OECD Publishes Guidelines on Taxation of Services and Intangible Goods

April 13, 2017

Charles Riordan

Author

Sovos

This blog was last updated on June 27, 2021

The Organization for Economic Cooperation and Development (OECD), in newly-published 2017 Guidelines for VAT/GST, has opined on how they believe VAT should be assessed on services and intangibles. Their primary recommendations are that countries adopt regimes which:

1. Tax services and intangibles at the place of consumption;
2. Tax business-to-business (B2B) transactions at the location where the service/intangible is used;
3. Apply a “reverse charge” for cross-border B2B transactions, shifting liability to the purchaser;
4. Tax business-to-consumer (B2C) transactions at the place where the consumer resides; and
5. Adopt simplified registration requirements for non-resident suppliers of B2C services and intangibles.

These guidelines are part of a continuing conversation on VAT and the digital economy, which was kick-started in 2013 by the OECD’s publication of its Action Plan on Base Erosion and Profit Shifting.

Charles Riordan

Charles Riordan is a member of the Regulatory Analysis team at Sovos specializing in international taxation, with a focus on Value Added Tax systems in the European Union. Charles received his J.D. from Boston College Law School in 2013 and is an active member of the Massachusetts Bar.

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