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Tax handling in different jurisdictions
Just a skeleton of a document so far but need somewhere to document & discuss.
NOTE: Non-EU businesses which sell electronic services (includes webhosting and music downloads amongst other things) to private customers in the EU should charge VAT on the sale.
USA + other - lots to fill in here
Article about GST/HST/PST in Canada.
Wkikpedia has a lot of info though not all accurate and many VAT rates are wrong/missing.
- B2B priced exclusive of VAT.
- In UK & MT (and in most EU I would guess) retailers who advertise prices inclusive of VAT calculate VAT deduction based on gross price.
- Cross-border B2B 'intra-EU supply' between VAT registered entities subject to 'reverse charge'.
- Small entities may be VAT exempt. Annual turnover requirements for this depend on local laws.
- Place VAT is charged for intra-EU supply to non-VAT registered entities may depend on turnover of supplier.
- Place of supply also depends on who transports the goods.
- Standard VAT rate at least 15%. Countries may also have 1 or 2 lower rates which must be at least 5%. Certain goods and services can be exempt. Example in Malta: dive shops sell most equipment and all services at 18%, with some course manuals at 5% (though if sold in a pack with non-book items then all at 18%), diving regulators are classed as exempt (weird) and hotel accommodation is at 7% (correct 15/3/14).
Malta VAT department has some decision trees which demonstrate how complex cross-border supply really is.
Out-law.com has a good article on taxation of e-commerce based on UK law which includes a reminder that provision of electronic services from outside the EU to private customers residing in EU member states is liable to VAT in the customer's member state.
Starting 2015-01-01 B2C supply of 'eservices' within the EU will be subject to VAT at the destination rather than the source. Details of what eservices are can be found in this PWC article.