This publication prepared by PwC US takes the US view on the VAT treatment of eservices supplied through the Cloud (electronically) in Europe and takes a look at the global trends in the VAT treatment of cross-border eservices delivered via the cloud.
Value Added Tax (VAT), including Goods and Services Tax (GST), and similar consumption tax systems have been implemented in more than 150 countries around the world, with seven more countries considering implementation by 2013. VAT is a transaction based tax which applies to nearly all transactions where either the purchaser or the seller is located in a VAT jurisdiction.
Whether the seller has any physical presence in a country is often not determinative of whether it has any VAT obligations in the country.
- How does VAT work?
- How does VAT apply to cloud computing?
- Global trends in the VAT treatment of cross-border services delivered via the cloud
- General rules in the European Union (EU)
- Update on Croatia and the five EU candidate countries, and current VAT obligations in these countries
- Update on VAT regimes in Norway, Switzerland, and other countries
Providers of services delivered via the Cloud to seek professional VAT advice based on its particular circumstances before it enters a new market. Not doing so could have a significant impact on a seller’s profit margin where it is later discovered that VAT should have applied and thus lead to hefty penalties and interest charges for non-compliance.