On Oct 24, the Organization for Economic Co-operation and Development (OECD) released guidance on how countries can implement effective VAT collection systems for cross-border trade, particularly concerning digital/electronic supplies. The guidance, which is entitled, Mechanisms for the Effective Collection of VAT/GST, relates mostly to design options for effective VAT collection mechanisms and registration systems.
This new advice falls closely on the heals of the release of their final report on the Action Plan for Base Erosion and Profit Shifting, including Action #1 which provided advice on the effective application of VAT to cross-border digital supplies. Businesses should take note, as Action #1, directly or indirectly, resulted in changes to the taxation of B2C electronic commerce in multiple countries across the globe.
For more information, stay tuned for a blog to be published by Sovos' Matthew Walsh.
About the Author
Charles has been involved in monitoring the progress of the Streamlined Sales Tax Initiative and has given talks and presentations on a variety of tax topics including Sarbanes-Oxley, drop shipments, the taxation of high technology transactions, and the growth of sales tax holidays. He is a lawyer and a member of the Massachusetts Bar, and holds a BS in Business Economics from Bentley College, a JD from Boston University School of Law, and an LL.M in Taxation from Boston University School of Law. Prior to joining Sovos Compliance, he worked as an arbitration attorney for John Hancock.More Content by Charles Maniace