The Digital Economy is changing the landscape of international taxation and countries around the world are trying keep up with the new challenges. An increasing number of countries are taxing VAT or GST on digital services supplied from abroad to consumers. Global VAT Compliance is up-to-date with all of these new regulations and provides VAT/GST solutions to several Digital Companies.
VAT & GST on Digital Services
An increasing number of countries are taxing VAT or GST on electronic services supplied from abroad to consumers. As of 2015 the EU applied the Mini One Stop Shop which enables traders to register in one country and report and remit VAT for the entire EU. Global VAT Compliance files EU VAT MOSS returns in various jurisdictions throughout the EU.
Also, countries outside the EU have implemented a mechanism to charge VAT, GST or similar transaction taxes on supplies made from other countries to private individuals.
Streaming Media has changed the way media services are being delivered to customers. From brick and mortar stores with physical products to digital streaming of content being broadcasted directly to homes and personal devices worldwide, supply and transaction chains are more difficult to track, making the VAT process hard to follow and stay compliant.
The Video Game industry is evolving rapidly, and the digital distribution of video games and Gaming as Digital Services are becoming the norm. New supply and transaction chains are making hard to apply the correct VAT treatment which might lead to inaccurate VAT calculations and allocations. GVC makes sure to correctly apply VAT on Video Games so you are fully VAT compliant.
The software industry is expanding at an astonishing rate and the digital distribution of applications and software is increasing. With many ways of monetizing, the transaction chain is making hard to apply the correct VAT treatment which might lead to inaccurate VAT calculations and allocations.
The digital world and ePublishing have changed the way publications are being produced and distributed. Governments around the world are now shifting the way they treat eBooks and other digital publications and VAT rules for the ePublishing media are changing rapidly.
DIGITAL SERVICE TAX NEWS
GLOBAL VAT TABLE DIGITAL SERVICES
Below you will find the VAT rates and thresholds for foreign providers of digital services in different countries.
Global VAT Compliance can help you comply with all these jurisdictions.
We update this regularly but please check with us to ensure this is correct at the date you are using it.
|Country||Standard VAT/GST rate||Levy eServices from||Type of VAT registration||Threshold|
|Albania||20%||January 1, 2015||Standard VAT registration and fiscal representative||None|
|Argentina||21%||February 1, 2018||The Argentine approach to assigning liability for the collection and remittance of VAT in this new rule is interesting. The place of supply rules are in place but the liability is not on the non-resident supplier. The liability for the collection and remittance of VAT, in practice, falls on the Argentinian customer’s payment provider.||None|
|Australia||10%||July 1, 2017||GST on eServices||AU$ 75,000|
|Bahrain||5%||January 1, 2019||VAT on eServices||None|
|Bangladesh||15%||July 1, 2018||VAT on eServices||None|
|Belarus||20%||January 1, 2018||VAT on eServices||None|
|Colombia||19%||July 1, 2018||VAT on eServices|
|Costa Rica||13%||July1, 2019||VAT on digital services|
|Egypt||14%||September 8, 2016||VAT on eServices|
|European Union||Various||July 1, 2003||MOSS|
|Ghana||15%||January 1, 2016||VAT on digital services||GHS 120,000|
|Iceland||24%||November 1, 2011||Standard VAT registration||1 million ISK|
|India||18%||July 1, 2017||GST on OIDAR Servoces||None|
|Japan||10%||October 1, 2015||Standard VAT registration (B2B & B2C)||JPY 10 million|
|Malaysia||6%||January 1, 2020||Service Tax on Imported Digital Services||None|
|Mexico||16%||June, 1 2020||VAT on digital services|
|Morocco||20%||January 1, 2017||VAT on eServices||None|
|New Zealand||15%||October 1, 2016||GST on eServices||NZ$ 60,000|
|Norway||25%||July 1, 2011||VAT on eServices||NOK 50,000|
|Québec, Canada||9,975%||January 1, 2019||Québec Sales Tax (QST) on eServices|
|Russia||20%||January 1, 2017||VAT on eServices. From January 1, 2019, Business-to-Business (B2B) supplies of digital services from foreign-based businesses to Russian businesses will be subject to VAT.||None|
|Saudi Arabia||5%||January 1, 2018||Standard VAT registration||None|
|Serbia||20%||April 1, 2017||VAT on eServices||None|
|South Africa||14%||July 1, 2014||VAT on eServices (B2B & B2C)||50.000 ZAR|
|South Korea||10%||July 1, 2015||Standard VAT registration||None|
|Singapore||7%||January 1, 2020||GST registration via Overseas Vendor Registration (OVR)||-1. Have an annual global turnover exceeding SGD$100,00; and – 2. Make B2C supplies of digital services in Singapore exceeding SGD$100,000.|
|Switzerland||8%||January 1, 2010||VAT on eServices||CHF 100,000|
|Taiwan||5%||July 1, 2017||Business Tax||NTD 480,000|
|Thailand||10%||January 1, 2020||VAT on eServices||None|
|Turkey||18%||January 1, 2018||VAT on eServices||None|
|United Arab Emirates (UAE)||5%||January 1, 2018||Standard VAT registration||None|
|Uruguay||22%||July 1, 2018||VAT on eServices||None|
|Vietnam||10%||July 1, 2020||The obligation to collect the VAT will fall on banks and/or payment providers, including credit card issuers. It will be their responsibility to identify payments by consumers to foreign online sellers, and deduct withholding VAT.||None|
for DIGITAL SERVICES
Suppliers of Digital Services with a VAT MOSS registration
UK business will need to register under the non-EU VAT MOSS scheme in an E27 member state
EU business will need to VAT register in the UK for to report VAT on digital services in the UK
Non-EU business with UK VAT MOSS registration and any other EU establishment will need to moved their VAT MOSS to an E27
Non-EU business with only UK establishment will need to register under the non-EU VAT MOSS scheme in an E27 member state