OECD: International standard, guidelines for VAT on cross-border sales

OECD: International standard, VAT on cross-border sales

The Organisation for Economic Cooperation and Development (OECD) on 6 November 2015, announced developments concerning the collection of consumption taxes on cross-border transactions in the jurisdiction where products are consumed.

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As noted in an OECD release, representatives of more than 100 countries and jurisdictions endorsed the new OECD International VAT/GST Guidelines as the preferred international standard for coherent and efficient application of value added tax (VAT) and goods and services tax (GST). 

The final package of OECD International VAT/GST Guidelines [PDF 3.84 MB] 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 OECD guidelines recommend:

  • 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
  • A mechanism for effective collection of VAT by tax authorities from foreign sellers

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