1 July 2017, supplies of things other than goods or real property made to an ‘Australian consumer’ will be connected with Australia and subject to GST. The Australian provisions are broader than some other jurisdictions and essentially anything other than goods or real property are caught, and if an entity’s GST turnover exceeds the registration turnover threshold of AUD 75,000, it would be required to register for GST in Australia. Non-resident suppliers will be able to access a limited and simplified GST registration, although they can also register under the full registration procedure.
Where supplies of inbound intangibles are made through an Electronic Distribution Platform (EDP), the GST liability on these supplies would shift to the operator of the EDP (i.e. generally, online marketplaces that act as intermediaries). The Australian Taxation Office (ATO) has released a draft Law Companion Guideline (LCG 2017/D4) dealing with the EDP provisions.
In addition, under proposals still before Parliament (the Treasury Laws Amendment (Goods and Services Tax (GST) Low Value Goods) Bill 2017), low-value goods (AUD 1,000 and under) supplied by overseas retailers to Australian consumers would become taxable supplies beginning 1 July 2017. The Bill was referred to the Senate Economics Legislation Committee which recommended that the implementation of the measures be delayed to 1 July 2018. The Bill is listed to be debated in Parliament in June 2017.
Please see the attached newsletter for further details.
On 9 November 2016, India`s Central Board of Excise and Customs (CBEC) announced the new arrival of the service tax on cross-border business-to-consumer (B2C) services via cross-border e-commerce transaction.
The new digital tax regime came into effect on 1 December 2016, whilst foreign companies are yet to be effected by the service tax rules for digital content, their Indian counterparts have incurred a 15% charge.
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In accordance with our posts (here and here) on the new GST rules proposed to be effective form 1 October 2016 we would like to update you that PwC New Zealand has recently been advised by New Zealand Inland Revenue Policy that the standard legislative process will not be followed and the passage of the law will be accelerated.
As next step it is expected that the proposed draft legislation will be passed by the New Zealand Parliament under urgency in April 2016. We do not expect major changes to the draft law so businesses can already start / continue with their preparation for the new rules now. For convenience, please see below updated timeline until the go live date of 1 October 2016. Find out more
The Danish Government has widen the Tax Authorities’ information collection powers, by enabling it to be able to request payment information in connection with foreign suppliers who supply goods via distance selling, on-line e-commerce or supply electronic services to private individuals in Denmark. The law was accepted by parliament the 21 December 2015 and is in force as of 1 January 2016.
The intention behind the law is to protect the Danish VAT revenue and to ensure that Danish companies are able to compete on pricing with their foreign counterparts and to minimise VAT leakage.
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Russia can be the next in line to join the countries that impose VAT on the B2C supply of electronic services by non-established service providers. A draft legislation that would require foreign companies to start charging VAT on internet / digital services provided to individuals is currently being considered by the Russian State Duma.
According to the draft law, digital services provided by foreign companies to Russian individuals should be regarded as subject to Russian VAT even if currently such companies are not tax registered in Russia.
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Further to our previous post the New Zealand Government submitted its legislative proposal in relation to the GST law reform on offshore online purchases of services.
The Government has followed the modern VAT/GST practices and OECD recommendations and has decided to reform the GST system. The reforms focus on two main areas:
- Digital products and cross border services, in respect of which draft legislation proposes imposing GST on digital products and other services purchased by New Zealand private consumers from offshore sellers. The new rules will apply from 1 October 2016.
- Low value imported goods, where a consultation paper is being worked on regarding the options to impose of GST and duties on low value imported goods. PwC New Zealand expects the document to be released in April 2016.
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The Court of Justice of the European Union delivered its judgment earlier today in the long-awaited case on whether Bitcoin exchange services are considered to be VAT exempt services. The Court followed the earlier opinion of the Advocate General and confirmed that the exchange of Bitcoins into conventional currencies and vice versa in return for a exchange commission falls within the VAT exemption for transactions concerning currency, bank notes and coins used as legal tender provided by the European VAT Directive.
This judgment was made on the grounds that Bitcoin (as a virtual) currency has no other purpose than to be a means of payment and that it is accepted for that purpose by certain operations.
You can access the judgement here.
The OECD’s Base Erosion and Profit Shifting (BEPS) project started in 2013 amid growing concern of tax planning used by multinational enterprises (MNEs) to artificially reduce taxable income / shift profits to low tax countries by benefitting from discrepancies between country specific tax rules.
OECD members and G20 countries defined an Action Plan of 15 items to address the key taxation challenges of today’s global economy. After two years of intensive work and consultation with different stakeholders all actions are now completed.
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Data and big data have been a hot topic for a while. The increased spread of the Internet in the past decades generated a wealth of data, which can be of tremendous value and it is essentially a new asset class for businesses, if utilized properly.
Data-savvy businesses are using data analytics to increase the speed and quality of their decision making process.
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As part of the current efforts to support the smooth implementation of the 2015 Place of Supply rules (Council Directive 2008/8/EC) and the functioning of the MOSS portal, the Commission is looking for inputs and suggestions to improve the quality of the information presented on the MOSS web Portal.
The quote is from the EU Commission’s survey site where you can submit your comments by Friday, 30 October 2015. The participation in the survey should not take longer than 15 minutes.