International Financial Law Prof Blog

Editor: William Byrnes
Texas A&M University
School of Law

Thursday, November 19, 2015

OECD delivers international standard for collection of VAT on cross-border sales

Governments have taken an important step towards ensuring that consumption taxes on cross-border transactions are OECDeffectively paid in the jurisdiction where products are consumed, while minimising the risks that uncoordinated tax rules distort international trade.

The decision by representatives of more than 100 countries and jurisdictions to endorse the new OECD International VAT/GST Guidelines as the preferred international standard for coherent and efficient application of Value Added Tax/Goods and Services Tax to the international trade in services was one of the highlights of the annual meeting of the OECD Global Forum on VAT on 5-6 November, in Paris, France. See Statement of Outcomes.

This final package of OECD International VAT/GST Guidelines 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. The Guidelines also include a recommended mechanism to ensure the effective collection of VAT by tax authorities from foreign sellers, thus helping governments to protect VAT revenues and levelling the playing field between domestic and foreign suppliers.

»Read more

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In-depth discussions took place this week as the international community continues to make progress on the international tax agenda. Officials from more than 100 countries drawing from tax authorities, ministries of finance, development agencies, as well as regional and internati

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