Recently, The Organization for Economic Co-Operation and Development publish their latest global VAT and GST Guidelines which emanates from the OECD’s Committee on Fiscal Affairs. They also and sets the consumption tax model for countries around the world to adopt to ensure tax stability and fair-mindedness.
VAT on goods:
The guidelines will repeat much of the basic principles for VAT/GST on goods which are well prepared in the European Union and somewhere else. This will include:
- A broad based tax on the final consumer; staged collections of VAT by companies, supporting the neutrality principle (including: sound tax administration; reciprocity between countries on VAT recovery).
- Taxation at the point of consumption – the destination principle – so that exports are VAT free
- VAT on services and intangibles to Multiple Location Entities – not so easy.
Most of the new review will be concerned with the treatment of VAT on international services and intellectual property. The increasingly complex supply of services across borders makes it more challenging to understand the supplier and final consumer.
