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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Feautured article: Tax Planning International: Indirect Taxes – World Wide VAT forum: E-commerce

In April 2013 we have organized a workshop for our clients where we have presented the current and future ecommerce legislation in Switzerland, Europe and worldwide, discussed tax related trends among ecommerce businesses and tax authorities and presented our vies of the future cross-border tax and business implications for ecommerce. We have spent quite some time discussing how the ecommerce tax compliance will need to be modernized and automatized in order to meet the requirements of the ecommerce businesses of tomorrow and presented our vision on how to meet this goal of automated, scalable, seamless and affordable tax compliance service offering.

As a follow-up to the workshop we have prepared and publicized an article in the May 2013 edition of Tax Planning International: Indirect Taxes. For your convenience you can download its copy here.

USA: West Virginia – Affiliate nexus adopted for sales and use tax to cover also Internet-based business

Effective January 1, 2014, West Virginia expands the definition of a “retailer engaging in business in this state” for sales and use tax purposes to include affiliates which operate a website or Internet business within the state.  Specifically, “any retailer that is related to, or part of a unitary business with, a person, entity or business that . . . is a subsidiary of the retailer, or is related to, or unitary with, the retailer as a related entity, a related member or part of a unitary business” that meets one of the following criteria will be required to collect and remit taxes in West Virginia: Find out more

USA: Senate passes Marketplace Fairness Act with amendment

As reported, the US Senate on May 6 passed, by a vote of 69-27, the Marketplace Fairness Act of 2013, which provides that full member states of the Streamlined Sales and Use Tax Agreement and non-member states that meet certain minimum simplification requirements may require remote sales tax collection. The Senate also passed a perfecting amendment by a vote of 70-24.

In detail

S. 743 is identical to the original version of the bill, S. 336, introduced on February 2. The legislation grants remote seller collection authority to states that are full members of the Streamlined Sales and Use Tax Agreement (SSUTA). States that are not SSUTA Find out more

Montenegro: Proposed VAT rate increase from 1 July 2013

The government proposes a 2% increase in the standard VAT rate from 17% to 19% in Montenegro. If the proposal is accepted by the Parliament, the VAT rate increases will take effect from 1 July 2013.

What does it mean for you

We recommend reviewing the VAT implications on your business operations in Montenegro due to these changes, to ensure full compliance with regard to VAT rules, rates and regulations. Systems must be adjusted and contracts may need to be reviewed. Please see news update on PwC’s GlobalVATOnline here.

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Slovenia – VAT rate increase with effect from 1 July 2013

The Slovenian Parliament has approved an increase in the standard and reduces VAT rates. Subject to the approval from the National Council, the increases will be effective from 1 July 2013, as follows:

  • Standard VAT rate: from 20% to 22%;
  • Reduced VAT rate: from 8.5% to 9.5%;

No changes have been made to the list of goods/services which are subject to the reduced VAT rate.

What does it mean for you

We recommend reviewing the VAT implications on your business operations in Slovenia due to these changes, to ensure full compliance with regard to VAT rules, rates and Find out more

EU: Results of public consultation on the review of the existing legislation on VAT reduced rates published

The results of the public consultation on the review of the existing legislation on VAT reduced rates are now available online.

A total of 333 contributions were received and the greatest number of submissions originated from Belgium (76), followed by those from Germany (65), France (52) and the United Kingdom (48).

The EU Commission’s summary report as well as an index and the individual contributions can be consulted via this TAXUD page (click-through to CIRCABC). Find out more

France: Towards a super reduced VAT rate for digital press publications

According to a recently published press release, France is considering to apply a super reduced VAT rate for online press publications (2,1% instead of 19,6%) and this without the approval of Brussels.

As reported in previous posts, France and Luxembourg already started on 1 January 2012 to apply (super) reduced VAT rates for e-books (5,5% in France and 3% in Luxembourg) making them the cheapest countries to sell e-books in the whole EU.

The EU Commission saw this as an infringement against the EU VAT Directive and initiated infringement proceedings against both France and Luxembourg (Case No 2012/4080).

With this new proposal to Find out more

USA: Washington state issues new regulations on software and digital products

The Washington Department of Revenue released new regulations on the taxability of software and digital products. The two new regulations, WAC 458-20-15502 and -15503 were adopted February 25, 2013, and became effective March 28, 2013.  The Department issued the new regulations to clarify the impacts of previous legislation taxing digital goods and to address other tax issues related to computer hardware, software, and computer services. Taxpayers engaged in selling software and digital products in Washington should review these regulations as they may provide clearer guidance for distinguishing between taxable and nontaxable digital goods, software, and services. [Computer Hardware, Software, and Digital Products, Washington Department of Revenue, WAC 458-20-155/15501/15502/15503] Find out more