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.
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.
We are pleased to update you on some recent EU VAT developments that we believe are very relevant for all e-commerce and digital businesses in the context of the B2C 2015 VAT changes and their implementation projects.
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The EU Commission has published practical guidelines on the mini-one-stop-shop to prepare businesses for the new B2C VAT rules for telecoms, broadcasting and eservices, which will enter into force with 1 January 2015.
The aim is to help businesses to be fully prepared on time for the change-over, whereby VAT will be charged in the country where the customer is based.VAT will have to be collected by all providers of telecom, broadcasting and eservices, regardless whether they are established inside or outside of the EU. Find out more
Do you sell services to consumers? Are they electronically supplied? Are your customers in the EU? Are you ready for the B2C 2015 VAT changes?
There are significant changes on the horizon for the VAT paid on electronically supplied services. Any business headquartered in any country selling broadcasting, telecommunications and electronically supplied services to EU retail customers will be affected by these changes. This includes businesses in the US, China and Australia.
The new legislation is effective from 1 January 2015. It will have the effect of changing the place of supply, and the country of taxation, of business to consumer (B2C) telecoms, broadcasting and ‘electronically supplied services’ from the country in which the supplier is established to the country in which the consumer is resident. One effect of this is that, rather than applying a single VAT rate in its country of establishment, affected businesses may be required to apply the local VAT rate in 27 different member states.
As reported there is new draft VAT legislation in South Africa, which is planned to be implemented in early 2014, which targets electronically supplied services provided by foreign (non-established) business to customers located in South Africa.
Whilst most of us are familiar with the rules and administrative practices which operate within the EU and Switzerland/Norway regarding the supply of such services by non-established businesses to private customers (B2C), it is important to recognize that South African VAT legislation does not currently distinguish as between B2B supplies and B2C supplies and refers generically to “imported services”. Thus whilst the intended “target” may well be the B2C sector it appears that the B2B sector may be equally impacted due to the absence of the distinction referred to above.
Date: Thursday, 5 September 2013
Timing: 9.30 – 16.30 CET
Location: Brussels (address)
With the 2015 VAT Implementing Regulation now being adopted, which rounded the EU legislative framework, businesses that will be affected by the changes in legislation should now have a clearer picture of their 2015 footprint and the critical issues they need to address in the run-up to 2015.
As an update to our previous webcasts on the 2015 EU VAT changes to electronically supplied services, we are pleased to inform you that we organize a follow-up webcast on August 22, 2013 at 12:00PM (EDT) to address the agreement reached by the EU Ecofin Council on June 21, 2013.
The council agreed upon the VAT Implementing Regulation addressing the new treatment for sales of electronically supplied services (e-services) by EU established sellers to EU private individuals effective January 1, 2015. The new rules will require an EU established seller to account for VAT for such sales at the rates where the EU private individuals are located rather than the EU established seller’s location as, historically, it has been done. The list of services considered e-services is broad and includes mobile applications, downloadable or cloud accessible games and music, and online subscription services.
We are pleased to present our new 2015 module on GlobalVATOnline (GVO), which has been launched ahead of the EU VAT change on 1 January 2015 when B2C supplies of telecommunications, broadcasting and electronic services made by EU based companies will change from being taxed where the supplier belongs to being taxed according to the VAT rates applicable where the customer is located or is normally resident.
We are happy to announce that the EU Ecofin Council reached political agreement on the proposal for VAT implementing Regulation on B2C 2015 place of supply issues, in a meeting in Luxembourg last Friday 21 June.
It will apply as from 1 January 2015. It will be officially released in the next weeks after clean up and translation to the EU official languages.
Important to note is that this Implementing Regulation has direct effect and does not need to be implemented/transposed by the EU Member States in their national VAT legislation (primary, secondary or administrative guidance).