US: Internet Sales Tax is coming?

It might well happen that in the not so far future all US online vendors with over $1 million in annual online revenue will be required to pay state and local taxes to the governments that their customers reside in. There are more than 9.600 different state and local tax jurisdictions within the US. This news makes issues related to the upcoming EU VAT 2015 ebiz changes look like a piece of cake.

A federal Marketplace Fairness Act was submitted to the US Congress in February 2013 and aims to substantially reform the taxation of the ecommerce industry in the US. PwC’s summary on the bill can be accessed here. For some more information on the taxation of internet transaction in the US we suggest you to read this report. Find out more

Malaysia: Guidelines on taxation of ecommerce

The Malaysian tax authority has recently issued guidelines on the taxation of electronic commerce in Malaysia. The document provides guidance on the tax treatment of e-commerce transactions, including scope of the tax liability, treatment of servers and websites in determining the location of the ecommerce income,  issues on withholding tax and double taxation and examples of the various business models with relevant explanations.

A new approach to the internet taxation

While Malaysia has not implement the VAT taxation (it applies sales tax) it has introduced a unique way to tax ebiz. This is effected by imposing a withholding tax (“WHT”) liability on the Malaysian recipients (both B2B and B2C) in relation to any royalty type payments made to non-Malaysian companies. Find out more

Netherlands: Reverse-charge for sale of certain IT hardware and mobile phone devices

From 1 April 2013, business involved in supplying large quantities of certain IT hardware and mobile devices (e.g. mobile phones, tablets, laptops, game consoles, integrated circuit devices…) in the Netherlands must no longer charge Dutch VAT on their invoices to other businesses.

From this date on, if the total value of any single local supply of these goods is EUR 10.000 or more, the “reverse-charge mechanism” will be applicable. This means that the purchaser has to self-account for VAT on the transaction in his own VAT return. If the business customer is entitled to full input VAT recovery, a simultaneous input VAT recovery can be made in the same VAT return, so that there is not VAT payment liability is attached to the transaction. Find out more

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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