Indirect Tax News: Issue 3 - October 2021

In the world of indirect taxes, the topic of e-commerce is still popular. Thailand is now the fourth country in Southeast Asia to introduce VAT on electronic services, having done so after Indonesia, Malaysia and Singapore. Other countries, including Saudi Arabia, have provided further guidance on how to treat e-commerce transactions for VAT or GST purposes. In the EU, the European Court of Justice issued an important ruling in the Titanium case, in which the Court ruled that there is no fixed establishment for VAT purposes when there is no staff present in the country where an immovable property is leased to a lessee.

In other news, the UK introduced significant changes to the way that VAT is collected in the construction industry on 1 March 2021. As from that date, VAT-registered recipients of specific types of building and construction services—rather than the suppliers—are required to pay the VAT due on the supply directly to the UK tax authorities (HMRC) under a domestic reverse charge mechanism.

Finally, Poland would like to make the formation of VAT groups possible starting in 2022. Under the proposed VAT group rules, intragroup transactions would not be taxed, and a group would be able to report VAT by filing a single return. 

Content adapted from BDO Global.

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