Consultation response

16 February 2015

FEE responds to OECD Discussion Drafts on the place of supply of business-to-consumer (B2C) services

With this response, FEE contributes to the discussion on the place of supply for VATGST purposes for B2C supplies of services and intangibles raised in OECD discussion drafts. The discussion drafts were produced in the context of the OECD’s ongoing work in developing Guidelines to address issues of double taxation and unintended non-taxation in the field of VAT. The drafts present a set of common principles for determining the place of taxation for B2C supplies of services and intangibles, in accordance with the ‘destination’ principle.

FEE supports the OECD’s ‘destination’ approach, which proposes that, in general, supplies of services to the end consumer should be charged to VATGST in the country that is the consumer’s normal residence (as opposed to being charged in the country that is the supplier’s normal residence). FEE also supports the proposal that where a service takes place face-to-face (i.e. when both supplier and consumer is present when the service is provided) then the place of supply should be the location where the service takes place. Finally, FEE welcomes the inclusion of a framework for assessing whether a specific rule is necessary when the aforementioned general rules do not produce the desired result (e.g. where the supply directly relates to fixed property).

Whilst FEE supports the proposal for a simplified registration and compliance regime for reporting of VAT liabilities, we highlight situations where this may produce an undesirable result for the supplier and suggest that the guidelines should stipulate that the simplified regime is optional for the supplier and not mandatory. We ask for additional guidance to be provided on situations where, due to increased mobility of people across national borders, it may not always be simple to identify a consumer’s normal residence.

Related documents:

 FEE comments on Public Discussion Drafts – Guidelines on Place of Taxation for Business-to-Consumer (B2C) Supplies of Services and Intangibles and Supporting ProvisionsFEE comments on Public Discussion Drafts – Guidelines on Place of Taxation for Business-to-Consumer (B2C) Supplies of Services and Intangibles and Supporting Provisions

 Related links/more information:


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