Michaela Merz


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South African electronically supplied services – Webcast recording now available


South Africa has proposed extensive reforms for electronic services supplies (“ESS”) which were announced in the draft electronic services Regulation on 21 February 2018. A recorded version of the Webcast is now available on our Webcast page. Continue reading


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Japan – Consumption tax filing obligations for digital service providers


Japan has implemented new regulation for x-border digital service where the B2C digital services by offshore service providers to Japanese customers are subject to Japanese consumption tax.
As the filing due date for the company whose fiscal year end is December is 28 February, please find HERE a quick Web Video as an alert. Continue reading


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Norway: Foreign suppliers of Electronic Services (B2C) are required to register for VAT through a simplified VAT registration scheme (VOES)


Norway introduced VAT on supplies from abroad of electronic services to consumers (B2C) as from 1 July 2011. VAT is collected through a simplified registration arrangement, called the VOES-scheme, similar to the MOSS scheme in the EU. Reporting of output VAT is done electronically on a quarterly basis, but VAT recovery is not possible through the scheme. Supplies of electronic services to Norwegian businesses (B2B) is VAT taxable on the purchasers hand via the reverse charge mechanism. Continue reading


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India – electronic services – new place of supply as from 1 of December 2016


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The Central Government of India amended the service tax law in relation to the provision of electronic services to include services that are provided by a service provider located outside India to a service recipient located in India. Place of supply of electronic services has changes as from 1 of December 2017. The ‘place of provision’ of electronic services has changed from ‘location of service provider’ to ‘location of service recipient’. Continue reading


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PwC Webcast – India’s New Indirect Tax Levy on B2B and B2C Digital Supplies


webcast-indiaAs part of the changes to India’s tax landscape and in alignment with BEPS Action Paper on the Digital economy (eCommerce, internet businesses, etc), the Government of India has made certain key amendments to the Indirect tax law as applicable to B2B and B2C Online as well as eCommerce companies. Continue reading


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Taiwan – registration obligation for foreign companies providing B2C services expected soon


PwC_fl_30mmh_cUnder current VAT regulations, payment of VAT on provision of services sold by foreign companies to individual Taiwanese customers are the obligation of the individual Taiwanese customer for purchase of services exceeding TWD 3,000 per transaction.

22 of September, a draft amendment of the Business Tax Act concerning sales of cross-border B2C services was approved by the Executive Yuan, where the obligation to report and pay VAT is to be switched to the foreign companies that provide services to individual Taiwanese customers.

The foreign companies would be required to register for VAT purposes in Taiwan and pay VAT. However, many of the key aspects (e.g. VAT registration threshold, definition of a foreign taxpayer etc.) of the new VAT mechanism have not been announced by the tax authority. Moreover, the draft amendments to the Business Tax Act should be further passed by the Legislative Yuan in order for it to be enacted.

For cross-border B2B sales, the current reverse charge mechanism is to remain in place.

Following issue remain open

Uncertainty over definition of foreign taxpayer liable for VAT :
As cross-border digital services are often provided via a platform (e.g. App developer selling Apps through an App platform), whether the App developer or the platform provider would be the taxpayer liable for VAT registration is uncertain. During open discussions with the tax authority, a clear answer was not provided. Therefore, this issue will need to be resolved in the future, possibly through further promulgations by the tax authority or via private tax ruling applications.

VAT registration and exemptions
Under this new mechanism, foreign taxpayers liable for VAT would be required to register in Taiwan. However, as compared with the requirements for domestic companies, it is expected that the registration procedures and requirements for foreign taxpayers would be simplified. Moreover, it is also expected that there would be an exemption threshold, whereby foreign taxpayers with sales under said threshold would be exempt from registration and payment of VAT. However, at what amount the exemption threshold would be set at is currently unclear.

Implications for corporate income tax.
The tax authority has indicated that they have plans to propose corresponding corporate income tax reform for foreign cross-border sellers of services. However, there is currently no official time frame for this as the tax authority has been concentrating its efforts on the new VAT mechanism.
For further details please contact li-li.chou@tw.pwc.com | http://www.pwc.tw.

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Russia – draft legislation on VAT on B2C supply of electronic services


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Russia can be the next in line to join the countries that impose VAT on the B2C supply of electronic services by non-established service provider. A draft legislation that would require foreign companies to start charging VAT on internet / digital services provided to individuals is currently being considered by the Russian State Duma. Continue reading