An increasing number of the 170+ countries that impose transaction taxes—e.g., value added tax (VAT) or goods and services tax (GST)—have introduced or are in the process of introducing VAT/GST rules aimed at the digital economy, thus creating global tax obligations for U.S.-based companies that earn revenue from various e-commerce models. This means that U.S. companies with no physical presence outside the United States may have VAT/GST compliance obligations in many countries.
These rules focus on three main aspects of the digital economy: (1) remote sales of digital services; (2) remote sales of so-called low-valued consignments; and (3) tax obligations of digital intermediaries, such as online platforms or marketplaces.
Source: KPMG
