Tag Archives: B2C

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’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

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

 

Australian GST changes from 1 July 2017

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.

Australia-gst-changes-13jun17

New Zealand – Update on proposed new GST implications for foreign B2C e-service providers as of 1 October 2016

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

Denmark – government enabled to request payment information from payment solutions providers

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.

Find out more

Russia – draft legislation on VAT on B2C supply of electronic services

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.

Find out more

New Zealand – Tax Bill proposes GST registration for foreign B2C e-service providers as of 1 October 2016

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:

  1. 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.
  2. 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.

Find out more

OECD – BEPS project – Final report on Action 1: Addressing the Tax Challenges of the Digital Economy

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.

Find out more

EU – Review of the content and format of the EU Commission’s Mini One Stop Shop (MOSS) web Portal – Have your say

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.