Delegates attending the OECD’s Global Forum on VAT which took place on 20 – 22 March in Australia unanimously voted to endorse new rules concerning the collection of VAT by online platforms/marketplaces and to allow for data sharing and enhanced co-operation between tax authorities and online marketplaces.
The agreed measures were contained in a new report of the OECD, The Role of Digital Platforms in the Collection of VAT/GST on Online Sales, which builds on the 2015 BEPS Action 1 Report on the Tax Challenges of the Digital Economy. As over two-thirds of online transactions take place by way of marketplace/platform, it is hoped the agreed measures will allow authorities to focus on the compliance of platforms, rather than the individual trader, and significantly increase the amount of revenue collected.
Speaking about the agreed measures, David Bradbury, Head of Tax Policy at the OECD noted, “These new measures provide governments with the tools needed to ensure that online platforms play their part in the collection of VAT/GST. They will also level the playing field for those on our high streets and in our malls, who have had to compete against online competitors enjoying a tax advantage”.