INTERNATIONAL TAX PLAZA - OECD releases Discussion Drafts of 2 new elements of the OECD International VAT/GST Guidelines

(December 18, 2014)

On December 18, 2014 the OECD released discussion drafts of 2 new draft elements of the OECD International VAT/GST Guidelines. These discussion drafts relate to:

(i) The place of taxation of business-to-consumer supplies of services and intangibles (B2C Guidelines); and

(ii) Provisions to support the application of the Guidelines in practice (Supporting provisions).

The Committee on Fiscal Affairs (CFA) is developing International VAT/GST Guidelines (Guidelines) to address issues of double taxation and unintended non-taxation resulting from inconsistencies in the application of VAT to international trade. The first three chapters of these Guidelines were approved by the CFA in January 2014 and were endorsed as a global standard at the second meeting of the OECD Global Forum on VAT on 17-18 April 2014 in Tokyo.

The discussion draft of the B2C Guidelines presents a set of common principles for determining the place of taxation for B2C supplies of services and intangibles, in accordance with the destination principle. It also presents the recommended approach for collecting the VAT/GST on these supplies, focusing in particular on supplies by non-resident suppliers. The discussion draft recommends that non-resident suppliers be required to register and remit the VAT/GST in the jurisdiction of taxation and suggests that countries implement a simplified registration and compliance regime to facilitate compliance for non-resident suppliers. It presents the possible key features of such a simplified regime.

The draft Supporting provisions present approaches for facilitating the proper and consistent implementation of the principles of the Guidelines in national legislation, as well as their consistent interpretation by tax administrations.

The OECD invites interested parties to submit written comments by February 20, 2015. Comments should be sent by e-mail in Word format and should be addressed to Piet Battiau, Head of Consumption Taxes Unit, Centre for Tax Policy and Administration.

Furthermore the OECD informs the public that a public consultation meeting on the discussion draft will be held in Paris at the OECD Conference Centre on February 25, 2015.

Click here to be forwarded to the Discussion Draft as published on the website of the OECD, which will open in a new window.

For further information (e.g. the e-mail address where the comments should be sent) click here to be forwarded to the press release as issued by the OECD in this respect.