Tag Archive for vat

OECD Efforts To Harmonize Value Added Tax Rules

OECD

Businesses that sell goods and services across international borders may soon face major changes, as recently-unveiled plans by the Organisation for Economic Co-operation and Development to harmonize the way online commerce is taxed by governments around the world appear set to become law within a few years.

Recently, the G20 ministers meeting in Japan endorsed an overhaul of the global corporate tax regime that was presented there by the OECD. Published reports immediately after the event quoted experts as saying the proposed corporate tax “roadmap” would represent “the most significant” such package of tax changes “in over a century.”

This “Programme of Work to Develop a Consensus Solution to the Tax Challenges Arising from the Digitalisation of the Economy,”  as it is officially called, is being considered as a means of addressing at a global level the way corporations are taxed, in an era that is seeing financial transactions increasingly taking place online and carried out over blockchain networks.

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Written by | Posted in OECD • VAT

It’s All Greek To Me!- Multistate Tax & Foreign Companies

I just returned from an amazing vacation – a cruise of the Mediterranean. We started in Athens, Greece; spent just a couple days there enjoying the history, and then boarded our ship.  The cruise took us to the Greek isles of Santorini and Crete, and then we sailed to Italy, the beautiful St. Tropez, France, and finally Barcelona, Spain. We finished our vacation by sampling many, many tapas and wines in Barcelona. About midway through our vacation, I found myself wondering – how could I do U.S. multistate tax consulting somewhere in Europe?  I’m still working on that angle, and will certainly keep you posted. Read More

Written by | Posted in International

Tax Policy Reforms Driven By Focus On Boosting Growth

While fiscal consolidation was the key driver of tax reforms in the years following the global economic crisis, the main emphasis of recent tax reforms has shifted back to tax measures aimed at boosting economic growth, according to a new OECD report.

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Written by | Posted in OECD • Tax Reform

Would Broader Sales Tax Base Deliver Savings?

Annette Nellen

A review of a few recent sales tax advisory opinions, issued by the New York State Department of Taxation and Finance, reminds us of the complexities of sales tax exemptions and special definitions of taxed items.

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Written by | Posted in Sales/Use Tax • Tax Policy

Is There A VAT In Your Future?

The value-added tax (VAT) has been adopted by every developed country and most developing countries in the world. There is, however, one exception –The United States. That may be changing as there is currently discussion regarding its adoption in the U. S.

The value-added tax is a tax on goods and services and is collected at every step in the production chain. This is unlike the sales tax, which is paid only on retail sales. In a sense it is similar to sales taxes that are currently in place in 45 states as it is a consumption tax. VAT rates, obviously, vary from country, but in a survey of OECD countries, the rate varies from a low of five percent to a high of 24.5 percent.

How the VAT Works

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Written by | Posted in VAT

Are You Providing Digital Services To Japan?

If you’re a provider of digital services to customers in Japan, please be aware that the changes being introduced on 1st October 2015 may affect you.

Old Rules

Under the Consumption Tax Act (Act No. 108 of 1988), a service rendered in Japan is subject to Consumption Tax which is equivalent to VAT (i.e. Value Added Tax).

The criteria for determining whether a service is rendered inside or outside Japan varies depending on the nature of the service.

Under the current rules (i.e. pre October 2015), the tax treatment relating to the provision of e-commerce services, such as e-books, online games, internet delivery of music, etc. is Read More

Written by | Posted in International • Tax Policy

European Court of Justice Judgement In The Skandia America Corporation VAT Case (C7/13)

The European Court of Justice held that the supply of services by a non-EU Head Office to a branch situated in the E.U. is now liable to VAT where that branch is part of a VAT group.

VAT grouping allows EU member states to treat two or more companies as a single entity for VAT purposes which means transactions between members of a VAT group are normally ignored for VAT purposes.

However, the ruling on this dispute between Skandia America Corporation and the Swedish Tax Authorities means that services previously deemed to be VAT exempt will now be subject to VAT rates of between 15% and 27%.

This decision is of particular relevance to the financial services industry since the Read More

Written by | Posted in VAT

Is There A VAT In Your Future?

The value-added tax (VAT) has been adopted by every developed country and most developing countries in the world. There is, however, one exception –The United States. That may be changing as there is currently discussion regarding its adoption in the U. S.

The value-added tax is a tax on goods and services and is collected at every step in the production chain. This is unlike the sales tax, which is paid only on retail sales. In a sense it is similar to sales taxes that are currently in place in 45 states as it is a consumption tax. VAT rates, obviously, vary from country, but in a survey of Organisation for Economic Co-operation and Development (OECD) countries, the rate varies from a low of five percent to a high of 24.5 percent. Read More

Written by | Posted in VAT

Should Schools And Students Pay Sales Tax (or VAT)?

It might seem odd for a state school or any government agency to pay taxes. Generally, they are exempt from income and property taxes, but likely pay sales tax (or VAT if outside the US) on purchases. Students of the state schools also pay sales tax on taxable items they purchase from the school bookstore or for their education (such as books).

Isn’t this just a roundabout way for the state to be paying tax to itself? Would it be more efficient to exempt purchases of state schools and agencies from sales tax?

What reminded me of this issue was an article about a bill (HB 4165) introduced in Singapore to create a VAT exemption for goods and services purchased from schools. [“Bill filed to exempt goods sold in schools from VAT,” by Miranda, Business World Online, Read More

Written by | Posted in Sales/Use Tax • VAT

VAT Consequences For I.T. Companies In Ireland – Part V

One of the biggest problems envisaged with the MOSS systems is identifying the location of the customer.

It is essential for suppliers to correctly identify the customer’s location/permanent address/usual residence so they can charge the correct VAT rate applicable in that member state.

For most telecommunication, broadcasting and electronically supplied services, it will be obvious where the customer resides. The decision about the place of supply of those services should be supported by two pieces of non-contradictory evidence including credit card details and a billing address for example. Read More

Written by | Posted in TaxConnections

VAT Consequences For I.T. Companies In Ireland – Part IV

What needs to be considered prior to the introduction of the MOSS Scheme on 1st January 2015 by businesses already established in Ireland or thinking about establishing in Ireland?

• It is essential to examine your contract to establish who exactly is paying you and if your customer is a taxable or non taxable person. This is particularly important in the context of undisclosed agents/commissionaire structures, etc.

• You must determine where your B2C customers are located. Your business may require additional contractual provisions and amendments to your systems to include this information.

• It is important to examine the impact of the different VAT rates in each E.U. member state Read More

Written by | Posted in Europe, Middle East • VAT

VAT Consequences For I.T. Companies In Ireland – Part III

From 1 January 2015, supplies of telecommunications, broadcasting and electronically supplied services made by EU suppliers to private, non-taxable individuals and non-business customers will be liable to VAT in the customer’s Member State.

The current place of supply/taxation is where the supplier is located, but from 1st January 2015 this will move to the place of consumption or the place where the consumer normally resides or is established.

Suppliers of such services will need to determine where their customers are established or where they usually reside. They will need to account for VAT at the rate applicable in that Member State. This is a requirement regardless of the E.U. state in which the Supplier is Read More

Written by | Posted in Europe, Middle East • VAT
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