22/03/2019 – Delegates from over 100 jurisdictions, including regional and international organisations, have unanimously endorsed new rules that will ensure the collection of additional VAT/GST revenues and will level the playing field between operators in traditional and online markets.
Meeting in Melbourne, Australia on 20-22 March 2019, around 300 participants attending the Global Forum on VAT, welcomed measures proposed in a new report by the OECD on The Role of Digital Platforms in the Collection of VAT/GST on Online Sales. The report includes new measures to make e-commerce marketplaces liable for the VAT/GST on sales made by online traders through their platforms. Other measures include data sharing and enhanced co-operation between tax authorities and online marketplaces.
“These new measures provide governments with the tools needed to ensure that online platforms play their part in the collection of VAT/GST. They will also level the playing field for those on our high streets and in our malls, who have had to compete against online competitors enjoying a tax advantage”, said David Bradbury, the Head of Tax Policy at the OECD.
The importance of these measures is underlined by OECD analysis, which shows that two-thirds of all cross-border e-commerce sales of goods are made via online marketplaces. Enlisting these online marketplaces to ensure that VAT/GST is paid by making them liable and through data sharing, will allow tax authorities to focus their compliance efforts on the relatively small number of marketplaces rather than on the millions of small traders operating through them.
This new Report builds on the solutions for the effective collection of VAT on digital sales included in the 2015 BEPS Action 1 Report on the Tax Challenges of the Digital Economy. At this week’s meeting, jurisdictions overwhelmingly reported positive results from the implementation of these measures.
Over its three days, the fifth Global Forum meeting, which was co-hosted by the OECD and the Australian Government, involved a wide range of discussions on the key policy and operational challenges faced by VAT/GST authorities across the globe. In particular, the discussions focused on the challenges faced in the era of digitalisation and globalisation and the challenges associated with fraud and non-compliance. The discussions highlighted the importance of the international standards developed by the OECD to assist tax authorities in addressing these challenges effectively and consistently.
Participants highlighted the particular challenges faced by developing economies in ensuring that VAT/GST is properly collected on the rapidly growing e-commerce market, and discussed options for international cooperation to assist these economies in addressing these challenges. In particular, Global Forum participants welcomed the proposal by the OECD to work with developing economies and other regional and international organisations on the creation of practical guidance, based on OECD standards, tailored to the specific needs and circumstances of developing economies.
Media queries should be directed to Pascal Saint-Amans, Director of the OECD Centre for Tax Policy and Administration (+33 1 45 24 91 08) or David Bradbury, Head of the Tax Policy and Statistics Division (+33 1 45 24 15 97).