VAT on DIGITAL SERVICES

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 many Digital Companies worldwide.

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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.

VAT for Streaming Services

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.

VAT on Video Games

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.

VAT for Software Companies

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.

VAT for ePublishing

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.

VAT for SaaS

Software as a Service or SaaS, has grown rapidly and this business model based on cloud computing is very likely to become the norm when licensing and delivering software services. GVC’s VAT for SaaS services ensure your cloud-based service is VAT compliant around the globe.

GVC can take care of your VAT registrations and manage your VAT filings in all requiRed tax jurisdictions.

VAT ON DIGITAL SERVICES TAX NEWS

Spain to start taxing DST on January 2021

The Spanish government has released the Spanish Digital Service Tax (DST) legislation (1) which will come into force on 16/01/2021 and whose main aim is to tax big Digital Service companies. This approach was introduced by France on 2019 and the...

France Intends to collect its digital services tax (DST) this December

Since an International agreement is still on hold, France is set to collect DST in December. Since 2019 the digital services tax was approved in France. This means that big companies that offer digital services and enjoy global revenues of 750...

EU: Major EU VAT changes for digital platforms facilitating sales of low value goods

Online selling into the EU is about to change dramatically. From July 1, 2021, digital platforms (e.g. online marketplaces) will be liable for the collection and remittance of VAT on sales made via their platform. The VAT due is set to be based on...

Cyprus extends domestic reverse charge to electronic devices

To tackle VAT fraud, the Cypriot authorities are extending the reverse charge mechanism to electronic devics Starting on 1 October 2020, domestic reverse charge will apply in Cyprus on sales of electronic devices such as microchips,...

UK will keep the ‘Facebook tax’ for now, says the Treasury

The UK government says it will keep the digital services tax (DST) until there is an international framework for taxing tech giants, contradicting reports that it planned to drop the tax to appease the US. The levy, which applies to tech companies...

BREXIT | MOSS REGIME NOT VALID AFTER BREXIT – VAT REGISTRATION NEEDED

Germany confirms a final deadline (January 31, 2021) for declaring sales of electronically supplied services to UK private individuals through their Mini-One Stop Shop (MOSS). It is one of the first EU Member States to do so and others will soon...

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 VAT/GST rate for digital services Type of VAT  registration/collection Levy eServices from Non resident registration required Threshold Filing frequency Invoice obligations B2B/B2C
Albania 20.00% Standard VAT registration and fiscal representative January 1, 2015 Yes None Monthly General VAT invoicing rules apply. Currently paper invoices but e-invoing shortly B2C
Algeria 9.00% No details yet December 20, 2019 No None Monthly B2C
Andorra 9.50% Standard VAT registration and fiscal representative January 1, 2014 Yes None Monthly General VAT invoicing rules apply B2C
Argentina 21.00% PSP-model: collection and remittance of VAT by the customer’s payment provider. December 10, 2018 No None B2C
Armenia 20.00% January 1, 2020 No None B2C
Australia 10.00% GST on eServices July 1, 2017 Yes AU$ 75,000 Quarterly No invoicing required. Not allowed to submit full tax invoice. B2C
Azerbaijan 18.00% PSP-model expected: collection and remittance of VAT by the customer’s payment provider. January 1, 2017 No B2C
Bahrain 5.00% VAT on eServices January 1, 2019 Yes None Quarterly General invoicing rules apply. Simplified invoice below BHD 500 B2C
Bangladesh 15.00% VAT on eServices July 1, 2018 Yes None Monthly General VAT invoicing rules apply B2C
Barbados 17.50% VAT on eServices December 1, 2019 Yes None Quarterly General VAT invoicing rules apply B2C
Belarus 20.00% VAT on eServices January 1, 2018 Yes None Quarterly General VAT invoicing rules apply B2C
Canada, British Columbia 7.00% Provincial Sales Tax (PST) on eServices July 1, 2020 Yes CA$ 10,000 Depends on turnover General VAT invoicing rules apply B2C
Canada, Québec 9.975% Québec Sales Tax (QST) on eServices January 1, 2019 Yes CA$ 30,000 Depends on turnover General VAT invoicing rules apply B2C
Canada, Saskatchewan 6.00% PST on eServices January 1, 2019 Yes None Depends on turnover General VAT invoicing rules apply B2C
Chile 19.00% Standard VAT registration and fiscal representative May 1, 2020 Yes None Monthly General VAT invoicing rules apply B2B/B2C
Colombia 19.00% VAT on eServices January 1, 2019 Yes None Bimonthly General VAT invoicing rules apply, VAT in local currency B2C
Costa Rica 13.00% 1. Not mandatory simplified registration. Monthly payments.
2. PSP-model: collection and remittance of VAT by the customer’s payment provider.
August 1, 2020 Not mandatory None B2B/B2C
Ecuador 12.00% 1. Not mandatory registration.
2. PSP-model: collection and remittance of VAT by the customer’s payment provider.
September 16 , 2020 Not mandatory None B2C
European Union – EU Scheme Various MOSS January 1, 2015 Yes EUR 10.000 Quarterly General VAT invoicing rules apply B2C
European Union – non EU Scheme Various MOSS July 1, 2003 Yes None for non-EU Quarterly General VAT invoicing rules apply B2C
Fiji 9.00% VAT on eServices 2020 Yes FJD$ 300,000 Monthly General VAT invoicing rules apply B2C
Ghana 12.50% Standard VAT registration January 1, 2014 Yes  GHS 120,000 Monthly A VAT invoice is the approved invoice produced by the Ghana Revenue Authority. B2B/B2C
Iceland 24.00% VAT on eServices November 1, 2011 Yes ISK 2 milion Bimonthly General VAT invoicing rules apply B2C
India 18.00% GST on OIDAR Servoces and fiscal representative July 1, 2017 Yes None Monthly General VAT invoicing rules apply B2C
Indonesia 10.00% VAT on eServices Unconfirmed Not yet None B2C
Japan 10.00% Standard VAT registration October 1, 2015 Yes JPY 10 million Annual return/quarterly payments B2C, B2B also if registered
Kazakhstan 12.00% VAT on eServices January 1, 2021 Yes None Quarterly No invoice rules apply B2C
Kenya 16.00% Standard VAT registration and Fiscal Representation September 2, 2013 Yes KES 5 million Monthly General VAT invoicing rules apply B2C
Kosovo 18.00% Standard VAT registration and Fiscal Representation September 1, 2020 Yes None Monthly General VAT invoicing rules apply B2C
Kuwait 5.00% Standard VAT registration Januari 1, 2021 (expected) Yes None Quarterly General VAT invoicing rules apply, VAT in local currency B2C
Malaysia 6.00% Service Tax on Imported Digital Services January 1, 2020 Yes None Quarterly General VAT invoicing rules apply B2B/B2C
Mexico 16.00% VAT on eServices and fiscal representative June 1, 2020 Yes None Monthly Simplified invoices B2B/B2C
Moldova 20.00% VAT on eServices April 1, 2020 Yes None Quarterly General VAT invoicing rules apply B2C
Morocco 20.00% VAT on eServices January 1, 2017 Yes None Monthly General VAT invoicing rules apply B2C
New Zealand 15.00% GST on remote Services (GoRS) October 1, 2016 Yes NZ$ 60,000 Quarterly No invoice rules apply B2C
Nigeria 7,50% VAT on eServices February 3, 2020 Yes NGN 25 million Monthly B2C
Norway 25.00% VAT on eServices/eCommerce July 1, 2011 Yes NOK 50,000 Quarterly General VAT invoicing rules apply, VAT in local currency B2C
Oman 5.00% Standard VAT registration Januari 1, 2021 (expected) Yes None Quarterly General VAT invoicing rules apply, VAT in local currency B2C
Paraguay 10.00% PSP-model: collection and remittance of VAT by the customer’s payment provider. January 1, 2020 No None B2C
Phillipines 12.00% VAT on eServices January 1, 2021 Yes PHP 3 million Electronic invoice or receipt subject to local rules and regulations B2C
Russia 20.00% VAT on eServices January 1, 2017 Yes None Quarterly No invoice rules apply B2B/B2C
Saudi Arabia 5.00% Standard VAT registration (Fiscal Representation optional) January 1, 2018 Yes None Quarterly General VAT invoicing rules apply, VAT in local currency B2C
Serbia 20.00% Standard VAT registration and Fiscal Representation April 1, 2017 Yes None Monthly General VAT invoicing rules apply, reference to fiscal rep. B2B/B2C
South Africa 15.00% VAT on eServices (B2B & B2C) July 1, 2014 Yes ZAR 1 million Bimonthly General VAT invoicing rules appy, VAT in local currency B2B/B2C
South Korea 10.00% VAT on eServices July 1, 2015 Yes None Quarterly No invoice rules apply B2C
Singapore 7.00% GST registration via Overseas Vendor Registration (OVR) January 1, 2020 Yes 1. Have an annual global turnover exceeding SGD$100,00; and
2. Make B2C supplies of digital services in Singapore exceeding SGD$100,000.
Quarterly No invoice rules apply B2C
Switzerland 7.70% VAT on eServices January 1, 2010 Yes CHF 100,000 Quarterly No invoice rules apply B2C, B2B also if registered
Taiwan 5.00% Business Tax on eServices July 1, 2017 Yes NTD 480,000 Bimonthly Issuing of mandatory Government controlled invoices is mandatory (eGui) B2C
Thailand 7.00% VAT on eServices July 1, 2020 Yes None Quarterly No invoicing required. Not allowed to submit full tax invoice. B2C
Turkey 18.00% VAT on eServices January 1, 2018 Yes None Monthly No invoice rules apply B2C (Sales list for B2B trasactions)
Uganda 18.00% VAT on eServices July 1, 2018 Yes None B2C
Ukraine 20.00% VAT on eServices Januari 1, 2021 Yes None Quarterly General VAT invoicing rules apply, VAT in local currency B2C
United Arab Emirates (UAE) 5.00% Standard VAT registration January 1, 2018 Yes None Quarterly General VAT invoicing rules apply, VAT in local currency B2C
United Kingdom 20.00% VAT on eServices (expected) January 1, 2021 Not yet (part of EU MOSS) Quarterly B2C
Uruguay 22.00% Standard VAT registration January 1, 2018 Yes None Monthly VAT invoice rules of sellers country apply. B2C
Uzbekistan 15.00% VAT on eServices January 1, 2020 Yes None Monthly General VAT invoicing rules apply, VAT in local currency B2C
Vietnam 10.00% PSP-model: collection and remittance of VAT by the customer’s payment provider. July 1, 2020 No None B2C

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

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VAT on Digital Services – Types of Services with VAT obligations

– Electronic Services.

These digital services include all types of services that are provided online using a “digital network” or the internet. Examples of these digital services can be online gaming or news providers. All these services require IT in order to be provided to the final consumer.

– Telecommunication services.

These digital services are typically the services we all use every day on a wide scale. Sending and receiving text messages, sending images, sounds and information with the use of cable, waves and other electromagnetic systems.

– Radio & Television services

These type of broadcasting digital services are the audiovisual services provided via all communication networks to the general public for massive consumption viewing or listening.

These services above when provided by non-EU companies they are taxed in the country where your customer is. In EU you can register for the One Stop Shop in order to prevent from having to register for VAT on digital services in every country.