From 1 July 2019, Bangladesh introduced a new VAT regime in the country, with a standard rate of 15%…
Bangladesh
From 1 July 2019, Bangladesh introduced a new VAT regime in the country, with a standard rate of 15%.
With this change, VAT is also chargeable on sales of e-services made by non-resident suppliers. Previously, there was no VAT regime in the country so foreign businesses providing digital services did not have to charge VAT on their supplies. However, this recent change has meant that VAT at 15% is also now to be charged on these types of transactions.
This new tax applies to a range of electronic services including streaming games, music, apps, films, e-books, e-journals and internet services.
Indonesia
A VAT bill is currently being reviewed by the Indonesian government that will introduce VAT at 10% on all e-commerce goods and service transactions made by non-resident companies.
At present, non-resident businesses providing e-commerce supplies to Indonesia do not have to charge VAT on their sales. However, in an effort to remove the unfair advantage that this gives to non-resident companies over Indonesian resident providers, the Indonesian government are planning to introduce VAT at 10% on these types of transactions.
If introduced the new tax will be charged and collected by the non-resident suppliers, who will likely have to register for VAT in the country.
New Zealand
The New Zealand government has announced that the introduction of the new legislation, to make changes to the Goods and Services Tax (GST) rules that apply to low value imports made by non- resident businesses shipping to consumers in the country, is postponed from 1 October 2019 to 1 December 2019.
Currently, the low value threshold allows all importers to purchase goods from non-resident companies without paying any GST or duties where:
✓ The combined value of duty, excise and GST calculated on the goods totals NZ$60 or less. ✓ The goods have no duty applicable and are valued up to an amount of NZ$400.00
In order to remove the unfair advantage that this gives to non-resident sellers over resident businesses, the NZ government will make these businesses GST register if their low value import sales sold to non-GST registered businesses, reach the registration threshold of NZ$60,000 in a year.
This follows Australia who introduced similar GST rule changes on 1 July 2018.
Russia
From 1 January 2019, Russia has amended its current VAT legislation to state that non-resident businesses selling digital services to businesses in Russia have to VAT register and charge VAT on their supplies.
However, the Russian tax authorities have now confirmed that business customers in the transaction can withhold the VAT payments and submit this to the tax authorities directly. This will mean that the supplier will not need to receive and remit the VAT payments to the tax authorities, but they must still remain VAT registered and submit VAT returns.
This VAT treatment applies to a range of electronic services including streaming games, music, apps, films, e-books, e-journals and internet services.
Uzbekistan
The Uzbekistan tax authority has recently confirmed that local VAT will be applicable on the sale of e-services to consumers by non-resident businesses.
At present, non-resident businesses providing digital services in Uzbekistan do not have to charge VAT on their sales. However, in an effort to remove the unfair advantage that this gives to non- resident companies over Uzbekistan resident providers, the Uzbekistan tax authorities have now confirmed that VAT at 20% will be applied on these types of transactions from 1 January 2020.
This new tax will be applied to a range of electronic services including streaming games, music, apps, films, e-books, e-journals and internet services.
Vietnam
From 1 July 2020, Vietnam will extend VAT to non-resident e-commerce sales to consumers. This will apply to both sales of goods and digital services.
When introduced the new tax will be collected via banks and credit card companies based in the country when payment is received from their customer, and they will then be responsible for paying this over to the Vietnam tax authorities.
The non-resident sellers will still have a requirement to VAT register in order to report these transactions in the country.
The above information was kindly provided by Fiscal Solutions (UK), www.fiscalsolutions.co.uk; contact: [email protected].
