Distribution models in Europe – webcast slides

I did a webcast discussing distribution models in Europe yesterday – it is about the VAT impact of various distribution scenarios in Europe.

Thank you to the 50+ VAT Blog readers that joined! The organizers, who typically cater to a New York and New Jersey crowd, were excited to see attendees from as far West as Seattle and as far East as Ukraine!

Please let me know if you would like me to talk you through the slides – I would be happy to set up another webcast if there is any interest.

Download (PDF, 6.8MB)

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VAT Control Framework

Richard Cornelisse writes the following:

“The added value of benchmarking the VAT function against best practices in the market is to gain objective evidence to what has already been achieved but also what still needs to be done to get there.

Our ‘free’ community Global Indirect Tax Management (GITM) website shares benchmark information about the effective management of VAT. It shows the area where risk based controls are to be expected and in addition shares templates and methods for self assessments purposes.

The article ‘Roadmap to Indirect Tax Function Effectiveness’ summarizes the GITM content:

  1. Why is management necessary and what needs to be done?
  2. How to realize objectives via best practice approaches, tools and methodology
  3. How to increase indirect tax function’s effectiveness
  4. Achieving stakeholder satisfaction
  5. Writing a business case / problem statement and calculate Return on Investment (ROI)

One of the chapters relate to non-routine business transactions such as ‘Migration to new jurisdiction‘,  ‘The Intersection of VAT and Shared Service Centers‘ , ‘Merger and Acquisition‘ and ‘Change of a company’s business model‘. Those significant transactions will always exceed the company’s risk appetite and these articles explain why, what and how it should be managed.

The following selection of articles supports overall effective VAT management: Company’s ‘governance’, ‘operation’ and ‘infrastructure’An Indirect Tax Strategic Plan: Approach and ScopeIndirect Tax TrendsVAT Control Framework.

All our ‘learning lab webcasts‘ are in English and contain subtitles in YouTube mode.”

All links are to Richard’s website.

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Sign up for tomorrow’s supply chain webcast!

If you have not done so yet, please make sure to register for Tuesday’s webcast. We will spend 45 minutes to an hour discussing various distribution models for sales into Europe. Focus is on tax and logistics.

I have copied the details below.

“Supply Chain Distribution Model: European Expansion” 

April 28, 2015
12 Noon – 1:30 pm Eastern Time

Presentation by:
Melissa Drew, Procurement Perspective
Matt Zangeneh, Director of Corporate Tax (US & Europe) Coach
Mark Houtzager, Tax Expert/Consultant

To register for this free webinar see here: http://ismny.com/news-events-details.php?id=37.

Email me please if the registration link no longer works.

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VAT in Puerto Rico: June 1?

The idea that April 1, 2015 would see a VAT in Puerto Rico did not materialize. More public discussion was needed and the government required more time for preparation. I wrote earlier about the introduction of VAT in Puerto Rico here: http://www.us-vat.com/blog/?p=935.

EY Puerto Rico now writes:

“Given the purported importance of the VAT to the Commonwealth’s finances and the urgent need to raise additional tax revenues, it is anticipated that a revised version of the bill will call for a phase-one implementation on 1 June 2015.”

For more information see the pdf linked here:

Download (PDF, 142KB)

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No more “First Sale” for EU customs valuation

The value of goods at the time of import is the key driver for the determination of the amount of VAT and customs duties payable.

According to Tradewin.net, the doctrine of the “first sale” means that the importer can declare the goods to Customs using the ‘first sale’, which is the transaction between the manufacturer and the middleman (vendor), which excludes the middleman’s markup, thereby lowering the customs value of the goods and the amount of duties payable.

In other words, First Sale for Export establishes the dutiable value based on the transaction between the manufacturer (factory) and the middleman (vendor) instead of between the middleman and the Importer.

See for more here: http://www.tradewin.net/services/duty-mitigation/what-is-first-sale.asp

Under new EU rules, only the sale that takes place immediately before the goods are physically brought into the territory will qualify.

My friends at PWC’s Customs team write:

“As a result, this interpretation will lead to the potential abolishment of the use of earlier or first sale whereby many EU importers for decades have been benefiting from basing the calculation of duty due on a sale that took place before the last sale upon which the goods entered the customs territory of the EU. However, based on this wording, if Customs were to take a restrictive reading and interpretation of the phrase “immediately before”, even instances where there is only one sale upon which the goods entered the customs territory of the EU, challenges could arise.”

They also note that rules are (still) very confusing. See for more information the pdf linked below:

Download (PDF, Unknown)

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GST on e-business sales to Australia

If you are selling downloads (movies, games, audio etc) to individuals in Australia, make sure to follow the new Budget in Australia which is due to be released on May 12. It may contain new rules for non-residents (read: US companies) to account for Australian GST on sales of downloads.

The GST rate there is currently a relatively ‘friendly’ 10%.

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In Nederland van 5 – 10 mei

A quick PSA for my Dutch readers:

Ik ben in Nederland van dinsdagochtend 5 tot en met zondagochtend 10 mei, voornamelijk voor client meetings in de Randstad.

Als het lukt met mijn schema, dan zou ik het leuk vinden om eens met VAT Blog lezers af te spreken – laat eens van je horen!

Mijn email is mark@us-vat.com.

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