On September 18, 2014, President Obama signed House Joint Resolution 124, which includes provisions extending the Internet Tax Freedom Act (ITFA) through December 11. The Act was previously scheduled to expire November 1, 2014, and the extension gives Congress a chance to consider the ITFA’s long-term future during the lame-duck session after the midterm elections.
On 1 October 2014 the pre-registration period in which EU and foreign suppliers alike can register for the Mini One Stop Shop regime has started. This pre-registration can be made on the website of the tax authority of the EU Member State that is chosen by ebusinesese for MOSS registration.
For non-EU suppliers, this could be practically any country in the EU. For EU entities, the country of establishment will be the country of MOSS registration.
The websites of tax authorities from several countries are already up and running, however there are still EU countries, where the online registration is still not possible.
Any registrations made in the pre-registration period, will be effective from 1 January 2015.
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).
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.
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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The Advocate General (AG) released her opinion in the interesting VAT case dealing with the situation whether a foreign company can be regarded as having a fixed establishment in the supplier’s Member State by using the supplier’s infrastructure.
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.
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.
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)]
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.