Taxamo presentation to OECD meeting in Paris - February, 25, 2015
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On Wednesday, February 25, 2015, Taxamo was invited to make a presentation to the OECD Public Consultation meeting on VAT/GST guidelines. Here's our presentation outlining the invaluable knowledge we have gained since the introduction of the 2015 EU VAT rules on the B2C supply of digital services within the EU.
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Taxamo presentation to OECD meeting in Paris - February, 25, 2015
- 1. Session 3 Business-to-consumer supplies of services and intangibles – VAT collection” OECD HQ Paris February 25, 2015 Presentation by John McCarthy, Taxamo
- 3. ABOUT TAXAMO • Taxamo is a SaaS solution for the 2015 EU VAT change • In development 2 years – custom built around the EU VAT Regulation • Large number of EU and non-EU merchants • Firsthand experience working with large, medium and small merchants looking to implement a practical solution • Launched Jan 1
- 4. FEEDBACK FROM EU LAUNCH 1. Lack of awareness – poor communication to e-service merchants prior to January 1 2. Businesses confused by threat of foreign enforcement 3. Additional difficulties for sellers operating in multiple global regions
- 5. 1. POOR COMMUNICATION • Tax Authorities charged with communicating merchant • Many merchants not aware Recommend: Work with key stakeholders who communicate to merchants - PSPs, E-Commerce Platforms and Shopping Carts are the key stakeholders to enable compliance. Future launch plans should include meeting with these stakeholders well ahead of time.
- 6. 2. CONFUSION OVER FOREIGN ENFORCEMENT • Unclear guidelines around enforcement of rules by member states • Unaware of the cost and penalties for non-compliance Recommend: Authorities must be responsible for ensuring that e-service merchants submit domestic VAT returns and that they have properly captured all required customer evidence. Consistent approach to tax information services & tax collection is required by all adopters.
- 7. 3. DIFFICULTY COMPLYING • Nature of digital space means that “businesses faced with obligations in multiple jurisdictions” 3.29 will apply to a majority of e-service merchants Taxamo’s small EU merchants (less than €5,000 p/m) have recorded sales to customers in 108 different countries in January.
- 8. PROBLEM ISN’T THAT VAT RETURNS ARE COMPLICATED … PROBLEM IS FILLING AND SETTLING MANY VAT RETURNS THEREFORE…
- 9. Taxamo sees most consumer traffic from: US UK Canada Germany Australia Netherlands France India Brazil Spain Italy Sweden
- 10. International MOSS Single registration, filing and settlement Third Party Service Providers Learn from US Streamlined Sales Tax Project with policy for Certified Service Providers who can also settle merchant tax obligation OPTIONS
- 11. RECAP • MAJORITY OF MERCHANTS HAVE MULTI-JURISDICTION SALES • EVEN A ‘SIMPLE’ REGISTRATION AND REPORTING STRUCTURE WILL RESULT IN ADMINISTRATIVE BURDEN FOR MERCHANTS • POTENTIAL MEASURE TO EASE THIS BURDEN: • INTERNATIONAL MOSS • THIRD PARTY PROVIDERS
- 12. Thank you
Editor's Notes
- 1.IP BIN of CC, Billing address (only UK) Do you always prompt for User declaration or wait until you cannot collect enough evidence 2. At what stage in the checkout process do you collect the proxies – and if you need more when do you ask you consumer? Do you collect evidence at the payment page? Do you stage the transaction at the payment page? 3. What proxy to default to? How do you manage an audit from another tax authority? Should you put a contingency in your accounts for non compliant transactions Austria? The letter of the law says one thing - is that what you need to abide by? The Law is the regulations that were passed – not the Explanatory Notes. We have heard in various EU conferences again and again that the explanatory notes are not legally binding. Some countries may interpret the rules differently to how the explanatory notes interprets them. There are use cases in the explanatory notes which you can code to however some country may view that as being uncompliant. Is it likely? Not sure – was at a conference where Austria said they were 99% behind notes – did not specify which bits they weren’t happy with.