European VAT for Cloud Computing, Software, Apps, and Other Digital Products and Services: Mastering 2015 Rules

Description

Even companies without a physical presence in the EU must pay close attention to the tax impact of selling electronically accessed products and services, such as software and cloud computing, to customers in EU member countries. Under EU law, VAT may apply to sales of electronic products and services when selling to EU customers even if the sale is done from the United States.

Beginning Jan. 1, 2015, the EU VAT rules applied to sales of “electronically supplied services” have been changed and extended. This means among other things that when a company from the U.S. sells services online (such as software, cloud services, games or telecom services for example) to private persons within the EU, they are required to register for VAT and charge about 20% to the private customers. The services will be taxed where the private customer is located.

The U.S. company that sells products also has to register for VAT and charge VAT if they import to the EU and sell on. VAT rates and tax bases differ across national and local EU jurisdictions. Keeping up with these variations is a crucial and time-consuming undertaking.

Determining the applicable VAT is no simple exercise. Tax professionals and their advisors must consider questions such as whether place of supply rules apply to service transactions, which office incurs the VAT obligation, whether local VAT rates apply, and whether the sale represents a continuing business relationship or a one-time transaction.

Listen as our panel of seasoned tax experts offers strategies for optimizing your company’s VAT compliance and planning in response to the dynamic treatment of digital products and services by European tax authorities.

Outline

1. Background and recent updates
   1. Difference in VAT treatment for EU and non-EU suppliers
   2. 2015 change to allocation of VAT by customer location
   3. Updates to rates and rules
2. VAT treatment of various categories of electronic goods
   1. Goods vs. services
   2. Electronic media, books, games, etc.
   3. Cloud computing business models
      1. SaaS, PaaS and IaaS
      2. Software delivered electronically
3. Structuring sales with VAT impact in mind
   1. Leases, rents and licenses vs. sales
   2. Sales to businesses, sales to consumers
   3. Considerations for purchasers
   4. Crafting sales agreements

Benefits

 Our panel will review these and other key issues:

• How will the changes to VAT allocation rules effective in 2015 affect cloud computing transactions and other “electronially supplied services”?
• How are various cloud computing models treated under European VAT, including software as a service (SaaS), platform as a service (PaaS), and infrastructure as a service (IaaS)?
• What filing obligations are necessary under VAT for out-of-jurisdiction companies?
• What changes to sales contracts and business arrangements can minimize VAT?

Learning Objectives

After completing this course, you will be current in VAT treatment of electronic software, services, and products in European jurisdictions. You will understand how different categories of electronic products and services will change how VAT applies, and at what rate, in various European jurisdictions.

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Strafford Publications, Inc. is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its website: www.nasbaregistry.org.

IRS Approved Provider

Strafford is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).

CPE Credit

Strafford is a NASBA CPE sponsor and our live webinars qualify for CPE credits. They offer you a high quality, cost effective, and convenient CPE option, with no lost travel time or expenses.

EA Credit

Strafford is an IRS approved continuing education provider and this course is approved for 2 enrolled agent (EA) credit hours.

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