Ethiopia
During September 2024, the Federal Democratic Republic of Ethiopia introduced VAT on the sale of digital services by non-resident providers to local consumers. This was confirmed within VAT Proclamation 1341/2024.
Previously, foreign businesses providing digital services to consumers in Ethiopia did not have to charge VAT on their sales. However, to remove the unfair advantage that this gave non-resident companies over resident providers, the Ethiopian government introduced VAT at 15% on these types of transactions.
Non-resident digital service providers will be required to register for VAT if they exceed an annual threshold of ETB 2 million (approx. £12,200).
Peru
From 1 October 2024, the Peruvian tax authority will introduce VAT at 18% on the sale of digital services by non-resident providers to local consumers.
Peru is introducing the new tax to remove the unfair advantage that non-resident companies have over resident suppliers who must charge VAT on their sales.
Non-resident providers will have to VAT register from the first sale they make as there is no VAT registration threshold and if they fail to register, payment facilitators such as banks or credit card companies will become responsible for withholding the VAT on payments received from the consumers.
This will apply to many services including software, access to social networks, streaming or downloading of media, digital newspapers and magazines, advertising, online auctions, access to websites, and interactive training.
The above news was kindly provided by Fiscal Solutions (UK), www.fiscalsolutions.co.uk; contact: [email protected].
