- Digital economy growth led to challenges for tax authorities in capturing revenue from digital services.
- Two main solutions emerged: VAT/GST on digital services and Digital Services Tax (DST).
- VAT/GST on digital services is an extension of traditional VAT/GST, aiming to ensure digital companies pay VAT/GST in countries where consumption occurs.
- VAT/GST on digital services aims to level the playing field for domestic and foreign digital companies.
- VAT/GST registration, filing, and payment requirements vary by country.
- Some countries have VAT/GST registration thresholds, while others require registration before the first supply.
- VAT/GST filing frequencies vary, including monthly, bi-monthly, quarterly, semi-annual, and annual.
- VAT/GST rates also differ between countries.
- Most countries apply VAT/GST to business-to-consumer (B2C) transactions, but some include business-to-business (B2B) transactions.
- Digital Services Tax (DST) is a revenue-based tax, unlike VAT/GST, which are consumption taxes.
Source: vatabout.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
