Tag Archives: legislation

South Africa – Webcast on the planned indirect taxation of eservices – 25 March 2014, 16:00 – 17:00 CET

As previously reported here, South Africa intends to impose VAT on electronic / digital services (“eservices”) supplied by non-established businesses to recipients in South Africa with effect from 1 April 2014.

At PwC’s upcoming Webcast Gerard Soverall (Partner, PwC South Africa), specialized in e-commerce and cross-boarder Indirect Taxation will provide an update on the latest developments. This session is designed to inform the participants of the content of the regulations and to discuss the administrative and enforcement challenges that may arise.

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South Africa: Update on new VAT rules for eservice suppliers

In line with the new VAT legislation, set to take effect on 1 April 2014, electronic/digital services (“eservices”) supplied by a business outside South Africa to a recipient in South Africa will require the supplier to register for Value-Added Tax in South Africa.

The recipient is deemed to be located in South Africa if:

  • that recipient is a resident of South Africa or
  • where payment originates from a bank registered or authorized in terms of South African law.

It is important to realize that this definition applies supplies made both to B2B (Business – to – Business) and B2C (Business – to – Consumer).

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EU: Practical guidelines for businesses on new VAT rules for telecommunications, broadcasting and eservices

The EU Commission has published practical guidelines on the mini-one-stop-shop to prepare businesses for the new B2C VAT rules for telecoms, broadcasting and eservices, which will enter into force with 1 January 2015.

The aim is to help businesses to be fully prepared on time for the change-over, whereby VAT will be charged in the country where the customer is based.VAT will have to be collected by all providers of telecom, broadcasting and eservices, regardless whether they are established inside or outside of the EU. Find out more

USA: Missouri adopts affiliate and click-through nexus standards for sales and use tax

On July 5, 2013, Missouri enacted S.B. 23 which provides affiliate and click-through nexus standards for sales and use tax purposes.

Out-of-state vendors selling taxable products or services to Missouri customers should review whether activities of in-state affiliates or third parties create a sales and use tax registration and filing obligation with the state. This is relevant also for ecommerce vendors.

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South Africa: VAT registration of foreign ecommerce service suppliers as of 1 January 2014

As of 1 January 2o14 all non-South African suppliers of ecommerce services will be required to register as VAT vendors in South Africa and account for output VAT on its supplies to South African residents.

E-commerce services are defined in the South African VAT Act to include any supply of services where the placing of the order and delivery of the service is made electronically.

The VAT registration requirement for a non-resident supplier of ecommerce services is triggered by either the supply of such services to a South African resident recipients (either B2B or B2C) or where payment is affected from a South African registered bank.

The level of supplies made by the non-resident in South Africa is irrelevant, meaning that there is no minimal turnover threshold and the obligation to VAT register arises from the very first South African Rand generated with e-service to SA based clients.

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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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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

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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