USA: Another step towards Internet Sales Tax

US Senate has passed the Marketplace Fairness Act yesterday which aims at introducing collection of online sales tax in the US directly from online retailers.

Next stop: House of Representatives.

Here is the link to the text of the bill passed by the Sebate on 6 MAy 2013 and here an article which nicely summarizes pros and contras of the proposed bill.

 

 

 

 

USA: Kansas expands sales and use tax nexus

On April 16, 2013, Kansas Governor Sam Brownback signed a new bill – S.B. 83, which generally creates a presumption that out-of-state retailers are doing business in the state for sales and use tax purposes based on the activities of other persons, applicable starting July 1, 2013.

The bill also adopts “click-through” nexus, applicable to sales made 90 days after the bill is published in the Kansas Register. Out-of-state retailers should be aware that, following the enactment of S.B. 83, the activities of an unrelated entity or person could potentially create sales and use tax nexus in Kansas.

Nexus based on activities of other persons

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Luxembourg: VAT rate increase as of 1 January 2015

In his recent “State of the Nation” speech Luxembourg’s Prime Minister, Jean-Claude Juncker announced that the standard VAT rate in Luxembourg will increase with effect from 1 January 2015 (i.e. from the date when the new VAT rules for B2C sales of eservices will become applicable in the EU). Mr. Juncker has explained, that this VAT rate increase should help Luxemburg to counterbalance the expected loss of the VAT revenues due to new VAT rules on eservices.

Current standard VAT rate in Luxembourg is 15%. Even though the new VAT rate has not been disclosed yet, we understand that the Luxembourg’s government intends to maintain the lowest standard VAT rate in the EU also after the proposed increase. This would mean that the new standard rate will have to be somewhere between 16% and 18%. Find out more

US: Internet Sales Tax is coming?

It might well happen that in the not so far future all US online vendors with over $1 million in annual online revenue will be required to pay state and local taxes to the governments that their customers reside in. There are more than 9.600 different state and local tax jurisdictions within the US. This news makes issues related to the upcoming EU VAT 2015 ebiz changes look like a piece of cake.

A federal Marketplace Fairness Act was submitted to the US Congress in February 2013 and aims to substantially reform the taxation of the ecommerce industry in the US. PwC’s summary on the bill can be accessed here. For some more information on the taxation of internet transaction in the US we suggest you to read this report. Find out more

Malaysia: Guidelines on taxation of ecommerce

The Malaysian tax authority has recently issued guidelines on the taxation of electronic commerce in Malaysia. The document provides guidance on the tax treatment of e-commerce transactions, including scope of the tax liability, treatment of servers and websites in determining the location of the ecommerce income,  issues on withholding tax and double taxation and examples of the various business models with relevant explanations.

A new approach to the internet taxation

While Malaysia has not implement the VAT taxation (it applies sales tax) it has introduced a unique way to tax ebiz. This is effected by imposing a withholding tax (“WHT”) liability on the Malaysian recipients (both B2B and B2C) in relation to any royalty type payments made to non-Malaysian companies. Find out more

Netherlands: Reverse-charge for sale of certain IT hardware and mobile phone devices

From 1 April 2013, business involved in supplying large quantities of certain IT hardware and mobile devices (e.g. mobile phones, tablets, laptops, game consoles, integrated circuit devices…) in the Netherlands must no longer charge Dutch VAT on their invoices to other businesses.

From this date on, if the total value of any single local supply of these goods is EUR 10.000 or more, the “reverse-charge mechanism” will be applicable. This means that the purchaser has to self-account for VAT on the transaction in his own VAT return. If the business customer is entitled to full input VAT recovery, a simultaneous input VAT recovery can be made in the same VAT return, so that there is not VAT payment liability is attached to the transaction. Find out more

EU: Mini one stop shop 2015 – the basics

Today we will take a look at the basics of the new Mini One Stop Shop (“MOSS”) VAT registration scheme and compare the EU and non-EU MOSS schemes with their alternative – the “standard” local VAT registration in up to 28 EU countries.

As you are most probably aware companies selling telecom, broadcasting and eservices to B2C customers in the EU will have to charge VAT in the country of the customer and at that country’s VAT rate. This will mean 28 countries and 28 VAT rates (or 56 rates if ebooks and similar eservices will potentially become taxable at reduced VAT rate).

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South Africa plans to implement madatory VAT registration for foreign businesses selling digital products to SA clients

South African National Treasury has proposed that foreign businesses, which sell digital products to South African customers, be required to register for VAT purposes in South Africa.

The VAT implications of digital product sales, including books and music sold via the internet by suppliers who are neither resident nor established in South Africa, have caused uncertainties and resulted in VAT compliance risks for these foreign businesses.

For your convenience has therefore the National Treasury proposed in the 2013 Budget Review (which was released on 27 February 2013), that foreign businesses supplying ebooks, music and other digital goods and services in South Africa be required to register as VAT vendors.

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