VAT updates on digital services
VAT News Updates
14 July 2020: Mauritius and Thailand are the latest countries to announce VAT on digital services.
Digital services (telecommunication, broadcasting and electronic services) are subject to different VAT rules. The Organisation for Economic Co-Operation and Development (OECD) states that: “For consumption purposes internationally traded services and intangibles should be taxed according to the rules of the jurisdiction of consumption.”
Numerous tax jurisdictions are taking their lead from the OECD recommended approaches to taxing the digital economy. The latest countries to offer guidance are Mauritius and Thailand.
The Republic of Mauritius announced its budget for 2020-2021 in early June 2020.
It was mentioned that VAT would be introduced on digital and electronic services provided by non-residents.
The current VAT rate in Mauritius is 15%.
On 9 June 2020, Thailand approved a draft bill that will require VAT to be paid on foreign digital and electronic services provided in Thailand.
A 7% VAT will be applied to sales relating to non-resident companies that earn over 1.8 million baht per year from providing digital services in the country.
This new VAT rate will apply to services including:
- Video streaming
- Music streaming
- Media apps
It is estimated that this new measure could raise 3 billion baht for the Revenue Department.
See more Taxback International Articles
Mexico: Digital Services
30th March 2020: From 1 June 2020, Mexico plan to collect VAT at a rate of 16% on the sale of certain goods and services to cover digital services providers.
VAT on digital services update.
10th January 2020: Ecuador & Paraguay have imposed VAT on non-resident sales of digital & electronic services to consumers in their countries.
Tax authorities globally continue to update e-invoicing requirements.
8th May 2020: Denmark, Finland, Italy, Turkey and Vietnam issue changes to e-invoicing requirements.