Across the globe indirect VAT/GST rules are being amended to ensure that foreign digital suppliers become liable for the collection and remittance of these taxes.
This pace of change, from a taxation perspective, is rapid. In the first half of 2017 alone Russia, Serbia, Taiwan, India, and Australia all amended their indirect taxation laws (or in India’s case introduced a whole new system).
The Organisation for Economic Co-Operation and Development (OECD) has already approved the destination-based principle in Action 1 of its Base Erosion and Profit Shifting (BEPS) report.
In a move that will have major implications for digital businesses across the globe Brazil – home to 120 million internet shoppers – is about to change how digital services are taxed.
A Brazilian State Agreement (Convênio ICMS 106⁄2017) has revealed plans to tax digital services – e.g. games, streaming services, music and image downloads, etc — via the State tax mechanism (ICMS). ICMS is a state tax applied in Brazil’s federal states to the supply of goods and services.