Following the recent National Budget speech in South Africa, various proposals were tabled for consideration including a proposed amendment to the Electronic Services Regulation No. 37489, dated 28 March 2014.
Albania joined the group of countries which require non-established e-service providers to register for VAT for supplies made to private individuals.
Effective from 1 January 2015 the Albanian VAT legislation deems the place of supply of “telecommunication, transmission and electronic services” to non-taxable persons to be where the non-taxable person receiving the service is “placed, has a permanent address or resides usually”, regardless of the place where the supplier is established.
The Tax Authority of Buenos Aires (AGIP) has established a new turnover-based (i.e., provincial sales tax) withholding tax system for foreign suppliers of e-services to Argentinian private consumers located in Buenos Aires (B2C supplies).
According to initial provisions of the new regime, effective February 1, 2015, withholding agents (Argentine credit card companies) that collect payments for such services should withhold 3% turnover tax from the payments made by final consumers to the non-resident service providers. Credit card companies have, however, formally asked the AGIP for additional time to make the necessary amendments to their systems, enabling them to identify whether the payments relate to taxable services to be used in Buenos Aires. As a result, the AGIP has postponed the enactment of the new regime until withholding agents can adequately modify their systems to be able to collect the tax.
The Swiss Federal Council has published its commentary to the partial revision of the VAT Law. If the draft legislation is approved by the Swiss parliament, the changes will come into effect on 1.1.2016. Among other changes we set out below those which are most relevant for ebiz & e-commerce.
In Iceland the reduced VAT rate applicable to e-books and electronically published music increased from 7% to 11% as of 1 January 2015. Therefore, it must be ensured that you account for VAT on such sales at the appropriate rates. You can access further information of the overall Icelandic tax rules in 2015 here.
Japan’s current JCT regime was established in 1989 – before the rise of the digital economy. Accordingly, the taxation of B2C supply of eservices by non-established companies to Japanese customers was not considered and currently these are not subject to JCT.
This provides an unfair advantage to non-established eservice providers compared to Japanese businesses in this field, which has become more apparent since the JCT rate increased form 5% to 8%, with another increase to 10% estimated from 1 October 2015.
On 1 October 2014 the pre-registration period in which EU and foreign suppliers alike can register for the Mini One Stop Shop regime has started. This pre-registration can be made on the website of the tax authority of the EU Member State that is chosen by ebusinesese for MOSS registration.
For non-EU suppliers, this could be practically any country in the EU. For EU entities, the country of establishment will be the country of MOSS registration.
The websites of tax authorities from several countries are already up and running, however there are still EU countries, where the online registration is still not possible.
Any registrations made in the pre-registration period, will be effective from 1 January 2015.
As previously reported here, the implementation of South African VAT on electronic services and associated obligation for non-resident businesses to register for VAT purposes in South Africa, has been delayed by 2 months and will be effective as of 1 June 2014.
PwC’s Indirect Tax Webcast series continues with a follow-up session of the latest developments in the South African legislation.
The presenter will be again Gerard Soverall, Tax Partner of PwC South Africa, who is specialised in e-commerce and cross-border indirect taxation.
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.