Tax administrations continue to grapple with the challenges created by highly digitalised business models and are exploring different approaches to the tax treatment of the digital economy. One of our lead articles looks at the new “deemed supplier” rule for platform operators that will apply in Switzerland starting in 2025 and that will impose new VAT compliance and reporting obligations on platforms. Peru and the Philippines are introducing GST/VAT, respectively, on digital transactions involving nonresident digital service providers. The rules in both countries will impact streaming activities, cloud storage, social media access, online publications, etc. and will result in tax compliance obligations for nonresident providers. And the recently introduced DST in Canada has been challenged by the US as discriminatory because it singles out US companies for taxation while effectively excluding foreign firms engaged in similar lines of e-commerce.
Reporting obligations continue to be on the rise, with Australia requiring businesses to make new climate-related financial disclosures and Norway requiring digital customs registration and reporting, and new guidance released on the application of CBAM in the EU that addresses challenges faced by importers in collecting data to fulfil their reporting obligations.
Other indirect tax developments around the world include:
- A substantial reduction in the tax rate on the purchase of foreign currency in Argentina for freight and other transportation services rendered by nonresidents related to the import and export of goods, or their acquisition.
- New tariffs in Canada on Chinese-made EVs and steel and aluminium products and new tariffs to be imposed on Chinese battery electric vehicles by the EU.
- An input VAT deduction in Italy for special purpose vehicles involved in merger leveraged buy-out transactions.
- Changes to the criteria for the temporary importation of “sensitive goods” into Mexico and restrictions on such imports, which have given rise to challenges for IMMEX companies in the country.
- A VAT exemption for crypto transactions in the UAE.
- INTERNATIONAL: Indirect Tax Bytes
- ARGENTINA: Tax Rate on Certain Foreign Currency Transactions Reduced
- AUSTRALIA: Mandatory Climate-Related Reporting on the Horizon
- CANADA: Mandatory CBSA Assessment and CARM Phase 2 registration and upcoming black-out period
- COLOMBIA: Rules Governing the Electronic Equivalent Document Revised
- FINLAND: VAT Rates Increased and Reclassified
- FRANCE: VAT Regime for Accommodation Services Clarified
- ITALY: SPV Can Deduct Input VAT Incurred in MLBO Transaction
- MEXICO: Criteria for Temporary Importation of Sensitive Goods Revised
- NORWAY: Digital Reporting of Information to Customs Before Import of Goods to be Mandatory in 2025
- PERU: New Tax on Digital Platforms Introduced
- SPAIN: Supreme Court asks CJEU to rule on VAT deduction for client entertainment expenses
- SWITZERLAND:
- UNITED ARAB EMIRATES: Crypto and Fund Management Services Exempt from VAT
- UNITED KINGDOM:
- UNITED STATES:
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