Swiss Parliament Greenlights VAT Law Overhaul, Taking Effect from January 1, 2025

"New VAT Regulations Imposed on Online Marketplaces; Mail-Order Businesses Face Sanctions for Non-Compliance"

New Rules for Online Marketplaces to Charge, Collect, and Remit VAT on Low-Value Imported Goods by Non-Resident Suppliers to Consumers in the Country

In a move to ensure fair taxation and create a level playing field for businesses, the Irish government has announced new rules for online marketplaces. These rules will require marketplaces to charge, collect, and remit Value Added Tax (VAT) on low-value imported goods sold by non-resident suppliers to consumers in the country.

The aim of these rules is to address the issue of VAT avoidance by non-resident suppliers who sell goods to Irish consumers through online marketplaces. Currently, many of these suppliers are not registered for VAT in Ireland and are therefore not collecting or remitting the tax on their sales. This puts Irish businesses at a disadvantage as they are required to charge and remit VAT on their sales.

Under the new rules, electronic marketplaces will be obligated to collect and remit VAT on behalf of non-resident suppliers. This means that when a consumer purchases a low-value imported good through an online marketplace, the marketplace will add the appropriate VAT to the purchase price and remit it to the Irish tax authorities. This will ensure that the tax is collected and that Irish businesses are not unfairly disadvantaged.

To enforce these rules, electronic marketplaces will be required to provide information to the tax authorities upon request. This will allow the authorities to verify that the correct VAT has been charged and remitted. Failure to comply with these requirements may result in sanctions for the non-compliant mail-order businesses.

In addition to these changes, the Irish government has also announced other VAT-related updates. Travel services and cultural event participation fees will now be VAT-exempt. This means that consumers will not have to pay VAT on these types of services, making them more affordable and accessible.

Furthermore, the VAT on streaming services will now be based on the customer’s location. This means that if a consumer is located in Ireland, they will be charged Irish VAT on their streaming services. This change aligns with the EU’s efforts to ensure that VAT is paid in the country where the consumer is located, rather than where the supplier is based.

Another notable change is the introduction of a reduced VAT rate of 2.6% on menstrual products. This reduction aims to alleviate the financial burden on women and ensure that these essential products are more affordable and accessible to all.

In addition to these changes, the Swiss Federal Tax Administration has announced a waiver for foreign taxpayers who are required to appoint a fiscal representative in Switzerland. The waiver will be granted at the discretion of the tax administration and aims to simplify the tax obligations for foreign taxpayers.

These changes in VAT regulations are part of the Irish government’s ongoing efforts to ensure fair taxation and create a level playing field for businesses. By requiring online marketplaces to charge, collect, and remit VAT on low-value imported goods, the government aims to address VAT avoidance and support Irish businesses. The exemptions and reduced rates on certain goods and services further demonstrate the government’s commitment to creating a fair and accessible tax system.

Overall, these changes will have a significant impact on the taxation of online marketplaces and the VAT obligations of non-resident suppliers. It is important for businesses and consumers to be aware of these changes and ensure compliance with the new rules.

Barry Caldwell

Barry Caldwell

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