The EAEU Heads of State approved the new procedure for VAT taxation of digital services

On December 9 at the meeting of the Supreme Eurasian Economic Council, the EAEU Heads of State signed a protocol amending the procedure for VAT taxation of e-services delivered across the Union.

According to the new rules, when cross-border purchasing some services in electronic form within the EAEU, VAT will be taxed at the buyer's location. Previously, there was no single approach to this issue, which resulted in double taxation or a situation where such commercial activities were untaxed in any of the Member States.

In addition, the approved protocol enabled the taxpayers rendering services in the electronic form to buyers within the EAEU to register remotely in the Member State as a VAT payer, submit an electronic declaration, and pay tax in a simplified format.

Besides, technical issues of the VAT tax administration procedure for rendering services in electronic form within the EAEU were resolved.

The protocol and prospects for developing the EAEU tax legislation in the field of e-commerce were commented by Bakytzhan Sagintaev, EEC Minister in charge of Economy and Financial Policy:

“Today, an important protocol was signed that fixes the supranational procedure for administering VAT when taxpayers render services in electronic form in the EAEU Member States. The agreement reached contributes to developing a competitive environment in this area, ensures even greater economic integration, and clarifies to businesses the issues of VAT taxation of services rendered in electronic form within the EAEU. I would like to note that the activities in this area are currently going on, and the Commission has begun to approve the list of services rendered in electronic form, which will be subject to the new rules. In addition, the Commission is actively working on the approval of the draft Protocol aimed at resolving the issues of VAT taxation of electronic trade in goods between the EAEU countries.”