Delivering on its promise to support digital merchants wherever they sell, Taxamo, a global digital tax solution, has expanded its flagship support for EU VAT and launched support for U.S. Sales Tax & Japanese Consumption Tax (JCT).
Tax on digital sales was introduced in some U.S. States as far back as 2003 and on October 1, 2015, Japan became the 36th country to introduce new ‘place of supply’ tax rules. Similar EU VAT rules have been in place since January 2015 with several other regions, such as Australia and New Zealand, already announcing plans for digital tax laws to be introduced in 2016 and 2017.
“Many merchants spent significant time and money building a customer solution to comply with the EU’s place of supply rules, only to find that they now have to go back to the drawing board as they need to change their platforms to comply in other countries” said Taxamo CEO John McCarthy. “As Taxamo is 100% focused on tax on digital goods, we have amassed the expertise to manage this headache on behalf of merchants through a single integration.”
A critical concern voiced with the introduction of international digital taxation is the variation of rules between countries. While similar in nature, digital tax rules vary by region in terms of qualifying sales thresholds, specific tax calculation requirements and data retention periods.
“A big issue is that national laws are drafted in isolation and merchants have to code solutions that take, often conflicting regulations, into their platform,” continued Mr. McCarthy. “Given that currently Taxamo merchants are making sales in just about every country in the world, it is unimaginable to think that they would have to spend time and money adjusting their systems to comply. Taxamo assumes that burden and offers merchants a sustainable and scalable option for managing digital tax obligations.”
Taxamo is a privately held company located in the south west of Ireland. Existing Taxamo customers include WooThemes, BitTorrent, Penguin (Random House) and NTT Communications, among others. In addition, Taxamo has announced a number of strategic partnerships including Braintree Payments WooCommerce and Rainmaker by Copyblogger.
Meanwhile in related news, the OECD released their BEPS report on Monday (Action 1 relating to tax challenges of the digital economy). They also produced a neat video to accompany the report. The report will be presented and discussed at in Lima, Peru, tomorrow at the G20 meeting of finance ministers.
Many countries have been waiting on this report before finalising their approach of taxing digital services in the country of the consumer. With this rubber stamp from the OECD it is anticipated that many regions will move ahead with digital taxation changes.
If you are interested in speaking with John McCarthy of Taxamo on the findings of the report and the implications for digital sellers, please call or email: +353 83 153 6358, [email protected]