The future of Indirect Taxation: Individual country-based VAT compliance reporting rules for digital economy participants could come to an end.

Proposition 8: Country-based VAT compliance

In Proposition 7, we discussed a myriad of practical indirect tax compliance challenges being experienced by digital economy participants. This raises a more fundamental question — should country-based indirect tax compliance reporting obligations be imposed on digital economy participants at all? Let’s explore further.

In December 2020, the OECD released its Tax Administration 3.0 report, ¹²³ which sets out a vision for the digital transformation of how tax authorities may carry out their work in the future. In our view, the report is one of the most forward-thinking and insightful tax policy reports in recent times.

Source KPMG

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