Global VAT & GST on Digital Services: Complete Guide

In over 110 countries, foreign digital service providers must register for VAT/GST, collect the appropriate amount of tax, and remit it to tax authorities. These rules exist for B2C supplies mostly, however, about 25 countries extended these obligations to B2B as well. The direction the tax world is heading is reshaping the digital economy and requiring providers to comply with diverse tax regulations. Many countries are introducing marketplace rules, shifting the responsibility of VAT/GST collection and reporting to marketplaces. Navigating VAT/GST complexities in digital services demands sophisticated solutions to manage compliance effectively and efficiently. VAT and GST are indirect taxes applied to the consumption of goods and services, including digital services, rather than on income or profits. VAT is the most commonly used consumption tax, and more than 170 countries have implemented it worldwide.