ECJ Decision (K Oy): VAT rate for non-printed books can only differ if they meet different needs for consumers

On 11 September 2014, the Court of Justice of the European Union (ECJ) gave its decision in K Oy regarding the question whether reduced rates for printed books should equally be applied to books published on another medium, or whether different VAT rates can be justified (case C-219/13 – click link) .

The Court has ruled that a selective application of the reduced VAT rates to printed books is not justified unless the printed books meet different needs for consumers as compared to books published on ‘other physical means of support’ (i.e. CD, DVD, USB stick).

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Czech virtual currency update

The new Czech virtual currency, Czech Crown Coin (officially named by the authors “CZC”) was for the first time offered to the public this week (Tuesday, 19th August) at noon, as part of a press conference held by its founders. The interest of the public in purchasing CZC was bigger than expected. The pre-mined amount released in the initial edition of 100,000 CZC was sold out within nine and half hours, whereby a third of this limited amount was sold already within the first hour! It is planned that within the next days, an additional set of 100,000 CZC will be offered to the public. After these ten days (on Friday, 29 August) an exchange platform will be opened on the official website of CZC.

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The first Czech virtual currency starts today!

Another virtual currency was “borne” today (17 July 2014) at noon. A Czech Crown Coin (the abbreviation used by the authors is “CZC”) as it is called, is established. The announced amount of coins is 100 million and the currency will be, similarly to other virtual currencies, mined. The mining website was opened at the same moment. Half of the total volume of CZCs has been already pre-mined, the other half should be mined within the next 4 to 10 years. The distribution of a limited number of free-of-charge coins to registered Czech citizens is announced to start in the first half of September 2014.
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EU 2015 VAT on digital supplies – EU Commission published additional guidelines on the audit & control under MOSS

On 13 June the EU Commission has published additional guidelines on the audit of the VAT Mini One Stop Shop scheme (MOSS).

The additional MOSS guidelines are available on the EU Commission’s website in English (Link). It will be translated in all EU languages, as well in Chinese and Japanese.

The guidelines include additional information for businesses signing up for the Mini One Stop Shop and notably on:

  • how to best contact businesses as part of an audit;
  • the method businesses should use to provide the information required by an audit.

These are recommendations only and not binding for the EU Member States.

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US Indirect Taxes – Current issues facing global sellers on 26 June 2014

PwC US’ State and Local Tax practice will have a webcast on Thursday, June 26th 2014 from 8:00 – 8.35 AM ET (14:00 – 14:35 CEST) focusing on the indirect tax considerations for foreign companies selling products or services into the United States. Among others, the webcast will include an overview of US sales and use taxes, and outline some of the key issues foreign sellers need to consider when making business in the US. The webcast will highlight recent efforts by the states to expand their jurisdictional reach as well as US federal legislative developments impacting remote seller requirements to collect US sales and use taxes.

Furthermore, PwC panelists will also provide insights related to the resale certificate process and indirect tax audit defense.

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USA – Michigan Court finds certain cloud computing services not subject to sales and use tax

The Michigan Court of Claims recently held in a summary disposition that remotely accessed software is not subject to Michigan sales and use tax. The court held that software accessed remotely was neither tangible personal property nor ‘used’ by the taxpayer as defined under Michigan statutes. Further, any prewritten computer software provided to the customer was only an incidental component of the various services purchased and did not subject the charges to tax. [Auto-Owners Insurance Company v. Department of Treasury, State of Michigan Court of Claims, No. 12-000082-MT (March 20, 2014)]

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South Africa – Follow-up Webcast on the planned indirect taxation of eservices – 23 April 2014, 15.30 – 16.15 CET

As previously reported here, the implementation of South African VAT on electronic services and associated obligation for non-resident businesses to register for VAT purposes in South Africa, has been delayed by 2 months and will be effective as of 1 June 2014.

PwC’s Indirect Tax Webcast series continues with a follow-up session of the latest developments in the South African legislation.

The presenter will be again Gerard Soverall, Tax Partner of PwC South Africa, who is specialised in e-commerce and cross-border indirect taxation.

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EU 2015 VAT Changes: EU Commission published Explanatory Notes on the new VAT rules

On 4 April, the European Commission has published Explanatory Notes to prepare businesses for the new VAT rules for telecom, broadcasting and electronic services, which will enter into force on 1 January 2015.

The aim is to help businesses to be fully prepared on time for the change-over, whereby VAT on telecom, broadcasting and electronic services will be charged where the customer is based, rather than where the seller is.

The Explanatory Notes are available on the EU Commission’s website in English (click link). (It will later be translated in all EU languages, as well as in Chinese and Japanese.)

We will discuss the key provisions and critical issues of the EU Commission’s Explanatory Notes with businesses, delegates of the Member States and the Commission during our next B2C 2015 Working Group meeting in Brussels, on 23 April 2014.

South Africa – New Electronic Services Tax postponed till June 1st – Materials and recording of PwC Webcast of 25 March 2014

Following our previous post, you can now access the recorded version of our Webcast on South Africa’s plans to apply 14% VAT on all electronic services, even those bought from foreign businesses.

On 28 March the South African National Treasury published its “Electronic Services Regulations” in the Government Gazette and released a media statement, announcing a postponement of the effective date till June 1st, 2014.

The changes will make it compulsory for foreign e-commerce suppliers of electronic books, music and other digital services to register for VAT in South Africa.

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