“It is unfair that overseas-based businesses selling services into Australia may not charge GST when local businesses have to charge GST. A local business that employs Australians pays rent in Australia, pays tax in Australia, and helps build our economy is disadvantaged by the current system. We will level the playing field for Australian businesses by mandating that foreign businesses supplying digital products and services are subject to the GST.
From April 1, 2017, international digital businesses with Serbia-based consumers will see an impact on operating costs, regulatory burdens, and resource management as Serbian VAT rules extend to cover their digital supplies.
Here are seven difficulties that any international digital business with consumers in Serbia should be aware for:
1. Tax advice Before you can think of making any inroads in relation to compliance with Serbia’s extension of VAT to cover cross-border digital supplies there is the significant cost in sourcing expert tax advice in relation to the law change.
Australia Digital GST liabilities are to become a reality for international digital service suppliers on the 1st of July.
On July 1, 2017, Australia’s Goods and Services Tax (GST) will – as outlined here new law — be extended to the cross-border supplies of digital services bought by Australian consumers. These supplies include digital services (e.g. the streaming, or downloading, of movies, music, apps, games, e-books) in addition to services such as architectural or legal services.
On January 1, 2017, Russia became the latest country to change laws aimed at taxing the digital economy.
The specific change in Russia is that 18% value added tax (VAT) is now applied to the sale of a digital service based on the location of the end consumer in Russia, rather than the supplier’s location. Russia, mirroring the EU taxation approach, requires two pieces of evidence to be collected during the transaction and there is no threshold for compliance.
Let’s start with the last first.
The ugly: Did you know that the Indian Government is charging digital businesses a fee for collecting tax on their behalf. This fee is over 1% and comes off the digital business’ bottom line. It is not borne by the Indian consumer who pays the service tax.
This fee is charged by way of a margined FX rate. This rate must be used by a foreign business when converting the tax that the business has collected in foreign currency from Indian consumers.
International suppliers of digital services have just two weeks to prepare for new place of consumption tax rules just introduced in India.
On November 9 India’s Central Board of Excise and Customs (CBEC) released an official circular identifying and explaining the rule change. The new rules come into effect on Thursday, December 1, and specifically target the cross-border supply of Business-to-Consumer (B2C) digital services to India-based consumers. The technical tax development here is the withdrawal of the exemption on these B2C cross-border sales.
India – one of the world’s fastest-growing large economies – is finally about to introduce a new taxation system, including a plan to tax the country’s digital economy.
As reflected in recent international approaches, the trend of enacting destination-based indirect tax legislation is to the fore. Ever since the release of the Organisation for Economic Co-operation and Development (OECD) Base Erosion and Profit Shifting (BEPS) report in October 2015 tax jurisdictions across the globe have taken stock of their existing tax collection systems and reassessing options.
Compliance with international tax regimes can be a mountain to climb for merchants that’s why we continue to expand and today can unveil our Swiss VAT support. Swiss VAT support: the key element to digital sales Since January 1, 2010, the Swiss Federal Tax Authority (FTA) has levied a value added tax (VAT) on the supply of services from non-resident companies to Swiss residents.
Article 10 of the Swiss VAT Act states that VAT is applied to a service supplied from “any person who carries on a business based abroad that supplies telecommunication or electronic services on Swiss territory to recipients who are not liable to the tax”.
South Korea has long been admired as a digital economy visionary so it’s with great pleasure that we reveal our support for South Korean VAT compliance.
We understand that South Korea is a key marketplace for digital service merchants and compliance with the local tax laws is non-negotiable. Now, with Taxamo, merchants can achieve this compliance without major upheaval to their existing strategies and systems.
We have distilled our international digital tax compliance solution into one simple integration.
The standard rate of VAT in Greece is to increase from 23% to 24% on June 1 after the relevant tax bill amendments were adopted by the Greek Parliament on May 22.
The tax rate increases approved on Sunday will have a broad impact as increases were announced to the taxation of cars, fuel, cable TV, lotteries, telephone subscriptions, beer, and cigars.
The background to these taxation measures was the May 24 meeting of Eurozone finance ministers in Brussels.
New Zealand GST on digital services supplied from abroad to New Zealand-based consumers will come into effect on October 1, 2016.
Details of the proposed new digital GST – due to come into effect on October 1, 2016 – passed a third reading in the New Zealand parliament on May 10. The hurdling of this latest legislative barrier now leaves the path clear for the new rules concerning the supply of digital services by foreign companies to New Zealand consumers to be introduced at the start of Q4 2016.
Russia digital VAT looks set to become a reality by 2017.
But why is Russia making this move now?
First, some context. At the start of December 2015 it was revealed that Russia plans to introduce a new value-added tax (VAT) on digital services provided by foreign companies in January 2017.
This new 18% VAT (the standard rate) will mirror similar taxation intentions in the European Union (EU), and is aimed at non-Russian digital service companies supplying Russian consumers.