Webcast: Fundamental VAT changes to electronically supplied services – Making sure your business is ready

Do you sell services to consumers? Are they electronically supplied? Are your customers in the EU? Are you ready for the B2C 2015 VAT changes?

There are significant changes on the horizon for the VAT paid on electronically supplied services. Any business headquartered in any country selling broadcasting, telecommunications and electronically supplied services to EU retail customers will be affected by these changes. This includes businesses in the US, China and Australia.

The new legislation is effective from 1 January 2015. It will have the effect of changing the place of supply, and the country of taxation, of business to consumer (B2C) telecoms, broadcasting and ‘electronically supplied services’ from the country in which the supplier is established to the country in which the consumer is resident. One effect of this is that, rather than applying a single VAT rate in its country of establishment, affected businesses may be required to apply the local VAT rate in 27 different member states.

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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.

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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.

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Next meeting of PwC’s B2C 2015 working Group: 5 September 2013

Date: Thursday, 5 September 2013

Timing: 9.30 – 16.30 CET

Location: Brussels (address)

With the 2015 VAT Implementing Regulation now being adopted, which rounded the EU legislative framework, businesses that will be affected by the changes in legislation should now have a clearer picture of their 2015 footprint and the critical issues they need to address in the run-up to 2015.

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US webcast in relation to the evolving VAT landscape for EU established sellers of e-services

As an update to our previous webcasts on the 2015 EU VAT changes to electronically supplied services, we are pleased to inform you that we organize a follow-up webcast on August 22, 2013 at 12:00PM (EDT) to address the agreement reached by the EU Ecofin Council on June 21, 2013.

The council agreed upon the VAT Implementing Regulation addressing the new treatment for sales of electronically supplied services (e-services) by EU established sellers to EU private individuals effective January 1, 2015. The new rules will require an EU established seller to account for VAT for such sales at the rates where the EU private individuals are located rather than the EU established seller’s location as, historically, it has been done. The list of services considered e-services is broad and includes mobile applications, downloadable or cloud accessible games and music, and online subscription services.

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South Africa: VAT registration of foreign ecommerce service suppliers as of 1 January 2014

As of 1 January 2o14 all non-South African suppliers of ecommerce services will be required to register as VAT vendors in South Africa and account for output VAT on its supplies to South African residents.

E-commerce services are defined in the South African VAT Act to include any supply of services where the placing of the order and delivery of the service is made electronically.

The VAT registration requirement for a non-resident supplier of ecommerce services is triggered by either the supply of such services to a South African resident recipients (either B2B or B2C) or where payment is affected from a South African registered bank.

The level of supplies made by the non-resident in South Africa is irrelevant, meaning that there is no minimal turnover threshold and the obligation to VAT register arises from the very first South African Rand generated with e-service to SA based clients.

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GlobalVATOnline: New 2015 B2C module!

We are pleased to present our new 2015 module on GlobalVATOnline (GVO), which has been launched ahead of the EU VAT change on 1 January 2015 when B2C supplies of telecommunications, broadcasting and electronic services made by EU based companies will change from being taxed where the supplier belongs to being taxed according to the VAT rates applicable where the customer is located or is normally resident.

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France moves closer to taxing the digital economy

The digital economy has revolutionized traditional ways of conducting business around the world, while international tax rules have been slow to adapt to this new business environment. Many countries have started discussing ways to address this situation. At the international level, the recent G8 Summit held in Lough Erne, Northern Ireland, on 17 and 18 June, 2013, the upcoming OECD action plan on BEPS expected in July 2013 and the next G20 summit in September will likely provide additional guidance and proposals on the taxation of digital economies.

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EU: B2C 2015 VAT Changes – Implementing Regulation adopted in Ecofin last Friday

We are happy to announce that the EU Ecofin Council reached political agreement on the proposal for VAT implementing Regulation on B2C 2015 place of supply issues, in a meeting in Luxembourg last Friday 21 June.

It will apply as from 1 January 2015. It will be officially released in the next weeks after clean up and translation to the EU official languages.

Important to note is that this Implementing Regulation has direct effect and does not need to be implemented/transposed by the EU Member States in their national VAT legislation (primary, secondary or administrative guidance).

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