Tag Archives: VAT

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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USA: Webcast – EU 2015 B2C VAT changes and what they mean for US based businesses

Please join PwC’s Value Added Tax Practice for a webcast on Thursday, March 14th from 12:00 to 1:00pm ET.

Webcast will focus on the challenges that sellers of electronically delivered content face when selling to customers in the European Union and elsewhere.

The European Union (EU) has long required EU established businesses to account for VAT, at the rate where the business is established, on sales of electronically supplied services (eservices), such as mobile applications, downloadable or cloud accessible games and music, and subscriptions to websites, to private individuals located in the EU. Find out more

EU: How to define the location of an ebiz customer?

In today’s article we will take a look at information the EU Commission suggests that should be collected and used to determine the location of the customer – buyer of eservices. We will also analyze the practicability of the various proposed location evidences and think about how easy they are obtained in practice.

As you are probably aware, at least as of 2015 every business supplying eservices to non-VAT registered customers in the EU will have to charge VAT in the country where its customer is located. In a number of cases this rule already applies (e.g. if the eservices are supplied by non-EU companies to EU customers or if they are supplied to Swiss, Norwegian, etc… customers).

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Featured: EU 2015 B2C VAT changes – it’s sooner than you think!

On 1 January 2015 the final phase of the so-called VAT package will come into force and will involve important changes in the VAT treatment of intra-EU business-to-consumer (‘B2C’) supplies in relation to telecommunications, broadcasting and electronic services.

From that moment on, all telecommunications, broadcasting and electronic services provided to non-taxable persons will be taxable at the place where the customer is established, has his permanent address or usually resides. Affected businesses will therefore be required to charge, report and pay local VAT in every Member State in which they have customers, which may result in multiple VAT-registrations throughout the EU.

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EU Commission refers France and Luxembourg to the European Court of Justice over reduced VAT rates on ebooks

As reported, France and Luxembourg have started to apply reduced and super reduced VAT rates to ebooks without obtaining an approval from the rest of EU. This gave them competitive edge over the rest of the EU countries, as companies which were selling ebooks to their EU B2C customers from those two countries could sell them at the lowest available VAT rates (3% for sales from Luxembourg and 5% for sales from France). This (in words of Commissioner Šemeta, responsible for taxation) “runs counter to the fundamental EU principle of fair tax competition.”

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Netherlands: New Decree on the VAT treatment of phone cards and mobile phone contracts

On 6 February 2013, the Dutch State Secretary of Finance published a new Decree regarding the VAT treatment of the sale, distribution and use of phone cards and mobile phone contracts. The Decree entered into force on 7 February 2013, although businesses have until 1 July 2013 to adapt to some of the new rules. The Decree includes a number of substantive changes. Additionally, the Secretary of State provides a number of definitions.

The impact of the Decree is not limited to telecommunications businesses, but also affects agents / distributors and content providers. All these parties may have to change parts of their processes and systems. Find out more

Our ebiz Due Diligence experience: When VAT becomes a material issue

In this article we attempt to explain in a simplified way the impact VAT can have on determining the purchase price of an ebusiness company during a due diligence process. This should be of special interest for investors investing in ebusinesses and also for owners of a start-up when planning to gain additional capital or when playing with the idea of selling their companies some time in the future.

We have explained in previous posts that as of 1.1.2015 all ebusinesses providing eservices to non-VAT registered customers in the EU will have to charge VAT at the rate applicable in the EU country the customer resides in. Find out more

EU: 2015 VAT changes to eservices – the “keep it simple” edition

First and the most important fact: These rules are mandatory for any kind of ebusiness, no matter where it is established or has a nexus: in EU, US, China, India, Australia, Switzerland. As soon as a company provides eservices to a non VAT registered EU customer (regardless whether the customer is a legal or a natural person) it is bound by these rules, regardless whether it has a “physical” presence, server or agent in the EU. The customer’s location is the only thing that matters.

We have already presented some of the upcoming VAT changes to eservices (and also telecom and broadcasting services) previously. Find out more