Category Archives: News & alerts

EU: Practical guidelines for businesses on new VAT rules for telecommunications, broadcasting and eservices

The EU Commission has published practical guidelines on the mini-one-stop-shop to prepare businesses for the new B2C VAT rules for telecoms, broadcasting and eservices, which will enter into force with 1 January 2015.

The aim is to help businesses to be fully prepared on time for the change-over, whereby VAT will be charged in the country where the customer is based.VAT will have to be collected by all providers of telecom, broadcasting and eservices, regardless whether they are established inside or outside of the EU. Find out more

EU: Taxing the Digital Economy

“Today’s tax systems were conceived in a pre-computer age. So it is no surprise that they often clash with the modern, digital economy. Taxation must not be an obstacle to all that is good about the digital revolution. Yet, we must also ensure that the digital sector plays fair and pays fair.” These are the words of Mr. Šemeta, EU Commissioner for Taxation, Customs, Statistics, Anti-fraud and Audit, published in the recent press release of the European Commission.

“The digital sector must contribute fairly to public finances. Currently corporate tax avoidance and aggressive tax planning are particularly problematic in the digital economy. This is due to the global and intangible nature of these companies, and the fact that today’s tax rules were not designed with e-commerce in mind. As a result, the taxes paid by the digital economy are frequently not in line with the presence and profits of this sector in the EU.”

Find out more

EU: Travel agents can apply TOMS to all their travel sales

The special VAT regime (taxation of the margin) that applies to travel agents and to tour operators (incl. of on-line travel agencies) – the TOMS – has just recently been commented on in detail in eight judgments handed down by the Court of Justice of the European Union. The eight decisions all relate to the issue of whether the special VAT regime must only apply in a transaction between a travel agent and a “traveler” or whether the regime must apply to any transaction falling within the scope of that scheme between a travel agent and any client. One of the decisions involving Spain also dealt with a few separate issues – mostly specific to Spain – apart from the calculation of the margin itself.

Find out more

France: Compulsory electronic submission of accounting entry journal as from 1 Jan 2014

As from 1 January 2014, companies doing business in France, will be faced with a new obligation, the compulsory electronic submission of the accounting entry journal, so called “FEC” (“Fichier des écritures comptables”).

This obligation is applicable in case of tax audits as from 1st Jan 2014 with a back-dated effect to Fiscal Years 2011/2012/2013.

The e-file must include all the lines of accounting entries: no centralised/no aggregated entries. Find out more

EU: Finalised version of 2015 VAT Implementing Regulation is now been published on the Council’s website

The Implementing Regulation on the B2C 2015 place of supply changes, which was adopted last June, has now been published on the Council’s website. It amends/complements VAT Implementing Regulation 282/2011 on the place of supply of services. The regulated provisions concerning the B2C 2015 VAT changes have effect as from 1 January 2015.

You will find the regulation in English (here), in German (here) and in French (here). It is also available in many other official languages of the European Union.

For more information, we refer to our previous post here.

South Africa: Update on taxation of eservices

Further to our previous blog post, the South African Revenue Service (“SARS”) is planning to implement new VAT legislation which targets eservices provided by foreign (non-established) businesses to customers located in South Africa.

We have mentioned that at the end of August PwC South Africa was going to have a meeting with SARS and the National Treasury on this topic, in respect of which we are now pleased to provide you with an update. All parties agreed at the meeting that there are a number of issues that need to be addressed in respect of the proposed amendments. Nevertheless, there was consensus that the amendments need to proceed as a matter of priority, to ensure that there is no loss of tax revenue on these types of supplies, particularly as this is an area where trade is growing.

Find out more

USA: Digital products and remote sales subject to sales tax in Minnesota

On May 23, 2013, Minnesota Governor Mark Dayton signed H.F 677, which makes significant changes to Minnesota’s sales and use tax, including taxing digital goods, adding click-through nexus provisions, authorizing multiple points of use exemption certificates, and requiring remote sellers to collect and pay sales and use tax consistent with federal legislation.

Find out more

USA: Products transferred electronically subject to sales and use tax in Maine

Effective June 26, 2013, Maine sales tax applies to products transferred electronically. A “product transferred electronically” is sold in Maine if:

– the product is delivered electronically to a purchaser located in Maine;

– the product is received by the purchaser at the seller’s location in Maine;

– a Maine billing address is provided by the purchaser in connection with the transaction; or

– a Maine billing address is indicated in the seller’s business records.

A “product transferred electronically” is a digital product transferred to a purchaser electronically, the sale of which in non-digital physical form would be subject to tax as a sale of tangible personal property.

This legislation, H.P. 1079, was passed despite the Governor’s veto.

USA: Missouri adopts affiliate and click-through nexus standards for sales and use tax

On July 5, 2013, Missouri enacted S.B. 23 which provides affiliate and click-through nexus standards for sales and use tax purposes.

Out-of-state vendors selling taxable products or services to Missouri customers should review whether activities of in-state affiliates or third parties create a sales and use tax registration and filing obligation with the state. This is relevant also for ecommerce vendors.

Find out more

South Africa: Further news about the planned VAT taxation of eservices (B2B and B2C)

As reported there is new draft VAT legislation in South Africa, which is planned to be implemented in early 2014, which targets electronically supplied services provided by foreign (non-established) business to customers located in South Africa.

Whilst most of us are familiar with the rules and administrative practices which operate within the EU and Switzerland/Norway regarding the supply of such services by non-established businesses to private customers (B2C), it is important to recognize that South African VAT legislation does not currently distinguish as between B2B supplies and B2C supplies and refers generically to “imported services”. Thus whilst the intended “target” may well be the B2C sector it appears that the B2B sector may be equally impacted due to the absence of the distinction referred to above.

Find out more