The OECD has published its international VAT/GST Guidelines, which are expected to be approved in 2016. Jurisdictions are encouraged to use existing bilateral, regional or multilateral arrangements on mutual co-operation to practically comply with the Guidelines.
At the second meeting of the OECD Global Forum on VAT, in April 2014 in Tokyo, the high-level officials of 100 jurisdictions and international organisations endorsed the first three chapters of the OECD International VAT/GST Guidelines as global standards for the application of VAT/GST to international trade.
In the Statement of Outcomes of this meeting, they urged the OECD to finalise the work on the remaining elements of the Guidelines and to present the completed Guidelines for endorsement at the next meeting of the Global Forum.
This work has been carried out since April 2014 and the resulting new elements of the Guidelines have been merged with those that were endorsed at the 2014 Global Forum to form a fully consolidated draft.
This consolidated draft was approved by the OECD’s Committee on Fiscal Affairs (CFA) on 7 July 2015 with OECD and G20 countries working together on an equal footing, and is now presented for discussion at the third meeting of the OECD Global Forum on VAT.
These new elements of the Guidelines notably include a recommended solution for the effective collection of VAT/GST on the remote business-to-consumer sales of digital products by foreign suppliers (B2C Guidelines).
These B2C Guidelines were developed in the context of the OECD/G20 Project on Base and Erosion and Profit Shifting (the BEPS Project). They were included in the 2015 Final Report on BEPS Action 1 “Addressing the Tax Challenges of the Digital Economy” that was endorsed by G20 Finance Ministers at their meeting on 8 October 2015 in Lima, Peru, as part of the final BEPS Package.