World VAT/GST News September 2020

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Costa Rica

From 1 October 2020, Costa Rica will introduce VAT at 13% on the provision of electronic services by non-resident companies.

At present, foreign businesses providing digital services in Costa Rica do not have to charge VAT on their sales. However, to remove the unfair advantage this gives to non-resident companies over Costa Rican resident providers, the Costa Rican government is proposing to implement VAT at 13% on these types of transactions.

This new tax will apply to a range of electronic services including streaming games, music, apps, films, e-books, e-journals and internet services.

Ecuador

From 16 September 2020, Ecuador will impose VAT at 12% on the supply of e-services to local consumers by non-resident businesses.

At present, non-resident businesses providing digital services in Ecuador do not have to charge VAT on their sales. However, to remove the unfair advantage this gives to non-resident companies over Ecuadorian resident providers, the Ecuadorian tax authorities have confirmed that VAT will be charged at 12% on these types of transactions from September.

This will be applied to a range of electronic services including streaming games, music, apps, films, e-books, e-journals and internet services.

Indonesia

From 1 September 2020, the Indonesian Tax Authorities will introduce VAT at 10% on all e-services transactions made by non-resident companies.

Currently, non-resident businesses providing e-services to Indonesia do not have to charge VAT on their sales. However, to remove the unfair advantage this gives to non-resident companies over Indonesian resident providers, the Indonesian government will introduce VAT at 10% on these types of transactions from September 2020.

The tax authorities also confirmed that the new tax must be charged and collected by the non-resident suppliers who will have a requirement to VAT register when they:
Exceed annual sales of IDR 600 million per annum; or
Sell to more than 12,000 Indonesian consumers per annum.

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