Tax authorities are increasingly relying on the business models of online platforms to collect and remit taxes. Digital platforms have all the necessary data to determine the taxability of each sale they facilitate, making them ideal tax collectors. This approach began with the EU’s VAT rules in 2015, which shifted the obligation to account for VAT to the platform for B2C sales of digital services. The second phase arrived in 2018 when platforms became liable for the collection and remittance of GST on low-value goods. Recently, the liability of digital platforms has expanded further to include remote services and the gig economy. Tax jurisdictions are broadening the scope of their rules to extend the VAT/GST obligations of digital platforms. The European Union is using ViDA to level the playing field and ensure an equal economic ecosystem with local businesses.
Source Iman Deschâtres
