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OECD agrees international standard for VAT/GST collection on cross-border sales

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The OECD Global Forum on VAT has endorsed the final package of international VAT/GST (goods and services tax) guidelines, which include recommended rules for taxing cross-border supplies of services to private consumers in the country where the final consumer is located.

Representatives of more than 100 countries and jurisdictions agreed to endorse the new guidelines as the preferred international standard for efficient application of VAT/GST to international trade in services, in a decision made at the annual meeting of the Forum on 5–6 November, in Paris, France.

The final package includes recommended rules for the collection of VAT on cross-border services, including internet downloads, to private consumers (business to consumer, or B2C guidelines). The guidelines recommend that foreign sellers register and remit tax on sales of e-books, apps, music, videos and other digital goods in the jurisdiction where the final consumer is located; and include a recommended mechanism to ensure the effective collection of VAT by tax authorities from foreign sellers. ‘The effective and consistent implementation of the recommended approaches for collecting the VAT on these digital sales will help jurisdictions to protect their VAT revenues and level the playing field between domestic and foreign suppliers,’ said the OECD’s deputy secretary-general Rintaro Tamaki. ‘It is very encouraging to see that a number of jurisdictions have already implemented the rules and the mechanism recommended by these guidelines, or have expressed their intention to do so. They expect that these reforms will contribute considerable revenues to government budgets’. See

Issue: 1285
Categories: News