With effect from 1 January 2019, a new rule has been introduced in Germany to make the operator of an online marketplace jointy liable for German VAT no accounted for by the online traders on goods sold via the marketplace.
For further details please see the newsflash from PwC Germany:
The e-Commerce VAT package of the EU introduces simplification measures for intra-EU sales of electronic services from 2019 onwards, and also extends by 2021 the Mini One-Stop Shop to a One Stop Shop. Furthermore, new rules for electronic interfaces such as marketplaces or platforms will be introduced, which deem them for VAT purposes (in certain scenarios) to be the supplier of goods sold to customers in the EU and make them collect and pay the VAT on these sales.
Detailed implementation rules have been published în December on:
- the extension of the scope of the Mini One Stop Shop (MOSS) to all types of services as well as to intra-community distance sales of goods and distance sales of imported goods from third countries – turning the MOSS into a One Stop Shop; and
- the introduction of special provisions applicable to operators of electronic marketplaces, platform, portal or similar means with the effect that the these persons may be deemed to have received and supplied the goods itself applying from 1 January 2021.
The Proposal is available via this LINK and contains more detailed explanations of the following specific provisions.
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The European Parliament has backed, by 590 votes to 8 with 10 abstentions, the EU Commission’s proposal to bring the VAT treatment of electronic publications into line with those publications to which the Member States can apply a reduced rate. The proposal now requires unanimous approval by the EU Council.
You can find further Information on the vote in the attached proposal (see below link) and on the European Parliament’s Website.
Reduced rate on e-books
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.
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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.
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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.
We reported in our initial post on the South Korean VAT rule changes regarding the supply of electronic services by non-established service providers (effective from 1 July 2015), that the legislation subjected both B2B and B2C supplies to VAT under the new rules. There has been controversy whether the legislation really intended to apply the same treatment to B2B supplies, as to B2C.
The recently submitted Korean tax reform proposal for 2015 brings clarity in this regard by inserting a provision that B2B supplies of electronic services (as defined) will not be subject to the new VAT rules and they remain taxable by Korean business customers under the reverse charge mechanism.
For further details on the above and other proposed tax changes please refer to PwC Korea’s newsletter. Alternatively, please contact Changho Jo of PwC Korea or me.
As previously reported here and here the amended South Korean VAT law for the supply of e-services from overseas has been effective since 1 July 2015. Accordingly, overseas service providers shall apply for the simplified business registration by 20 July 2015.
The Korean National Tax Service (“NTS”) recently issued a notification indicating that the website for the application of simplified business registration is still under construction. The website is expected to go-live on 10 July 2015. If a taxpayer would like to apply for the registration earlier than that, it is possible to complete a registration form and submit it via email to the NTS.
For further information please contact Changho Jo of PwC Korea or me.
The EU Commission recently updated its Taxation and Customs Union website, which now offers a way better overview. At first sight it also seems that you need to spend less time on researching the website for what you are looking for and it provides easier access to information. You can check the VAT section here, including a good repository of all documents relating to the B2C 2015 changes.
The Israeli Tax Authorities (ITA) issued draft guidelines titled “Activities of Foreign Companies through the Internet” (hereafter the “Draft Circular”) for comments.
The purpose of the Draft Circular is twofold:
- To elaborate on when service income is generated by a foreign entity; in cases where the internet serves as a key tool for generating such service income, income would be regarded as generated by a permanent establishment (PE) of such an entity in Israel.
- To determine, if, and under what circumstances, a foreign entity, which provides services to Israeli customers through the internet, should register for Israeli VAT purposes.
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