Reply: International Services – A global shift in VAT/GST

Businesses involved in the cross border supply of services should be aware that a global shift is taking place in the way such services are taxed from a VAT/GST perspective. This shift essentially seeks to tax supplies of services where they are consumed. It affects supplies of services to businesses (B2B), in particular multi-location enterprises engaged in VAT/GST exempt activities such as financial services. It will also bring about radical changes for remote suppliers of electronic services to consumers (B2C) which have traditionally remitted VAT/GST to the Tax Authority where they have established their business.

Going forward such suppliers may be required to register and remit VAT/GST in consumer markets even where they have no physical presence or nexus there. These changes give rise to significant VAT/GST compliance obligations for businesses as well as a range of commercial and legal issues.

Read more: KPMG - International Services – A global shift in VAT/GST taxation