Press Release: OECD to work on clarifying VAT/GST application in cross-border trade

The OECD is launching a new project aimed at providing guidance for governments on applying Value Added Taxes, or VAT - also called Goods and Services Tax, or GST, in some countries -- to cross-border trade.

Pending completion of this project, OECD countries have agreed on two fundamental principles for charging VAT/GST on internationally traded services and intangibles:

For consumption tax purposes internationally traded services and intangibles should be taxed according to the rules of the jurisdiction of consumption;

The burden of value added taxes themselves should not lie on taxable businesses except where explicitly provided for in legislation.