VAT, GST, consumption tax, sales tax, use tax – no matter what term, or name, is used it is clear that the taxation of the digital economy is growing in popularity.
Here we outline the tax jurisdictions where such destination-based indirect tax rules are in place.
European Union Value-Added Tax (VAT) rate: 28 EU Member State VAT rates - taxation depends on location of the consumer In January 2015 new rules on the taxation of cross-border supplies of digital services to EU-based consumers came into force.
Japanese eCommerce has been revamped with the government now requiring foreign businesses supplying eServices to Japanese consumers to account for the current 8% consumption tax. The new rules came into effect on October 1, 2015.
The bill amending the Japanese Consumption Tax (JCT) was passed on March 31. Registrations for the new digital consumption tax opened on July 1 and on August 17 Japan’s National Tax Agency (NTA) released a list of foreign digital service businesses thus far registered.
New product features offer a single integration for international digital tax compliance. Co. Kerry, Ireland: October 7, 2015 – Delivering on its promise to support digital merchants wherever they sell, Taxamo, a global digital tax solution, has expanded its flagship support for EU VAT and launched support for U.S. Sales Tax & Japanese Consumption Tax (JCT).
Tax on digital sales was introduced in some U.S. States as far back as 2003 and on October 1, 2015, Japan became the 36th country to introduce new ‘place of supply’ tax rules.
Tuesday, September 29 – Ireland: In less than 48 hours, Japan will become the 36th country to introduce new ‘place of supply’ tax rules on digital service sales or ‘digital downloads’. These new consumption-based tax rules will apply to cross-border digital services provided by overseas businesses to the Japanese market.
To illustrate the evolution of international digital taxation, Taxamo, a digital tax compliance solution, have released an infographic highlighting the timeline of significant events.