EY warns of challenges taxing foreign digital services

The Gov­ern­ment’s plan to im­pose VAT on dig­i­tal ser­vices sup­plied by for­eign com­pa­nies will re­quire a new reg­is­tra­tion and col­lec­tion sys­tem, as the mea­sure seeks to bring ser­vices pro­vid­ed by non-res­i­dent busi­ness­es in­to the tax net.

In its re­view of the 2027 bud­get, pro­fes­sion­al ser­vices firm EY said that un­der the ex­ist­ing VAT Act, dig­i­tal ser­vices sup­plied by non-res­i­dents fall out­side the tax net be­cause “the sup­ply is deemed to take place out­side of T&T”.

The Gov­ern­ment pro­pos­es to ap­ply VAT to dig­i­tal ser­vices sup­plied by non-res­i­dent providers to peo­ple in Trinidad and To­ba­go. EY said a sim­pli­fied reg­is­tra­tion sys­tem would al­low for­eign sup­pli­ers to reg­is­ter, col­lect and re­mit VAT elec­tron­i­cal­ly.