The first Czech virtual currency starts today!

Another virtual currency was “borne” today (17 July 2014) at noon. A Czech Crown Coin (the abbreviation used by the authors is “CZC”) as it is called, is established. The announced amount of coins is 100 million and the currency will be, similarly to other virtual currencies, mined. The mining website was opened at the same moment. Half of the total volume of CZCs has been already pre-mined, the other half should be mined within the next 4 to 10 years. The distribution of a limited number of free-of-charge coins to registered Czech citizens is announced to start in the first half of September 2014.
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EU 2015 VAT on digital supplies – EU Commission published additional guidelines on the audit & control under MOSS

On 13 June the EU Commission has published additional guidelines on the audit of the VAT Mini One Stop Shop scheme (MOSS).

The additional MOSS guidelines are available on the EU Commission’s website in English (Link). It will be translated in all EU languages, as well in Chinese and Japanese.

The guidelines include additional information for businesses signing up for the Mini One Stop Shop and notably on:

  • how to best contact businesses as part of an audit;
  • the method businesses should use to provide the information required by an audit.

These are recommendations only and not binding for the EU Member States.

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USA – Michigan Court finds certain cloud computing services not subject to sales and use tax

The Michigan Court of Claims recently held in a summary disposition that remotely accessed software is not subject to Michigan sales and use tax. The court held that software accessed remotely was neither tangible personal property nor ‘used’ by the taxpayer as defined under Michigan statutes. Further, any prewritten computer software provided to the customer was only an incidental component of the various services purchased and did not subject the charges to tax. [Auto-Owners Insurance Company v. Department of Treasury, State of Michigan Court of Claims, No. 12-000082-MT (March 20, 2014)]

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EU 2015 VAT Changes: EU Commission published Explanatory Notes on the new VAT rules

On 4 April, the European Commission has published Explanatory Notes to prepare businesses for the new VAT rules for telecom, broadcasting and electronic services, which will enter into force on 1 January 2015.

The aim is to help businesses to be fully prepared on time for the change-over, whereby VAT on telecom, broadcasting and electronic services will be charged where the customer is based, rather than where the seller is.

The Explanatory Notes are available on the EU Commission’s website in English (click link). (It will later be translated in all EU languages, as well as in Chinese and Japanese.)

We will discuss the key provisions and critical issues of the EU Commission’s Explanatory Notes with businesses, delegates of the Member States and the Commission during our next B2C 2015 Working Group meeting in Brussels, on 23 April 2014.

South Africa – New Electronic Services Tax postponed till June 1st – Materials and recording of PwC Webcast of 25 March 2014

Following our previous post, you can now access the recorded version of our Webcast on South Africa’s plans to apply 14% VAT on all electronic services, even those bought from foreign businesses.

On 28 March the South African National Treasury published its “Electronic Services Regulations” in the Government Gazette and released a media statement, announcing a postponement of the effective date till June 1st, 2014.

The changes will make it compulsory for foreign e-commerce suppliers of electronic books, music and other digital services to register for VAT in South Africa.

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Canada: Public Consultation on taxation of digital imports

Canada joins those countries that make efforts to tax supplies provided by non-established businesses via the Internet to Canadian residents. As recently reported in PwC’s GlobalVATOnline the Canadian government launched a public consultation as part of a 2014 Budget proposal to ensure tax fairness and invites the public to give their opinion on what actions should be taken in order to effectively collect sales taxes on e-commerce sales to residents of Canada by foreign-based vendors.

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South Africa – Webcast on the planned indirect taxation of eservices – 25 March 2014, 16:00 – 17:00 CET

As previously reported here, South Africa intends to impose VAT on electronic / digital services (“eservices”) supplied by non-established businesses to recipients in South Africa with effect from 1 April 2014.

At PwC’s upcoming Webcast Gerard Soverall (Partner, PwC South Africa), specialized in e-commerce and cross-boarder Indirect Taxation will provide an update on the latest developments. This session is designed to inform the participants of the content of the regulations and to discuss the administrative and enforcement challenges that may arise.

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Featured article: Taxation of B2C Telecom Broadcasting and Electronic Services under EU VAT from 2015

On 21 June 2013, the European Council reached political agreement on implementing rules for taxing B2C telecommunications, broadcasting and electronically supplied services from 1 January 2015.

In this article, Sophie Claessens and Ine Lejeune give an overview of the new implementing provisions and what additional guidance can be expected from the Explanatory Notes that are currently being drafted by the European Commission.

Publisher/Publication: IBFD, International VAT Monitor, 2014 (Volume 25), No. 1; first published online on 16 January 2014.