VILNIUS, LITHUANIA / ACCESSWIRE / MAY 20, 2020 / 1StopVAT can register businesses for VAT in numerous countries and ensure full compliance with applicable VAT regulations. 1StopVAT has software that tracks sales volumes and precisely identifies each customer's location. Prepare a business for the upcoming VAT compliance checks wave with 1StopVAT during these disrupting times.
It is believed that countries' tax revenues will be significantly impacted due to COVID-19 outbreak and lockdown of traditional businesses, so there is no question that governments worldwide will become more and more aggressive in collecting VAT from the remote sales of digital services, and enforcement of VAT compliance checks for remote sellers and providers of digital services will definitely increase significantly to cover money spent on the response to COVID-19 crisis.
The World Bank Group expects to deploy up to $160 billion leveraged loans over the next 15 months to help developing countries to respond to the COVID-19 crisis and bolster economic recovery. Other major economies are also implementing fiscal policies to respond to the COVID-19 crisis.
As people around the globe have been forced into self-quarantine, an increase in users can be monitored at online gaming, streaming, learning and conferencing applications. While traditional businesses are being shut down due to quarantine, performance branding company WITHIN has announced that digital services revenues have increased by 268% at 2020.03.21 and conversion rates - by 184% at 2020.03.19.
The UK has already started VAT compliance checks of businesses trading from overseas. To those, who won't comply, HMRC threatens that it will send online marketplace providers a ‘Notification of joint and several liability'. Jointly and severally liable means that both businesses and the online marketplace provider may be required by law to pay any UK VAT due. This could result in removing a business from the online marketplace. It will be suspended to trade in the UK until its VAT and payments are up to date. It could then take six weeks for the online marketplace provider to allow the seller to use their platform again.
Similar VAT compliance checks have been started in Turkey and Norway. Tax authorities of these countries are collecting payments data to remote sellers wired by their residents and reassessing due VAT of such remote sellers according to collected payments data. Besides banning of digital business activities, if remote sellers will fail to settle reassessed VAT liabilities, Turkish tax authorities are empowered to withhold payments from Turkish banks and other financial institutions to remote sellers and may collect VAT debt through payment services providers.
More and more counties across the globe levy VAT on digital services provided to their residents. Meaning, if the business provides a B2C digital service, the seller must register for VAT in a particular country, charge a particular VAT rate of the country, which the customer is the resident of during the sale, fill VAT returns and pay VAT in that country.
To determine the customer's residency, digital service providers must collect at least two pieces of non-conflicting location evidence and most digital services providers collect a customer's IP address as the most reliable source of information about a customer's place of residence. This can be challenging in certain situations. For example, if the customer uses VPN, digital services providers may not be able to identify such a user's residency accurately, as IP addresses can be distorted by VPN users, and this could lead to penalties for late registration and late payment interest. Rates vary from 10% to 200%, depending on each country.
Tracking sales volumes, identifying customer's place of residence and looking for the tax consultants in each country where businesses supply digital goods and services is cost-inefficient and time-consuming. 1StopVAT understands that businesses' top priority is to focus on its activities rather than on taxes, therefore, 1StopVAT is committed to back-up businesses in VAT matters.
1StopVAT is a single point of contact for tax compliance.
View source version on accesswire.com: