The provision of telecommunications, broadcasting and electronic services to consumers in Albania is subject to VAT in Albania. Foreign service providers are required to register for VAT. Article 29 of the VAT Law provides that the place of supply of these services is the place where the consumer has a permanent address of usually resides.
This applies to:
Section 39 of Finance Act 2020 extended the scope of VAT to include sales transactions carried out electronically.
Andorra imposes a general indirect tax (Impost General Indirecte) on digital services to consumers in Andorra or where the effective use or exploitation of the services is in Andorra. Under Article 43(3) of the General Indirect Tax Law, this applies to services provided electronically, including
Article 87 of Law 27,430 of December 29, 2017 expands the scope of Argentinian VAT to include digital services provided by non-residents where the effective use or exploitation of the service is in Argentina.
Digital services are defined in Article 88 of Law 27,430 as including:
Law No. HO-359-N of November 25, 2021 brings electronic services within the scope of Armenian VAT from January 1, 2022.
In particular it:
Schedule 2 of the Tax and Superannuation Laws Amendment (2016 Measures No. 1) Act 2016, amends the A New Tax System (Goods and Services Tax) Act 1999, to extend the scope of GST to non-resident suppliers of digital products and services, and it also requires them to register for GST.
Article 168.1.5 of the Azerbaijan Tax Code expands the place of supply rules to specifically provide for digital and e-commerce services. It provides that the place of supply is the location of the consumer where there is a provision of services by computer, internet and other electronic networks, e-mail and other similar means, or granting the right to use such networks or services.
Under Article 169.3 of the Tax Code, e-commerce supplies provided by a person not registered with the tax authority are subject to a VAT withholding by the Azerbaijan bank that makes the payment.
Article 2(3) of the Valued Added Tax Act, 2014, provides that the provision of e-commerce services by a person domiciled outside The Bahamas for the use, enjoyment, benefit or advantage of persons within The Bahamas is a taxable supply of services made within The Bahamas.
E-commerce is defined as business transactions taking place through the electronic transmission of data over communications networks such as the internet and includes:
The general provisions of the Bahrain VAT Law apply to non-resident e-commerce providers. Under Article 18 of the VAT Law, the place of supply of telecommunications services and electronic services is Bahrain, if they are used and enjoyed in Bahrain. Article 29(C) of the VAT Law requires a non-resident supplier to register for VAT irrespective of the value of their supplies.
Under VAT Public Clarification VAT/PC/20/3, issued on December 31, 2020:
Article 17 of the Value Added Tax and Supplementary Duty Act, 2012, provides that electronic services delivered to a person located in Bangladesh at the time of supply are treated as having Bangladesh as the place of supply for VAT purposes. As such a non-resident supplier of electronic services to non-VAT registered customers in Bangladesh would have to register for VAT.
Electronic Services are defined in Section 2(18) of the Value Added Tax and Supplementary Duty Act, 2012, as
Under Article 117 (1.4) of the Belarussian Tax Code, the place of supply of electronic services is the location of the consumer.
Electronic services are defined as:
Non-resident suppliers of electronic services are required to register and account for VAT.
Part 2 of the Budget Implementation Act, 2021, requires non-resident suppliers of digital products to register for and collect GST/HST on taxable sales to Canadian consumers if their taxable sales are above CAD 30,000 over a 12-month period.
Non-resident digital platform operators also have to register for and collect GST/HST on taxable sales of digital products or services made through their platforms.
Chapter VIII.I of the Act Respecting The Québec Sales Tax, requires certain nonresident suppliers to register and collect and remit QST applicable to taxable supplies of services or incorporeal movable property made to Québec consumers.
Effective April 1, 2021, Canadian sellers of goods and Canadian and foreign sellers of software and telecommunication services are required to register to collect PST if specified British Colombian revenues exceed $10,000.
Under Resolution No. 51 of October 19, 2018, non-residents providing digital services to consumers in Colombia are required to register and account for VAT.
Under Resolution 000049 of August 1, 2019, non-residents can opt for banks and other payments providers to withhold and account for VAT on the provision of digital services in Colombia, rather than them having an obligation to collect and account for VAT.
The Law on the Strengthening of Public Finances, 2018, introduced a new VAT system into Costa Rica. Article 1(2)(c) of the new VAT law specifically includes digital services as being within the scope of VAT.
Under Resolution No. DGT-R-13-2020 issued on June 12, 2020:
Article 7 of the Tax Annex to the 2022 Finance Law includes a number of provisions to widen the scope of the VAT to include online digital supplies by foreign residents and to ensure that they are required to register for VAT. In particular it expands Article 352 of the General Tax Code to provide place of supply rules such that
Public Ruling 24434 of July 19, 2021 provides that the tax on the transfer of industrialised goods and services is not levied on intangible digital assets (eg domain registrations, leasing of server space outside the Dominican Republic, file transfer services, email account services, and digital certificates) providing there is no transfer of tangible property.
Non residents supplying digital services to consumers in Ecuador are generally required to register and account for VAT in Ecuador. However, under Article 70 of the Internal Tax Regime Law, if the suppler is not VAT registered, and there is an intermediary, that intermediary is liable to account for VAT.
Under Article 147.1 of the Regulation of the Internal Tax Regime Law, if there is no intermediary and the suppler is not VAT registered, the importer is required to withhold and account for the VAT.
Resolution No: NAC-DGERCGC20-00000053 provides detailed guidance on the treatment of VAT on digital services.
A reduced 10% rate of VAT applies to sales of digital magazines and online publications. This is provided for by Instruction VH/1538/00.01.00/2019 of June 24, 2019.
Article 4 of Law No. 018/2021 of August 11, 2021 amends the VAT Law to extend the scope of VAT in Gabon to the sale of goods or provision of services through domestic or foreign marketplace platforms.
The provision of electronic services by a non-resident to a Georgian resident consumer is within the scope of Georgian VAT. Article 161 – 1 of the Tax Code, provides that the place of supply is the place where the consumer is based, has a permanent address or usually resides.
Section 16(1) of the VAT Act provides that an unregistered, non-resident person who provide telecommunication services or electronic commerce to persons for use or enjoyment in Ghana must register for VAT if that person makes taxable supplies exceeding one hundred and twenty thousand Ghana Cedis.
Electronic commerce” covers business transactions that take place through the electronic transmission of data over communications networks such as the internet.
A supply of telecommunication services and electronic commerce includes:
(i) website supply;
(iii) distance maintenance of programmes and equipment;
(iv) images, text and information and making databases available;
(v) music and games, games of chance and gambling games;
(vi) political, cultural artistic, sporting, scientific and entertainment broadcasts and events; and
(vii) distance teaching.
Under Article 5B of the VAT Law, a foreign resident, which provides electronic services to commercial enterprises in Iceland, can choose between general registration or simple registration. The latter does not permit input VAT recovery.
Under Section 24 of the Central Goods and Services Tax Act, 2017, electronic commerce operators and any person supplying online information and database access or retrieval services from a place outside India to anon-taxable person in India is required to register for VAT (irrespective of the value of their supplies).
An “electronic commerce operator” is any person who owns, operates or manages a digital or electronic facility or platform for electronic commerce.
Minister of Finance Regulation Number 48/PMK.03/2020 provides that on or after July 1, 2020, sales of digital goods and services from abroad to domestic consumers will be subject to VAT at the rate of 10%.
Law No. 382-VI “On Amendments and Additions to the Code of the Republic of Kazakhstan “On Taxes and Other Obligatory Payments to the Budget” introduces a Chapter 25 into the Tax Code with comprehensive changes to the Tax Code to ensure that foreign companies providing goods or services to residents are required to register and account for VAT.
Section 18 of Finance Act 2019, provides that sales through a digital market place are subject to Kenyan VAT.
A digital marketplace is defined as a platform that enables the direct interaction between buyers and sellers of goods and services through electronic means.
Section 23 of Finance Act 2021 expands Section 5 of the Value Added Tax Act, 2013 to specifically include supplies made over the internet or via an electronic network as within the scope of Kenyan VAT.
The new 2022 Tax Code includes provisions to ensure that foreign suppliers of digital services to consumers in Kyrgyzstan are subject to VAT.
In particular, Article 263(7) of the Tax Code provides that the place of supply is Kyrgyzstan if an individual is not registered as an entrepreneur and at least one of the following conditions are met:
The Laos Tax Department issued a notice requiring non-resident suppliers of digital services to register for VAT.
On February 22, 2022, the Tax Department issued Notification No. 0541/MOF. This requires non-residents supplying e-commerce and digital platform services to register for VAT if they have income from Laos users of more than LAK 400 million per year.
Article 70 of the Finance (Miscellaneous Provisions) Act 2020 inserts Article 14B into the Value Added Tax Act 1998, to provide for VAT on digital services provided by foreign service providers where the services are utilised in Mauritius.
A new Article 14A of the Value Added Tax Act 1998 applies VAT to services
Article 18-D of the VAT Law provides that non-residents with no permanent establishment in Mexico, who provide digital services to persons located in Mexico are required to register and account for VAT.
Article 12.2.9 of the First Resolution of Modifications to the Miscellaneous Tax Resolution for 2020 provides that intermediaries including digital platforms are required to withhold and account for VAT on behalf of the platform users.
Under Article 95(1)(d) of the Fiscal Code, a taxable supply for VAT purposes includes services provided through electronic networks including the internet, in an automated manner.
Under Article 95(1-1)(d) of the Fiscal Code, this specifically includes:
State Tax Service Order No. 539 of October 17, 2020 requires non-resident digital service providers to register electronically for VAT.
Under Article 479 of the Tax Code, taxable services include services provided by electronic means, including services provided by the Internet or by means of electronic networks, largely automated, and the nature of which depends essentially on the technology used, and which would be impossible to provide in the absence of a computer network.
Under Article 509 of the Tax Code, a non-resident supplier is required to register and account for general consumption tax on electronic services provided in New Caledonia.
The Taxation (Residential Land Withholding Tax, GST on Online Services, and Student Loans) Act 2016, amended the Goods and Services Tax Act 1985 to bring foreign digital service providers within the scope of New Zealand GST.
In particular Section 8 of the Goods and Services Tax Act (as amended) provides that taxable services include remote services supplied to a person resident in New Zealand, other than services that are physically performed in New Zealand by a person who is in New Zealand at the time the services are performed.
Remote services are defined in Section 2 of the Goods and Services Tax Act as a service that, at the time of the performance of the service, has no necessary connection between:
Under Article 51 of the Goods and Services Tax Act, a person is required to register and account for GST if their annual taxable sales exceed NZD 60,000.
Article 60C of the Goods and Services Tax Act includes provisions requiring non-resident marketplaces to register and account for GST.
Section 33 of Finance Act 2019 amended Section 2 of the Value Added Tax Act to expand the scope of VAT to include services (including digital services) provided to a person in Nigeria irrespective of whether the services are rendered within or outside Nigeria.
Section 3-1 of the Value Added Tax Act provides that taxable services include services provided electronically. In addition, the value of electronic services through an intermediary is deemed to arise to the seller and the intermediary.
Section 3-30 of the Value Added Tax Act states that in the case of electronic remote services the time of supply arises when the service is delivered to the recipient.
Under Article 2-1(3) of the Value Added Tax Act, non-resident suppliers of electronic services are required to register irrespective of the level of their turnover.
Royal Decree 121/2020 promulgating the VAT Law provides for a VAT regime in Oman which includes non-resident suppliers of electronic services. Under Article 24 of the VAT Law, the place of supply of electronically supplied services is the place of actual use or benefit of the services. A non-resident is required to register under Article 55 of the VAT Law.
Section 5 of Finance Act 2021 requires an online marketplace to withhold sales tax at a 2% rate.
An online marketplace is defined in section 2(18A) of the Sales Tax Act as an electronic interface such as a marketplace, e-commerce platform, portal or similar means which facilitate the sale of goods, including a third-party sale, in any of the following ways:
With effect from January 1, 2023, GST applies to remote services including digital services provided in Palau.
Section 1234(a) of the Palau National Code provides that the place of supply of remote services is Palau if they are provided to a person who is not GST registered in Palau.
Under Section 1234(c) of the Palau National Code a recipient of a supply of remote services is treated as a resident in Palau if at least two of the following factors indicate Palau:
General Resolution 76-20 published on December 28, 2020, provides for a VAT withholding regime for residents receiving digital services from a foreign supplier.
Digital services are defined in Article 1(h) of General Resolution 76-20 as services that are made available to the user through the internet or any adaptation or application of the protocols, platforms or technology used by the internet or any other network through which services are provided through access online and characterized by being essentially automatic and not feasible in the absence of information technology.
Under Article 12 of General Resolution 76-20, this includes:
In general, under Article 5 of General Resolution 76-20, banks and other financial institutions that facilitate payment are required to withhold and account for the VAT.
Federal Law No. 244-FZ of July 3, 2016 introduced a number of changes to the Tax Code to provide VAT on foreign electronic services.
Article 174.2(3) of the Tax Code provides that foreign organizations providing electronic services with a place of supply in Russia are required to register and account for VAT on those supplies.
Under Article 174.2(1) of the Tax Code, electronic services are defined as services provided through an information and telecommunications network, including the internet, that are automated. This includes:
Article 148 of the Tax Code provides that the place of supply of electronic services is Russia if at least one of the following conditions is met:
Article 5 of the VAT Implementing Regulations provides that a non-resident making taxable supplies in Saudi Arabia is required to register for VAT irrespective of the value of their taxable supplies. This includes the provision of electronic services to Saudi residents.
Article 24(1) of the VAT Implementing Regulations defines electronic services as:
Under Article 24(2) of the VAT Implementing Regulations where electronic services are accessed via a wifi hotspot, an internet cafe, restaurant or hotel lobby, the place of supply is that location. In other cases, Article 24(3) of the VAT Implementing Regulationsprovides that the place of supply is where the usual place of residence of the consumer is.
This is based on:
Section 29 of Finance Act 2021 expands the scope of a taxable supply in Section 8 of the Goods and Services Tax Act to include digital market supplies or digital services supplied through a digital marketplace that includes:
Under Section 25(d) of The Goods and Services Tax (Amendment) Act 2021, remote services are defined as any services where, at the time of the performance of the services, there is no necessary connection between:
but does not include:
A foreign supplier of remote services to a consumer is required to register and account for GST if their gross receipts exceed SGD 1,000,000 and they make sales to customers in Singapore exceeding SGD 100,000, under Section 23 of The Goods and Services Tax (Amendment) Act 2021.
Foreign Electronic Service Entities are required to register for VAT in South Africa where the total value of electronic services supplied in SA exceeded R1 million under Section 23(1A) of the VAT Act.
Government Notice 429 of 18 March 2019 provides that electronic services are services supplied by means of an electronic agent, electronic communication or the Internet for any consideration, other than:
– both those companies form part of the same group of companies; and
– the company that is not a resident of South Africa itself supplies those services exclusively for the purposes of consumption of those services by the company that is a resident of South Africa.
Article 6 of the Value-Added and Non-Value Added Business Tax Law provides that foreign enterprises that do not have a fixed place of business within Taiwan that supply electronic services to individuals are taxable persons for business tax purposes.
The Business Tax and Income Tax Regulations for Internet Transactions provide that suppliers of electronic services and goods online are required to register and account for business tax under Article 35 of the Value-Added and Non-Value Added Business Tax Law (subject to a 40,000 or 80,000 yuan monthly threshold).
Article 279(1) of the Tax Code states that the tax authority may require a foreign supplier with no permanent establishment in Tajikstan to appoint a tax representative. The representative would be liable for VAT registration and the reporting and payment of VAT.
The standard provisions of the Value Added Tax Act apply to the supply of electronic services. As such, foreign suppliers of electronic services that have a place of supply in Tanzania are required to register for VAT under Section 28 of the Value Added Tax Act and file VAT returns under Section 66 of the Value Added Tax Act.
Section 51(1) of the Value Added Tax Act provides that the place of supply of electronic services delivered to a person who is in Tanzania at the time when the service is delivered is Tanzania provided the recipient is not a taxable person.
Electronic services are defined in Section 52(2) of the Value Added Tax Act and include:
Thailand enacted the Act on the Amendment to the Revenue Code (No. 53) B.E. 2564 (2021) on February 10, 2021, to bring foreign suppliers of digital services within the scope of VAT.
Section 6 of Act on the Amendment to the Revenue Code amends Section 82/13 of the Revenue Code and requires non-resident suppliers of electronic services to register and pay VAT from September 1, 2021, provided their annual income derived from electronic services provided to non-taxable persons in Thailand exceeds 1.8 million baht. This also applies to electronic platforms that provide electronic services to non-taxable individuals in Thailand.
Section 6 of the Act on the Amendment to the Revenue Code adds Section 77/1 (10/1) to the Revenue Code and defines “electronic services” as services which include intangible assets that are delivered through the internet or any other electronic network where the nature of the service is automated and it could not be performed in the absence of such technology.
Article 188.8.131.52.2 of the Value Added Tax General Practice Communique (as amended by General Communiqué No. 17 on the Value Added Tax Law of January 31, 2018) provides that foreign suppliers with no establishment within Turkey who supply electronic services to non-taxable persons in Turkey are required to register and account for VAT on their supplies.
In Uganda, a taxable supply of services includes electronic services provided by a non-resident supplier. Section 16(2) of the Value Added Tax Act provides that the place of supply of electronic services is Uganda if the services are delivered to a non-taxable person in Uganda at the time of supply.
Section 16(5) of the Value Added Tax Act defines electronic services as the following when provided or delivered remotely:
Section 31A(1a) of the Value Added Tax Act provides that a VAT return must be submitted within fifteen days after the end of three consecutive calendar months (unlike most other supplies which have a monthly tax period).
Law No. 1525-IX of March 6, 2021, made a number of changes to the Tax Code to apply VAT to electronic services provided by foreign digital service providers.
Section 1(1)(1) of Law No. 1525-IX amends Section 14.1.139 of the Tax Code to expand the scope of taxable persons to include non-residents with no permanent establishment in Ukraine who provide electronic services to non-taxable individuals in Ukraine.
Article 14.1.56 of the Tax Code defines electronic services as services that are automatically provided via the internet with the help of information technologies and mainly without human intervention. This includes:
Section 1(17) of Law No. 1525-IX (which amends Article 208 of the Tax Code) states that a non-resident digital service provider is required to register for VAT if the turnover from electronic services in the previous calendar year exceeds 1,000,000 hryvnias.
Article 31 of Federal Decree-Law No. (8) of 2017 on Value Added Tax provides that the place of supply of electronic services is the UAE to the extent the services are used and enjoyed in the UAE, regardless of the place of contract or payment.
Electronic services are defined in Article 23(2) of the Executive Regulation of the Federal Decree-Law No. 8 as services which are automatically delivered over the internet, or an electronic network, or an electronic marketplace, including:
Non-resident digital service providers are required to register for VAT under Article 7 of the Executive Regulation of the Federal Decree-Law No. 8.
Section 14 of VAT Notice 741A provides that the place of supply of electronically supplied telecommunications and broadcasting services is where the consumer is located.
Electronically supplied services are defined in HMRC guidance as services which are automatically delivered over the internet, or an electronic network, where there’s minimal or no human intervention. This can include
The HMRC guidance relies on a number of presumptions to determine where the consumer is located for determining the place of supply. These include supplies made
The treatment of digital services provided by a foreign supplier depends on the specific state the services are provided in. If the supplies meet the state registration threshold the supplier is required to register and collect sales and use tax.
Article 26-BIS of Decree No. 220/998 of August 20, 1998 (as inserted by Article 5 of Decree No. 144/018 of May 29, 2018), provides that services provided through computerized means, such as the internet, technological platforms, computer applications, or similar are considered to have Uruguay as the place of supply where they are economically consumed or used in Uruguay.
Under Article 26-TER of Decree No. 220/998 of August 20, 1998 (as inserted by Article 5 of Decree No. 144/018 of May 29, 2018) mediation and intermediation activities carried out through computerized means including through the internet, technological platforms, computer applications, or similar, in order to intervene directly or indirectly in the supply or demand of the provision of services are treated as having the place of supply in Uruguay providing both the supplier and consumer are located in Uruguay. Where the supplier is non-resident, only 50% of the value of the supply is deemed to take place in Uruguay.
Article 237 of the Tax Code provides that taxable persons include foreign legal entities which sell goods or services in Uzbekistan, where Uzbekistan is the place of supply.
Under Article 241(10) of the Tax Code, the place of supply of electronic services provided by a non-resident supplier to a non-taxable individual is Uzbekistan if one the following conditions applies:
Article 282 of the Tax Code defines electronic services as services which are provided by a data network, including the internet on an automated basis. It specifically includes:
Under Article 279 of the Tax Code, foreign suppliers of digital services are required to register for VAT within 30 days of first providing digital services in Uzbekistan.
Chapter IX of Circular 80/2021/TT-BTC of September 29, 2021, requires a foreign supplier of digital-based activities to Vietnamese recipients to register and account for VAT on their supplies to non-taxable persons.
Article 77(3) of Circular 80/2021/TT-BTC states that in order to determine the revenue sourced from Vietnam, the following should be considered:
Digital-based business activities are defined in Article 3 of Circular 80/2021/TT-BTC as business activities of business entities conducted via an intermediary digital system to connect with customers where activities take place within a digital environment.
The VAT rate is provided in Article 8(2)(b) of Circular 09/2013/ND-CP of December 18, 2013, as:
– Distribution and supply of goods: 1%;
– Services, construction excluding raw materials: 5%;
– Production, transportation, services associated with goods, construction including raw materials: 3%;
– Other business activities: 2%.
It provides that with effect from January 1, 2020 the supply of radio and television services from outside Zimbabwe to an address in Zimbabwe or of electronic services by an electronic commerce operator domiciled outside Zimbabwe to a person resident in Zimbabwe is deemed to be a supply made in Zimbabwe.
As such a foreign supplier of digital services to recipients in Zimbabwe would be required to register and account for VAT under Section 23 of the Value Added Tax Act, where the registration threshold is met.
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