BDO Indirect Tax News

Introduction

Tariff and trade issues continue to dominate the news, with policy and rate changes reshaping trade relationships. The 10% universal tariff imposed by the US that has applied since early April while countries negotiate trade deals with the US will soon end despite the fact that the promised “90 deals in 90 days” have not been secured. The 90-day pause on the Trump administration “reciprocal” tariffs expired 9 July with President Trump revealing—two days before the expiration date—a revised start date of 1 August for new (high) tariff rates. The president has sent letters to various heads of state, alerting them to the tariffs that will apply to their countries should they fail to reach an agreement with the US within the next few weeks.

We feature four tariff-related articles: 

• An agreement between the US and the UK announced during the G7 summit in Canada that will reduce some tariffs on imports from the UK to the US 
• Canada’s decision to repeal its digital services tax after President Trump suspended trade negotiations between the two nations 
• A tentative trade deal between China and the US
• Importers can decide to absorb the cost of tariffs, but they often choose to pass on the extra cost to consumers: what are the US state sales tax consequences in these cases?

Turning to other indirect tax news, Chile, China and Laos have introduced compliance obligations for platform operators. Countries continue to tinker with their e-invoicing initiatives—one of our lead stories looks at e-invoicing in the Middle East and we include updates from the Dominican Republic, Kenya, Latvia, Malaysia, Mauritius, Nigeria, Poland, Romania and Tunisia (and check out BDO’s e-invoicing heat map).

In Latin America, Argentina has launched a new simplified VAT return system to modernize compliance, Brazil’s efforts to increase the rates of the financial transactions tax have faced backlash and judicial challenges and Colombia’s Supreme Administrative Court has overruled the tax authorities’ position on the obligation to withhold VAT when contracting services from foreign service providers. 

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