 April, the European Commission has published Explanatory Notes to prepare businesses for the new VAT rules for telecom, broadcasting and electronic services, which will enter into force on 1 January 2015.
The aim is to help businesses to be fully prepared on time for the change-over, whereby VAT on telecom, broadcasting and electronic services will be charged where the customer is based, rather than where the seller is.
The Explanatory Notes are available on the EU Commission’s website in English (click link). (It will later be translated in all EU languages, as well as in Chinese and Japanese.)
We will discuss the key provisions and critical issues of the EU Commission’s Explanatory Notes with businesses, delegates of the Member States and the Commission during our next B2C 2015 Working Group meeting in Brussels, on 23 April 2014.
On 28 March the South African National Treasury published its “Electronic Services Regulations” in the Government Gazette and released a media statement, announcing a postponement of the effective date till June 1st, 2014.
The changes will make it compulsory for foreign e-commerce suppliers of electronic books, music and other digital services to register for VAT in South Africa.
Canada joins those countries that make efforts to tax supplies provided by non-established businesses via the Internet to Canadian residents. As recently reported in PwC’s GlobalVATOnline the Canadian government launched a public consultation as part of a 2014 Budget proposal to ensure tax fairness and invites the public to give their opinion on what actions should be taken in order to effectively collect sales taxes on e-commerce sales to residents of Canada by foreign-based vendors.
As previously reported here, South Africa intends to impose VAT on electronic / digital services (“eservices”) supplied by non-established businesses to recipients in South Africa with effect from 1 April 2014.
At PwC’s upcoming Webcast Gerard Soverall (Partner, PwC South Africa), specialized in e-commerce and cross-boarder Indirect Taxation will provide an update on the latest developments. This session is designed to inform the participants of the content of the regulations and to discuss the administrative and enforcement challenges that may arise.
In line with the new VAT legislation, set to take effect on 1 April 2014, electronic/digital services (“eservices”) supplied by a business outside South Africa to a recipient in South Africa will require the supplier to register for Value-Added Tax in South Africa.
The recipient is deemed to be located in South Africa if:
- that recipient is a resident of South Africa or
- where payment originates from a bank registered or authorized in terms of South African law.
It is important to realize that this definition applies supplies made both to B2B (Business – to – Business) and B2C (Business – to – Consumer).