Moscow enacted a law ordering certain foreign companies engaged in online sales of electronic content in Russia to pay the value-added tax (VAT). (Foreign providers of electronically supplied services.)
The law, informally known as the “Google Tax,” stipulates the introduction of an 18% VAT for foreign companies providing services to Russians in electronic form. Foreign companies will need to register on the Russian tax service’s special electronic index and pay taxes on an equal footing with Russian companies operating in the same market segment. Before the law was passed by the Russian Parliament, no VAT was imposed on electronic services supplied by foreign companies. This tax break wasn’t available to Russian companies.
If a foreign company has a Russian division or a contractor in the country, it will be responsible for paying the tax irrespective of whether it has an appropriate agreement with foreign corporations or not.
If the buyer carries out activities on the territory of the Russian Federation and acquires the “services in electronic form,” the place of supply of these services is the territory of the Russian Federation. Delivery of physical goods ordered over the internet is not subject to the VAT. (more…)
Her Majesty’s Revenue and Customs (HMRC) warned in a tax guidance that overseas online retailers must pay VAT on items sold in the UK.
The tax agency said VAT liability applies to overseas sellers supplying goods already in the UK at the point of sale to consumers through an online marketplace. It also applies to:
- UK VAT representatives for overseas sellers, and
- Online marketplaces allowing sales by overseas sellers.
By Guest Writer: Andy Dawnbarn, Wilkins Kennedy LLP
Andy Dawbarn is partner at Wilkins Kennedy (WK) in the UK. WK is one of the largest accounting and consulting firms in the UK and a new member of Allinial Global. Andy specializes in Value Added Taxes (VAT) having spent over 30 years in VAT, including HM Customs and Excise.
As Britain is left waiting to see what the future holds as an independent nation, many businesses will be asking questions about what to expect following the Brexit result and key timings as to when those changes will be taking place. VAT is one area where the UK could see more significant changes after leaving the EU and out of all the taxes is likely to be the most affected. (more…)
China plans to apply its value added tax (VAT) to all industries starting May 1.
The VAT will replace the business tax and apply to the industries that were previously subject to that tax, including the construction, real estate, and finance and consumer services industries. China will be among the first countries in the world to apply the VAT broadly to the financial services industry.
The replacement of the business tax with the VAT will ensure that the indirect tax burdens on all industries in China are reduced, said Premier Li Keqiang in a government work report to the national legislature. (more…)