Canada to intro EU-like GST on e-commerce

“Canada’s government is considering new tax rules to level the playing field for e-commerce vendors that complain foreign giants such as Inc., Apple Inc. and Netflix Inc. have an unfair edge when selling digital products.”

A sensible and interesting article in The Globe and Mail about Canada following in the footsteps of the EU and other countries by taxing online services provided by non-residents to Canadian individuals.

More to come!

Comments (1)

Any progress on GST in India? – UPDATED


“Prime Minister Narendra Modi has given directions for Goods and Services Tax to be rolled out by April 2016.”


There seems to be some movement in getting India to a federal GST, but the chances of survival are slim. AM Legals writes:

“GST will ultimately create a unified market by ending up the multiple levies of taxes by the Centre and the States. Consequently, it will lower the costs for business and more revenue for  the government.The states were afraid of loss of flexibility but it is said that this meeting has cleared many such fears. Broad agreement has been arrived between the Centre and various States.”

See here for more:

Indian VAT experts are sceptical, and rightfully so. A EY partner gave an extensive interview with great comments that is worth your consideration here: He says:

“VAT payable to a government is the output tax minus the input tax. Now, these states say that VAT is the output tax minus the restricted input tax deduction. And restricted input tax deduction means no credit up to 4% of the tax. The moment input tax credit is restricted, there is no longer a VAT. The worse thing is when input tax is collected and no input tax credit is given. Then, it becomes a turnover tax; and VAT was designed to get rid of the turnover tax.

Nothing destroys an economy like a turnover tax. When the customs union was formed in the EU, the first thing they did was to get rid of the turnover tax and replace it with the VAT.”

Comments off

Buon anno – Italy to increase their VAT rate!

Italy did not waste any time to announce new VAT rate increases, starting in 2016 to a whopping 25.5% in 2018. The current standard rate in Italy is 22%.

This is not as crazy as it sounds: the OECD has long been trumpeting VAT as the ideal revenue instrument to improve the economy – and countries like Sweden, Denmark have had a rate of 25% for ages.

There is more news from Italy – please see the KPMG leaflet below.

Download (PDF, 321KB)

Comments off

Again – U.S. e-businesses in the EU

I picked this video from the YouTube-like site Vimeo. It talks about the EU VAT requirements for U.S. businesses.

From the description it seems like these rules are new – not true, this has been going on since 2003. The presenters remediate this error in their presentation.

Apologies for the not-so-great sound quality.

US digital companies and their EU VAT challenge from Taxamo on Vimeo.

Comments off

TGIF: A VAT for the U.S.?

Today is Friday December 12, 2014 and the Progressive Consumption Tax Act has seen the light of day!

But wait – is it a VAT? I will have a look at the bill text (see below) and let you know. There is no rush; this is just a discussion document and won’t get any serious consideration any time soon.

The press release is here:

Pundits did not take long to take a VAT entirely out of its context – see

“If US producers sell to other countries most charge a consumption tax when the US producers have already paid US taxes.  If we ever want to come out of our current economic malaise we need  to make more of what we consume and make our products globally competitive.”

Click here for the pdf of the bill text:

Comments off

Swiss VAT for U.S. companies

A number of my clients provide installation and maintenance services as part of their business. I call these services “boots on the ground” services, because they require physical, on-site work.

Doing so in Switzerland may create a VAT registration liability from January 1, 2015 onwards. This is because the definition of the supply of “goods” in Swiss law includes installation and maintenance – these supplies are not considered as services.

The Swiss tax administration puts it this way:

“it refers not only to the transfer of the economic power to dispose of an item, but also to the execution of work on an item and even the rental and leasing of an item.”

Therefore, no reverse charge on Swiss installation and maintenance services, even if they have been subcontracted to a Swiss contractor!

KPMG writes:

“As of the beginning of 2015, foreign companies whose revenues from the supplies of goods (incl. construction and similar work) effected in Switzerland exceed CHF 100,000 p.a. will be liable to register for VAT in Switzerland and charge Swiss VAT on the invoices to their clients. If the annual threshold is not exceeded, the business might still opt to register for VAT on a voluntary basis, or – as is the case today – remain unregistered and benefit from the reverse-charge procedure.

The threshold of CHF 100,000 will explicitly not apply to the services provided by foreign businesses not registered for Swiss VAT (except for B2C electronic services). The reverse-charge procedure will thus remain applicable regardless of the turnover achieved by the concerned entities.

It is however worth mentioning that the Swiss definition of services is much tighter than e.g. the EU’s one and, for example, does not include pure installation or maintenance work or leasing supplies.”

More info in this KPMG link:

And the notice from the Swiss tax authorities (English version):

Comments off

U.S. Lawmaker to Release VAT Legislation

“Senate Finance Committee member Benjamin L. Cardin, D-Md., told Tax Analysts December 8 that he will release legislation later in the week proposing a U.S. VAT that he hopes will prompt serious discussion on the matter in the 114th Congress.
“It’s finished,” Cardin said of the bill, adding that he will likely release it on December 10.
Cardin said he is not seeking cosponsors on the bill at this time since it will have to be reintroduced next year but noted that he’s worked with many lawmakers who are interested in the legislation.”

The link is here:

So the Senator releases legislation now, to be discussed next year. I will let you know when it’s time to wake up.

Comments (1)