A quick update from Thailand

This article has recently caught my eyes (it is from Bangkok Post):

Satit Rungkasiri, the director-general of the Revenue Department, said he was reluctant to impose harsh measures on the mostly young entrepreneurs who operate e-commerce sites. Authorities in fact want to encourage the growth of e-commerce as trade barriers fall with the launch of the ASEAN Economic Community in 2015. Mr Satit said: Find out more

New B2C 2015 EU VAT rules for eservices

In 2015 all European countries will charge VAT on all eservices provided to their residents no matter where the eservice provider will be located (i.e. in Europe, America, Asia or elsewhere). This will be the result of the new B2C VAT rules and the technology which will enable to enforce these new rules. The VAT taxation will lead to increased sales prices of digital products (by as much as 27%) and/or decreased the profit margin for the e-businesses. In addition compliance and admin costs will increase as a result of increased tax compliance and reporting procedures. All this will directly impact the profit line. Alternative is even worse – e-businesses not willing to register and charge VAT will be shut out of the European market.
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EU: What is the correct VAT rate for e-books?

The Luxembourg VAT Authorities have issued a Circular stating that no distinction should be made between books on physical and electronic means, meaning that the super-reduced 3% rate already applicable to books should also apply to e-books. The Circular is effective as of 1.1.2012 (read more). It seems to us that Luxembourg has adopted this position as a response to France’s recent decision to adopt the reduced rate of 7% for e-books published by companies based in France (read more), even though Luxembourg officials claim that it is based on the content of the “Green paper” on future of the EU VAT system, which is actually aiming to plot the  future of the EU VAT system (and not current VAT legislation).
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EU: Advocate General supportive of taxpayer in the Lebara ECJ case

The Advocate General has given his opinion in the UK case of Lebara Ltd (C-520/10) at European Court of Justice (ECJ) concerning the supply of phone cards to distributors in other EU-States, which end users belonging in that same EU-State can redeem in return for receiving telecoms services (previously reported here). In summary, the Advocate General has suggested that the distributor, and not the card issuer (in this case Lebara) should be liable for the VAT due on the supply of telecoms services to end users. The reasons for this are that the distributor is either acting as an undisclosed agent of the card issuer or, in the alternative, because the card issuer makes a single supply of telecoms services to the distributor and the distributor in turn makes a supply to the end user.
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EU: Internet sellers are jointly liable for import duties

The European Court of Justice (ECJ) has recently passed a decision in a Case C‑454/10 Oliver Jestel regarding the question of who is liable for the payment of customs duties when goods are imported into the EU. The case involved an Online shop within the EU, where the shop owner was acting as an intermediary between the fraudulent seller and the customers. ECJ has essentially deemed that the shop owner is co-liable for the payment of the costumes duties and import VAT, which should have been paid (but were not) be the foreign seller, as the shop owner should have been aware that the seller is selling goods illegally imported into the EU.
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France: Proposed increase of the reduced VAT rate to 7%

The French Prime Minister announced recently that from 1 January 2012 the reduced VAT rate for “standard reduced articles” is expected to be increased from 5.5% to 7% (subject to Parliamentary approval). This change will affect among others also the sales of all e-books in France; as we have reported previously France intends to sell the e-books at reduce rate as of 1 January 2012.
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EU: ECJ hears phone cards case Lebara (C-520/10)

In its submission to the hearing, the European Commission adopted the approach favored by Lebara Ltd, suggesting that in such circumstances the supply by the TelCo (i.e. the card issuer) is liable to reverse charge VAT in the distributor’s country, and that the onward supply by the distributor to the end user is subject to local VAT in the Member State where the distributor is established. Find out more

EU: VAT treatment of digital newspapers vs. their paper version

The European Parliament has in September 2011 published answers to questions of the European Parliament concerning the VAT rate of on-line newspapers and magazines. They have addressed the issue that the digital version of newspapers and magazines is taxed at the higher VAT rate then their paper version although the content is more or less the same.  This is one of the items which should be further discussed and addressed in the intended reform of the EU VAT system.
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