The EAEU will eliminate double taxation in electronic commerce

On May 15 this year, at the site of the Eurasian Economic Commission, experts from the member countries of the Eurasian Economic Union discussed amendments to the EAEU Treaty aimed at resolving the issue of taxation of electronic commerce in goods.

In some cases, in the EAEU member states, Internet sites face the problem of double taxation when selling goods to consumers of another EAEU member state.

According to the EAEU law, VAT on goods supplied in mutual trade is charged by the destination country.

Most countries of the world adhere to this principle (France, Great Britain, Turkey, the Republic of Uzbekistan, Australia).

In order to eliminate discrepancies among the EAEU members on this issue, the Kazakh side initiated amendments to the EAEU law regarding the settlement of VAT collection issues in mutual electronic trade in goods.

The parties supported this initiative and agreed to develop a procedure for collecting indirect taxes in mutual electronic trade in goods.

It should be noted that in some EAEU countries (Armenia, Belarus, Kazakhstan, Kyrgyzstan), the principle of VAT collection for electronic trade in goods in the country of consumption has already been fixed at the national level.

According to the draft document, in the case of mutual electronic trade in goods, VAT will be levied by the country of destination, that is, taxes will be charged to the budget of the country where the goods will be consumed.

The document is planned to be adopted by the end of this year.

The adoption of the document will eliminate discrepancies in this issue and possible double taxation when selling goods through electronic platforms on the territories of the EAEU member states, which helps to reduce the burden on entrepreneurs and the final price of goods for the consumer.