Welcome to 2023! The first issue of Indirect Tax News for 2023 includes a chart highlighting VAT/GST changes around the globe that apply as from 1 January. Our second feature article looks at the European Commission’s extensive proposals to modernise the EU VAT rules, including the introduction of mandatory electronic invoicing, a shift to the real-time sharing of transaction-based data, an extension of the “deemed supplier” rule and single VAT registration.
The application of sales tax to digital supplies of goods, services and intangibles has become increasingly complex in recent years, and online gaming activities are no exception. The explosive growth in this sector is attracting attention beyond just players—governments, regulators and tax authorities are all looking at the industry. Two articles—one from Canada and the other from the U.S.— encapsulate some of the challenges faced by taxpayers in the online gaming industry in terms of activities that are subject to sales tax, how the tax is calculated and who is required to collect the tax.
The EU payment services directive—which will introduce recordkeeping and reporting requirements to prevent VAT fraud starting on 1 January 2024—will require payment services providers to keep electronic records of data on cross-border payments and to share the records with the tax authorities throughout the EU, via a newly created central EU database. The Netherlands has released draft legislation to transpose the directive into its domestic law and the Slovak Republic has implemented the rules.
Spain and the Slovak Republic have been tinkering with their VAT rules, including the bad debt relief rules. Norway has extended the scope of its VAT regime to apply to all “remotely deliverable services” from abroad to consumers in the Norwegian VAT area (rather than just remotely deliverable electronic services to consumers). In the Middle East, the Oman tax authorities are starting to review VAT returns and requiring some taxpayers to complete a “checklist” when filing returns and the UAE authorities have issued useful guidance on VAT, including how the statute of limitations will be applied.
VAT/GST exemptions have been clarified/announced in Indonesia and Singapore, respectively. A new Indonesian regulation provides details and guidance on the VAT exemption for the mining and drilling industry and the issuance, transfer or sale of carbon credits is no longer treated as a supply of goods or services for Singapore GST purposes.
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Read these articles and much more in the January 2023 issue of Indirect Tax News!
- Bahrain: Digital Stamps Scheme for cigarettes sold in local market
- Belgium: New rules apply to the direct attribution method for VAT deduction
- Canada: Does sales tax apply to online gaming?
- European Union:
- International:
- India: Government engaging in multi-pronged drive to boost export industry
- Indonesia: VAT exemption for mining and drilling activities clarified
- Netherlands: Legislative proposal released on new VAT recordkeeping and reporting obligations
- New Zealand: New reporting and GST liability proposed for the gig and sharing economy
- Norway: General VAT liability introduced on cross-border B2C supplies of non-electronic services
- Oman: Lessons learned from the first year of VAT
- Singapore: Carbon credits now not subject to GST
- Slovakia: Changes to VAT Act reduce administrative burdens and VAT rate on certain supplies
- Spain: Changes made to use and enjoyment rule, reverse charge and VAT recovery on bad debts
- United Arab Emirates: New decree-law clarifies and updates VAT rules
- United States: States wagering on sales tax revenue from online gaming and sportsbook providers
Content adapted from BDO Global.