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.
