BDO Indirect Tax News - Issue 1/2023

Welcome to 2023! The first issue of Indirect Tax News for 2023 includes a chart highlighting VAT/GST changes around the globe that apply as from 1 January. Our second feature article looks at the European Commission’s extensive proposals to modernise the EU VAT rules, including the introduction of mandatory electronic invoicing, a shift to the real-time sharing of transaction-based data, an extension of the “deemed supplier” rule and single VAT registration.  

The application of sales tax to digital supplies of goods, services and intangibles has become increasingly complex in recent years, and online gaming activities are no exception. The explosive growth in this sector is attracting attention beyond just players—governments, regulators and tax authorities are all looking at the industry. Two articles—one from Canada and the other from the U.S.— encapsulate some of the challenges faced by taxpayers in the online gaming industry in terms of activities that are subject to sales tax, how the tax is calculated and who is required to collect the tax. 

The EU payment services directive—which will introduce recordkeeping and reporting requirements to prevent VAT fraud starting on 1 January 2024—will require payment services providers to keep electronic records of data on cross-border payments and to share the records with the tax authorities throughout the EU, via a newly created central EU database. The Netherlands has released draft legislation to transpose the directive into its domestic law and the Slovak Republic has implemented the rules. 

Spain and the Slovak Republic have been tinkering with their VAT rules, including the bad debt relief rules. Norway has extended the scope of its VAT regime to apply to all “remotely deliverable services” from abroad to consumers in the Norwegian VAT area (rather than just remotely deliverable electronic services to consumers). In the Middle East, the Oman tax authorities are starting to review VAT returns and requiring some taxpayers to complete a “checklist” when filing returns and the UAE authorities have issued useful guidance on VAT, including how the statute of limitations will be applied. 

VAT/GST exemptions have been clarified/announced in Indonesia and Singapore, respectively. A new Indonesian regulation provides details and guidance on the VAT exemption for the mining and drilling industry and the issuance, transfer or sale of carbon credits is no longer treated as a supply of goods or services for Singapore GST purposes. 

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Read these articles and much more in the January 2023 issue of Indirect Tax News

Content adapted from BDO Global.