Singapore – GST on Imported Digital Services—What is Your Game Plan?

 

Globally, the rapid growth of e-commerce in recent years has left tax administrators worldwide scrambling to find and implement mechanisms to secure a piece of the (untouched) digital tax pie.

Consumers are spending an ever-increasing amount on “digital services” such as games, streaming services and online news subscriptions and this is largely driven by the ubiquity of the smartphone and the vast array of mobile applications, which have changed forever the way which businesses reach out to and deliver services to their customers. The Internet of Things has also resulted in businesses gravitating towards “Product-as-a-Service” business models where the outcome of using the product is sold rather than the product itself.

New Zealand – Import of low value goods / Key decision points

The New Zealand Government has finally announced the start date for GST (at 15%) on low value imported goods to be 1 December 2019. The low value goods threshold is NZD 1,000 and the annual GST registration threshold is NZD 60,000. The law is likely to be passed in July and this does not give impacted sellers and platforms a lot of time to prepare. PwC NZ ITX practice has prepared the attached 2-page summary of key decision points. Inland Revenue will release more detailed guidance in July.

Key decision points

Contact: Eugen Trombitas (PwC NZ) at eugen.x.trombitas@pwc.com

German Federal Ministry decrees on joint VAT liability for onliny marketplaces

With effect from 1 January 2019, a new rule has been introduced in Germany to make the operator of an online marketplace jointy liable for German VAT no accounted for by the online traders on goods sold via the marketplace.

For further details please see the newsflash from PwC Germany:

https://blogs.pwc.de/steuern-und-recht/files/2019/03/VAT-Newsflash-02-2019.pdf

VAT-Newsflash-02-2019

 

 

 

New Zealand’s New GST Collection Model for Low Value Imported Goods

The latest New Zealand low value imported goods changes are another of many occurring globally in the e-commerce indirect taxes area. On December 5, 2018 the New Zealand government introduced into Parliament the Taxation Bill that is a landmark development proposing new rules that will require offshore sellers, from October 1, 2019, to register and account for Goods and Services Tax (‘‘GST’’) at 15 percent on supplies of low value imported goods (‘‘LVIGs’’) if sales to New Zealand private consumers in a 12-month period exceed NZ$60,000 ($41,380). The $60,000 threshold is the same GST registration threshold that applies to domestic businesses and offshore suppliers of cross-border remote services.

For detailed information please see the below link or the attached article from Eugen Trombitas, PwC NZ Partner and PwC Global E-commerce indirect taxes leader, published in Bloomberg International Tax News.

https://www.bna.com/insight-new-zealands-n57982094757/

NZ GST article

Latest EU proposals concerning e-commerce

The e-Commerce VAT package of the EU introduces simplification measures for intra-EU sales of electronic services from 2019 onwards, and also extends by 2021 the Mini One-Stop Shop to a One Stop Shop. Furthermore, new rules for electronic interfaces such as marketplaces or platforms will be introduced, which deem them for VAT purposes (in certain scenarios) to be the supplier of goods sold to customers in the EU and make them collect and pay the VAT on these sales.

Detailed implementation rules have been published în December on:

  • the extension of the scope of the Mini One Stop Shop (MOSS) to all types of services as well as to intra-community distance sales of goods and distance sales of imported goods from third countries – turning the MOSS into a One Stop Shop; and
  • the introduction of special provisions applicable to operators of electronic marketplaces, platform, portal or similar means with the effect that the these persons may be deemed to have received and supplied the goods itself applying from 1 January 2021.

The Proposal is available via this LINK and contains more detailed explanations of the following specific provisions.

Find out more

South Africa – Revised e-business regulations will become effective from April 2019

Changes are expected from April 2019 concerning the taxation of electronic services in South Africa. All non-resident suppliers of e-services (if not specifically excluded from the revised regulations) will have a potential VAT registration liability in South Africa if the total value of their supplies exceeds R1 million (approx. 70’000 USD) in any twelve-month period.

For further details, please see the tax alert from PwC South Africa:

https://www.pwc.co.za/en/assets/pdf/taxalert/tax-alert-vat-treatment-of-supply-of-electronic-services.pdf

 

Australia – Framework questions for a possible digital tax

The   Australian Treasury released its digital economy tax discussion paper:
Comments are due 30 November 2018. The key substantive sections seem to be located in the Appendix, which sets out some of the items being considered in terms of potential unilateral “interim” measures pending broader OECD alignment – both digital advertising and online marketplace operators are mentioned as potential target taxpayers/services and a digital services tax or some similar type of tax on revenue is certainly being considered closely. 
Please see further details in PwC Australia’s information leaflet:

New Zealand – Low value goods – NZ’s new GST dimension in the global economy

A significant GST matter reflecting brave new policy globally

The NZ Government announced last week that it is seeking consultation on the best way to collect GST on online purchases, by private NZ consumers, of imported low value goods (LVGs) under NZ$400 (approx. USD 280). If enacted, the new rules will apply from 1 October 2019.

This is a significant issue which has been discussed by the OECD, governments and regulators around the world. If enacted as currently proposed, the new LVG rules will be broadly consistent with the introduction of NZ’s remote services rules (implemented in October 2016).

Find out more

Canada – New QST registration rules for digital supplies by non-resident suppliers

The March 27, 2018 Québec budget proposes to expand the mandatory Québec Sales Tax (QST) registration rules for non-residents of Québec making digital supplies to Québec recipients. Specifically, registration will be required for: 

  • non-residents of Canada that make supplies of incorporeal moveable property (IPP) and services to specified Québec consumers
  • residents of Canada that reside outside Québec and make supplies of corporeal moveable property, IPP and services to specified Québec consumers.

For further Information, please see the attached Newsletter.

pwc-2018-quebec-budget-new-qst-registration-rules-digital-supplies-non-resident-suppliers-2018-04-en