The OECD has released its latest set of draft Guidelines to address uncertainty and the risk of double taxation and unintended non-taxation that results from inconsistencies in nations’ application of VAT to international trade, with a specific focus on trade in services and intangibles.

The Guidelines are being developed in stages by the OECD Committee on Fiscal Affairs through its Working Party No 9 on Consumption Taxes. The objective is to arrive at a complete set of Guidelines applying to cross-border trade in services and intangibles by the end of 2014. The draft Guidelines that are now presented for public consultation until 3 May, deal with cases where a cross-border supply of a service or intangible is made to a business that is established in more than one jurisdiction. An additional analysis is then required to determine which of the jurisdictions where this customer has establishments, is the place of taxation with respect to this supply. The draft Guidelines proposes that the place of taxation be the jurisdiction where the establishment that uses the service or intangible wholly or partially is located.