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DLA Piper Releases New Digital VAT Guide

by Ulrika Lomas,, Brussels

03 September 2015

DLA Piper has launched the second edition of its "Global VAT Guide: Cross border supplies of intangible services, rights, and digital content."

The Guide provides a country-by-country overview of VAT (GST) law as it applies to cross-border supplies of intangibles in key markets. This includes outlining new or proposed VAT/GST law changes in the EU and for countries such as Malaysia, Japan, and Australia.

DLA Piper's London-based Global Head of VAT, Richard Woolich, commented: "Revenue authorities throughout the world are increasingly focused on taxing cross-border transactions, including in the growing e-commerce sector. For any business looking to sell into foreign markets, it is a critical time to consider the VAT rules in the jurisdiction where the customers are based and remain informed of changes and developments in key markets. Ignoring VAT can be very costly."

Sydney-based DLA Piper GST Partner Matthew Cridland added: "From an Australian perspective, it is critical that local e-commerce businesses selling digital content or providing services to consumers in foreign countries understand the VAT implications. While exports from Australia are GST-free, VAT or similar taxes may apply in destination countries, often at rates of 20 percent or more. With the rules rapidly changing, it is easy to make costly mistakes."

The Guide highlights the following major international VAT developments:

  • The OECD's publication of draft VAT Guidelines on "business-to-consumer" (B2C) supplies;
  • The European Union's introduction of new place of supply rules and an expanded "One-Stop-Shop" for supplies of digital content, telecom services, and broadcasting services with effect from January 1, 2015;
  • Consumption tax reforms in Japan, which will apply to inbound e-commerce supplies from October 1, 2015; and
  • The announcement of potential GST reforms in Australia, which will expand the scope of the GST to capture inbound intangible supplies in a B2C context from July 1, 2017.
TAGS: compliance | tax | business | value added tax (VAT) | commerce | law | Australia | e-commerce | Malaysia | Japan | services | Europe | Tax

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