The taxation of transactions in the digital economy has been the focus of much debate.
In a separate article in this edition of TaxWatch, Mat Scott reviews proposed measures in the United Kingdom (UK) to extend the scope of UK withholding tax to royalties related to the exploitation of intangible assets in the UK. These have been suggested, in part, in response to concerns that the UK is not collecting sufficient tax from transactions in the digital economy with UK consumers.
In respect of Value Added Tax (VAT), the debate within the European Union (EU) and elsewhere has focussed on who should be responsible for paying VAT on digital sales to EU based consumers and how that VAT should be collected.
In this article, David Duffy of KPMG’s indirect tax team takes a look at EU VAT measures agreed by Member States in December 2017, and taking effect partly in 2019 and partly in 2021, which will see significant changes to the payment and collection of VAT on sales in the digital economy to EU consumers.
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