On 4 February 2013, the OECD released an invitation to comment on 4 new draft elements of the OECD International VAT/GST Guidelines. The OECD is developing the Guidelines to address uncertainty and risks of double taxation and unintended non-taxation that result from inconsistencies in the application of VAT to international trade, with a specific focus on trade in services and intangibles.

On 5 August 2013, the OECD published the comments received in response to the draft elements. Overall, the commentators were supportive of the OECD’s work on the Guidelines and their aim to address uncertainty and the risks of double taxation and unintended non-taxation that result from inconsistencies in the application of VAT/GST to international trade.

A concern raised included that in order to determine whether a business has establishments in several jurisdictions, further clarification of the term “establishment” may be needed. It was also suggested that a possible solution could be to apply the definition of permanent establishment contained in the OECD Model Tax Convention to the present VAT/GST Guidelines.

The comments are available on the OECD website.

[LTN 150, 6/8/13]