Digital Trade

In many developing countries, the VAT treatment of cross-border digital supplies is the largest single base-broadening measure available. As such, this toolkit provides detailed guidance published by the OECD, the World Bank Group, and regional development partners.

Digital Toolkits

Sharing/Gig Economy

The OECD has issued three regional VAT Digital Toolkits. Each provides full-scope recommendations for successful reforms: place-of-taxation rules for remotely supplied services; a simplified registration and collection regime for non-resident suppliers; platform liability; audit approaches; and a project plan for implementation.

Beyond the regional toolkits, the OECD has also developed guidance on VAT issues related to platforms and the sharing/gig economy in the fast-growing digital trade space.

Key Features

  • Scope Precision 

    A deemed-supplier rule must state which supplies it covers and which platform functions trigger it. The OECD (2019) report provides a list of relevant functions for this purpose. Vague scope produces double taxation when the underlying supplier is also registered. 

  • Proportionate Liability

    Platforms depend on the information provided by suppliers. Where a platform acts in good faith on that information, its liability should be limited. Joint and several liability without such a limit is difficult for all parties.

  • Aligned Reporting

    Where a country wants platform data instead of, or in addition to, platform collection, it should follow the Model Rules for Reporting by Platform Operators (OECD, 2020). Bespoke national formats multiply cost without adding revenue.

  • Lead Time

    Systems changes take time for businesses to design, test and implement. The OECD (2019) report and other resources stress the importance of adequate lead time (ranging from 12-24 months) for accuracy and compliance.