OECD International VAT/GST Guidelines

Sun 16th Apr 2017

The OECD VAT/GST Guidelines received further endorsement this week at the 4th OECD Global Forum on VAT.

The guidelines provide a comprehensive framework of standards and principles for countries around the world to follow in the development of coherent and consistant indirect tax guidelines.  In addition, they aim to provide for clarity and harmony on the treatment of cross-border transactions, including the collection of taxes on such operations.

Aims of the guidelines include:

  • Simplify the administration of VAT regimes;
  • Improve the obligations and certainty for businesses looking to remain compliant;
  • Reduce the incidents of double taxation; and
  • Reduce the opportunities for VAT fraud.

Areas covered in the guidelines include:

  • Core features of national VAT regimes: staged collections principle; a broad base; and taxing the final consumption.
  • Achieving neutrality for business, including on cross-border transactions; and
  • Adopting the destination principle for cross border B2B and B2C supplies of goods and services.

Future developments

The OECD will continue to develop these guidelines in the future, including:

  • Further guidance on the efficient operation of VAT regimes;
  • How to adopt the guideline as technology changes the way goods or services are provided, and how VAT can be administered; and
  • Dealing with related tax issues, including transfer pricing and permanent establishment.


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