In September 2018, Indian authorities ruled that a certain local supplier was providing marketing, sales-promotion and post-sales support services that could not be considered passive marketing activities. Many corporate groups doing business in India will need to reevaluate their indirect tax positions in light of the recent ruling.
The EU is undertaking one of the most substantial reforms of its VAT system since the single market was created in 1993. Here’s a summary of what multinationals should know about the changes.
The six countries that comprise the Gulf Cooperation Council will implement a value added tax in 2018. Businesses operating in the Gulf region need to be aware of how the new VAT will affect their operations.
Tax authorities around the world continue to change VAT rules to capture revenues from the e-commerce sector. The new rules are designed to level the playing field between international and domestic operators while (authorities hope) unlocking a gold mine of tax revenue.
India recently voted to replace its labyrinthine federal and state taxes with a single tax on goods and services.The implementation of the new GST regime will require businesses operating in India to overhaul their current indirect tax processes. Most companies have not yet prepared for the tax.
The ad hoc development of e-commerce policies for value-added taxes (“VAT”) has resulted in a hodgepodge of inconsistent tax regulations that vary widely by country. Recognizing the growing importance of e-commerce, the confusion resulting from current systems, and the magnitude of frequently forgone VAT revenue, many countries as well as the Organization for Economic Cooperation and Development (“OECD”) have set out to clarify, systematize and coordinate VAT regulations. These changes, many of which have been or are being implemented in 2015, have significant implications for businesses with e-commerce operations. Understanding and complying with these VAT laws is important to success in international e-commerce.
Effective January 1, 2015, France now permits an optional value-added tax (“VAT”) reverse charge procedure. The announcement follows the successful implementation of the procedure in the Netherlands and Belgium, both of which have enjoyed greater levels of trade.
Nearly all countries charge some type of indirect tax on the local sale of goods or services. Understanding your company’s obligations and liabilities with regard to indirect taxation and devising effective tax compliance and mitigation strategies is an important ingredient in the success of an overseas endeavor.