On December 9, at a meeting of the Supreme Eurasian Economic Council, the heads of the EAEU states signed a protocol amending the procedure for collecting VAT when providing services in electronic form on the territory of the Union.
According to the new rules, when cross-border purchase of services in electronic form on the territory of the EAEU, VAT taxation will occur at the buyer’s location. Prior to that, there was no common approach to this issue, which led to double taxation or to a situation where such commercial activity was not taxed in any of the Member States.
In addition, the approved protocol provided an opportunity for taxpayers providing services in electronic form to buyers on the territory of the EAEU to register in a member state as a VAT payer remotely, in a simplified format to submit an electronic declaration and pay tax.
Technical issues of the procedure for VAT tax administration in the provision of services in electronic form on the territory of the EAEU were also settled.
The Protocol and prospects for the development of the EAEU tax legislation in the field of e-commerce were commented by the Minister of Economy and Financial Policy of the EEC Bakytzhan Sagintayev:
“An important protocol has been signed today that establishes a supranational procedure for VAT administration when taxpayers provide services in electronic form in the EAEU member states. The agreement reached contributes to the development of a competitive environment in this area, even greater economic integration, and also brings clarity to business in matters of VAT taxation of services in electronic form on the territory of the EAEU. I would like to note that the work in this area has not yet been completed and the Commission has now begun approving a list of services in electronic form that will be subject to the new rules. In addition, the Commission is actively working to approve a draft Protocol aimed at resolving VAT taxation issues of electronic trade in goods between the EAEU countries.”
Source: UES website