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.
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.
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
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||4.50%||Standard VAT registration and fiscal representative||January 1, 2013||Yes||EUR 40,000||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|
|Bahamas||12.00%||Standartd VAT registration||January 1, 2015||Yes||BSD 100,000||Depends on turnover||–||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|
|Egypt||14.00%||VAT on eServices||September 1, 2016||Yes||EGP 500,00||Monthly||General VAT invoicing rules apply||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||MYR 500,00||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||BAHT 1,8 million||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. New tax payers are published on a list by the Ministry of Finance.||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.