On April 12, 2017 the OECD released its International VAT/GST Guidelines. According to the OECD these International VAT/GST Guidelines (“the Guidelines”) set forth internationally agreed principles and standards for the value added tax (VAT) treatment of the most common types of international transactions, with a particular focus on trade in services and intangibles. The aim of the Guidelines is to minimize inconsistencies in the application of VAT in a cross-border context with a view to reducing uncertainty and risks of double taxation and unintended non-taxation in international trade. The Guidelines also include the recommended principles and mechanisms to address the challenges for the collection of VAT on crossborder sales of digital products that had been identified in the context of the OECD/G20 Project on Base and Erosion and Profit Shifting (the BEPS Project).
The Guidelines build on international dialogue among OECD Members and partner countries and other relevant stakeholders, including academia and private institutions.
The Guidelines address a.o. the following subjects:
· Preface
o The International VAT/GST Guidelines: Aim and status
o Development process of the International VAT/GST Guidelines
· Chapter 1. Core features of value added taxes
o Overarching purpose of a VAT: A broad-based tax on final consumption
o The central design feature of a VAT: Staged collection process
o VAT and international trade: The destination principle
o Application of generally accepted principles of tax policy to VAT: The Ottawa Taxation Framework Conditions
· Chapter 2. Neutrality of value added taxes in the context of cross-border trade
o Introduction
o Basic neutrality principles
o Neutrality in international trade
o Applying the VAT neutrality principles in the context of cross-border trade: Commentary on the Guidelines on neutrality
· Chapter 3. Determining the place of taxation for cross-border supplies of services and intangibles
o The destination principle
o Business-to-business supplies – The general rule
o Business-to-consumer supplies – The general rules
o Business-to-business and business-to-consumer supplies – Specific rules
· Chapter 4. Supporting the Guidelines in practice mutual co-operation, dispute minimisation, and application in cases of evasion and avoidance
o Introduction
o Mutual co-operation, exchange of information, and other arrangements allowing tax administrations to communicate and work together
o Taxpayer services
o Application of the Guidelines in cases of evasion and avoidance
Furthermore the VAT Guidelines contain a appendix titled: “Recommendation of the Council on the application of value added tax/goods and services tax to the international trade in services and intangibles as approved on 27 September 2016 [C(2016)120]”
Click here to be forwarded to the website of the OECD, which contains links to the International VAT/GST Guidelines as released on April 12, 2017. The guidelines are available in English, French and German.
Copyright – internationaltaxplaza.info
Stay informed: Subscribe to International Tax Plaza’s Newsletter! It’s completely FREE OF CHARGE!
and
Follow International Tax Plaza on Twitter (@IntTaxPlaza)
