New Countries Taxing Cross-Border Digital Services
There are two new joiners to the ever-growing list of jurisdictions demanding non-resident suppliers of digital services to consumers based in their countries to register and charge local VAT on their supplies:
Starting from 1 August 2020 10% VAT rate applies to B2C digital services rendered by foreign suppliers so long as:
• Their Indonesian transactions exceed the threshold of 600m rupiah (currently circa GBP 32k , EUR 35k, USD 41k) per annum or 50m rupiah (currently circa GBP 2,6k, EUR 2,9k, USD 3,5k) per month; OR
• Their web traffic in Indonesia exceeds 12,000 visitors per year or 1,000 per month.
As of 1 August 2020 13% VAT rate must be applied on B2C digital sales made to consumers in Costa Rica by non-resident suppliers, who are included on the list of digital service providers published by General Directorate of Taxation. The list can be found here: https://www.presidencia.go.cr/comunicados/2020/06/servicios-digitales-transfronterizos-pagaran-13-de-iva-a-partir-del-01-de-agosto/ and it will be updated at least every six months in order to include new suppliers or exclude those who have voluntarily registered as taxpayers.
The Costa Rican legislator foresees two VAT collection mechanisms:
1) Direct collection of VAT by the digital service provider; or
2) in respect of the services rendered by those suppliers, who do not voluntarily VAT register, the VAT will be withheld by the payment card issuers.