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.
A new report from Canadian public policy think-tank, the C.D. Howe Institute, has highlighted a digital services market imbalance between domestic and foreign-based suppliers of digital services. The report recommends that Canada’s Excise Tax Act be amended so as to apply to businesses that supply digital goods and service for consumption within Canada.
The report mirrors the reasons that tax authorities worldwide have amended their Value Added Tax (VAT)/Goods and Services Tax (GST) system.
Digital disruption has laid waste to numerous traditional industries, from the ramifications of internet publishing on the print media to the effects of the Uber and AirBnB models on the car travel and lodging sectors.
An increasingly connected (and smartphone-obsessed) population expects this disruption. Today, consumption is all about the now economy. It is now easier than ever, thanks to infrastructural advances in broadband and WiFi, for consumers to access digital content from anywhere in the world.
If you are a Canadian merchant selling digital goods and services in Canada you can now use Taxamo for Canada sales tax compliance.
Here at Taxamo we have had feedback from our Canadian digital service merchants that they found it difficult to comply with domestic tax reporting requirements while also complying with new global digital tax requirements.
Taxamo has launched support of Canadian sales tax compliance for our merchants who have a Canadian domestic reporting requirement.