Chapter 3. Other roles for digital platforms to support the collection of VAT/GST on online sales

This chapter focuses on other roles for digital platforms than full VAT/GST liability to assist with collection of VAT/GST on online sales. The obligations, which are examined in this chapter, include information sharing between platforms and tax authorities, education of suppliers, and formal co-operation agreements between tax authorities and platforms. This chapter also examines the merits of platforms taking a voluntary liability obligation. These obligations could be complementary to the full VAT/GST liability regime, such as in cases where such an approach is applied only to specific type of supplies from online sales.


3.1. Introduction

This chapter recognises that as well as the full VAT/GST liability regime for digital platforms identified in Chapter 2, there are possible other roles for platforms which can assist with the efficient and effective collection of VAT/GST on online sales. In particular, this chapter takes into account that the scope of application of the full VAT/GST liability regime may be limited in practice, and that other obligations on platforms may therefore be desirable for jurisdictions in terms of effective tax collection, and indeed can also provide benefits to platforms.

The roles in this chapter include the information sharing obligation, the education of suppliers, formal agreements between tax authorities and platforms, and providing the option for a platform to voluntarily take on the obligation as collector of the VAT/GST.

In considering these roles, it is important for tax authorities to evaluate the rationale of the measures, taking into account the need for the allocation of human, financial and technological resources within the tax authority to implement and administer these measures; as well as the proportionality of any measures for digital platforms and businesses more generally. Tax authorities are encouraged to evaluate the possible integration of the measures included in this chapter into an overall VAT/GST compliance strategy for online trade, possibly in combination with the measures discussed in Chapters 2 and 4.

3.2. Information sharing obligation

3.2.1. Background and preliminary considerations

As a means of assisting with compliance, an information sharing obligation could be envisaged by tax authorities whereby a digital platform would be required by law to provide the tax authority with information relevant for VAT/GST compliance purposes without the platform necessarily being liable or having a role in collecting and remitting the tax.

In practical terms, the digital platform could be asked to provide this information either on a regular basis, upon request or spontaneously, e.g. in cases of suspicious activity.

In designing such a measure, a tax authority will need to consider what type of information it needs to support the efficient and effective VAT/GST collection on online sales; to what extent it is reasonable to seek such information from digital platforms (e.g. whether the platform can be expected to have the requested information at hand); and evaluate whether it actually has the human and technical resources to process the collected data to support VAT/GST collection. It is for tax authorities to consider how they can make best use of the data provided by digital platforms, notably for advanced risk analysis as a means to target non-compliance. This underlines the importance of considering the implementation of an information sharing requirement for digital platforms in light of the possible use of the collected data within the context of a broader VAT/GST compliance strategy for online trade (see Chapter 4).

Tax authorities are also encouraged to minimise risks of unnecessary duplication of information obligations for digital platforms, by considering whether the relevant information is already being collected by other means or provided to other authorities (e.g. customs authorities) within circumstances that allow this information to be used effectively for VAT/GST collection purposes.

Overall, tax authorities are encouraged to ensure that information sharing obligations for digital platforms to support VAT/GST collection on online sales are properly balanced against the overall policy objective to keeping compliance costs and administrative burden as limited as possible. These considerations are discussed in more detail below.

3.2.2. Scope and application of the obligation

In determining the scope and application of this obligation, it may be useful to consider whether the obligation to provide information is a standalone measure or whether it is supplemental to the full VAT/GST liability regime or to other roles to support VAT/GST collection.

If the obligation is applied as a standalone measure then it would be reasonable to target all digital platforms that have access to information relevant for VAT/GST compliance purposes (see in Section 3.2.4, guidance on the type of information which could be reported). In this case, the information sharing obligation could apply to digital platforms that:

  • take an integral role in the supply e.g. online marketplaces;

  • transfer buyers to sellers (click-through or shopping referral platforms);

  • contract or agree to listing or advertising items for sale in any forum or medium;

  • receive a fee, commission and/or other consideration for listing of advertising items;

  • process payments.

If this obligation is designed to be operated together with other measures targeted at digital platforms, in particular with a liability to collect and remit the VAT/GST and comply with other reporting obligations, then it might be reasonable and proportionate to limit the application of any additional information sharing obligations to the digital platforms that are not covered by those other measures.

Where a digital platform carries out both transactions that are covered by a full VAT/GST liability regime and transactions that are not covered by such a regime (i.e. where a full VAT/GST liability regime applies to a limited category of supplies), it may be preferable to apply a broad information sharing obligation covering all supplies as it could be administratively more straightforward.

It is relevant to consider that as the digital platforms may be located outside the taxing jurisdiction, it is recognised that enforcing such an obligation against foreign digital platforms may be challenging. Therefore such an information sharing obligation is ideally combined with administrative co-operation arrangements between jurisdictions (see Chapter 4).

3.2.3. Type of information to be shared/reported

Digital platforms are capable of collecting a vast amount of data. It is reasonable to require information/data to be shared that is available to digital platforms in the normal course of their business activities, and that is proportionately relevant for VAT/GST compliance purposes (i.e. necessary to satisfy the tax authorities that the tax for a supply has been charged and accounted for correctly by the underlying supplier). Box 3.1 includes a list of such possible information to be shared/reported by digital platforms.

Box 3.1. List of possible information
  • The nature of the supply;

  • The date of the supply;

  • The value of the supply;

  • The identification of the supplier, including tax identification number (if appropriate);

  • The VAT/GST amount and rate;

  • Shipping address;

  • Fulfilment warehouse;

  • The customer location;

  • Information used to determine customer location;

  • Payment service provider;

  • An invoice or other document issued to the customer.

Note: This is an indicative list of possible information to be considered by jurisdictions in framing such a measure. Certain information will depend on the nature of the supply i.e. goods or services/intangibles.

3.2.4. Implementation options

Two broad options could be considered for the implementation of an information sharing obligation for digital platforms in connection to online sales:

Option 1 – Provision of information on request

Under this option, a jurisdiction requires that a digital platform retains records of the sales that are subject to VAT/GST in that jurisdiction, and that this information be made available on request. It could seek records from the digital platform in respect of a specific category of sales, e.g. sales made within a given period or made by a particular supplier via the platform (e.g. as part of an audit on that supplier). It could also request information in respect of a specific transaction (e.g. to verify whether the declared value was correct).

Option 2 – Systematic provision of information

Under this option, a digital platform is required to systematically and periodically provide information on online sales carried out via the platform to the tax authority of the jurisdiction of taxation. The format and the information required can be specified by the jurisdiction. A tax authority could limit such an obligation to specific sales e.g. goods above a certain value. The submission period can be determined by the taxing jurisdiction taking into account the envisaged use of the data e.g. for auditing purposes or perhaps for real-time risk analysis.

3.2.5. General design and policy observations/considerations

The following design and policy considerations can be considered by a tax authority in respect of implementing an information sharing obligation on platforms:

  • It is important to identify in advance what type of information can be reasonably expected from a digital platform to be shared/reported to ensure that policy objectives are met, recognising that available information may differ among digital platforms;

  • Strike the appropriate balance between collecting relevant information without posing a disproportionate burden on digital platforms;

  • Consider the interaction with other regulatory frameworks:

    • Data protection/privacy issues/and other guarantees;

    • Competition law may pose limits to the extent digital platform can share commercial information;

    • Potential difficulties for digital platforms in sharing data that is not held within the jurisdiction of taxation.

  • Ensure that the information requested from a platform is not already required to be submitted by other means i.e. to the tax authority or another authority, with the objective of ensuring that the administrative burden on the platform is minimised;

  • Provide clear guidance on the type of information considered relevant/useful (including type of information to be reported, in what form, frequency of the reporting, etc.);

  • Consider measures to facilitate compliance (e.g. allowing the use of an electronic reporting system as business processes become increasingly automated) – use as a point of reference some of the guidance included in the Collection Mechanisms Report – Chapter 3 Section C.5 (OECD, 2017[1]);

  • Recognise that a platform may require an appropriate lead-in time in order to ensure that the requisite systems for data management and transfer are in place in addition to the necessary analytic capabilities. Digital platforms may need to improve their technological capacity (e.g. digital platforms may need to equip their internal system to collect and provide the requisite data);

  • Promote close co-operation between tax authorities and digital platforms for the request/submission of the data (e.g. consider putting an agreement to stipulate details of data sharing, expectations, collaborative working arrangements, etc.);

  • Ensure that data collected is used efficiently as a means to boost compliance (see Chapter 4);

  • Share the data collected from digital platforms further with customs authorities and/or other authorities concerned in order to maximise the use of these data;

  • Recognise that this is an area which can benefit considerably from international co-operation (see Chapter 4).

3.3. Education of suppliers using digital platforms

3.3.1. Background and possible approach

VAT/GST obligations can present challenges to businesses engaging in cross- border e-commerce whether it is because the businesses do not know the applicable VAT/GST rate for a particular good or service in the taxing jurisdiction, invoicing, record- keeping and reporting obligations. This is particularly true when a business makes sales to various different countries.

The Guidelines (the “Guidelines) (OECD, 2017[2]) and the Collection Mechanisms Report (OECD, 2017[1]) highlight that a proper communication strategy is crucial to achieving appropriate compliance levels by foreign suppliers in the taxing jurisdiction.1 Experience suggests that the availability of readily accessible and easily understood guidance for taxpayers benefits compliance levels by foreign suppliers, particularly in jurisdictions that are utilising simplified registration and compliance mechanisms for the collection of VAT/GST on inbound supplies. In this context, the value of educating suppliers has been acknowledged in the 2017 IMF/OECD report on Tax Certainty which emphasises that “proactive taxpayer engagement and education programs help ensure that taxpayers have a clear understanding of their obligations(IMF/OECD, 2017[3]).

It can be difficult in practice, however, for tax authorities to reach out directly to suppliers outside their jurisdiction to advise them of their obligations, particularly in respect of supplies of goods where there may be millions of suppliers from around the world active on platforms.

Given many underlying suppliers use digital platforms to access the global market, there is an opportunity to use these platforms as communication channels to provide accurate and timely information to underlying suppliers on their VAT/GST obligations. It is notable that several digital platforms have spontaneously taken initiatives to communicate with their underlying suppliers on their VAT/GST obligations in the various taxing jurisdictions – this includes the operation of online forums for the platforms’ communities of suppliers whereby information on general regulatory issues including taxation can be shared.

Experience suggests that the ability to access this information from one place (e.g. through a dedicated web portal instead of a number of different sites) increases the efficacy of the communication and facilitates the updating by the tax authorities. It is recognised, however, that tax authorities may lack the technological capacity to provide/operate such information and to keep them updated and accessible to suppliers worldwide. The capacity of digital platforms to communicate with the often large numbers of suppliers that sell through their platform offers a unique opportunity to tax authorities to use these platforms for the dissemination of information on these suppliers’ VAT/GST obligations. This could include the provision and dissemination of guidelines, direct messages concerning notifications of changes in obligations, the organisation of webinars and advice from tax authorities via a platforms community forum.

3.3.2. General design and policy observations/considerations

The following design and policy considerations are relevant for the education role provided by and via platforms:

  • The education role identified is designed to supplement rather than replace existing communication strategies by tax authorities to inform business of their obligations;

  • Platforms should be able to rely on the information they have been provided by tax authorities, in their communication with underlying suppliers;

  • Information provided should be focused, clear and up-to-date in respect of the relevant obligations2;

  • Any changes to this information should be communicated in a timely manner by the tax authorities to the platform, which should promptly inform their underlying suppliers;

  • There is an opportunity for tax authorities to work with the platforms in respect of addressing questions from underlying suppliers, and therefore tax authorities are encouraged to proactively engage with the platforms in this context.

3.4. Formal co-operation agreements

3.4.1. Background and preliminary considerations

A further option which can be considered by tax authorities is to enter into formal agreements with digital platforms based on the co-operative compliance concept. Such agreements are essentially multi-faceted, in that they can combine a variety of measures and approaches to involve digital platforms in maximising VAT/GST compliance levels in online sales. This would typically include information sharing (periodic and spontaneous) and education (including using the platform as a conduit to communicate with underlying suppliers on compliance obligations, etc.), as well as alerting the tax authorities and platforms to instances of fraud, and responding quickly to notifications by a tax authority where underlying suppliers are found to be in breach of their VAT/GST obligations.

These types of agreements are based on the concept of the co-operative compliance model. The Forum on Tax Administration in the 2013 Report, Co-operative Compliance: A Framework: From Enhanced Relationship to Co-operative Compliance, explored the possibilities for efficient tax collection through co-operative compliance between tax authorities and business (OECD, 2013[4]). The study recommended that tax authorities develop a relationship based on trust and co-operation. The report is based on a detailed examination of the practical experiences of countries that have established this type of relationship. In addition, two recent reports produced by the EU VAT Forum3 on co-operation between business and tax authorities provide some broad guidance on areas for co-operation and the benefits of such.

While voluntary in nature, such an agreement between platforms and tax authorities could also cover obligations that are statutory, such as information sharing obligations. There may also be merit in making these agreements public as this will increase transparency, and indeed can give confidence to consumers, to underlying suppliers, and to competing domestic business.

3.4.2. Scope of formal co-operation agreements

As indicated above, tax authorities may wish to centre such an agreement on the provision of information, education of the platform and underlying suppliers and general co-operation, with the objective of increasing compliance and reducing uncertainty for the platforms/suppliers in respect of obligations.

A formal co-operation agreement could be particularly useful where the digital platform is not liable for or plays no role in collecting and remitting the VAT/GST, although agreement could still be useful in cases where a platform is fully liable for certain supplies such as imports but not for others such as domestic supplies. Tax authorities may also wish to consider entering into formal co-operation agreements with digital platforms as an intermediary step pending implementation of a full VAT/GST liability regime for digital platforms. This could be useful as the introduction of such a liability regime may require an implementation lead-in period, and therefore a co-operation agreement can help secure the VAT/GST revenues in the shorter term.

The commitment to share information under such an agreement can potentially be richer than a statutory reporting obligation as the platform may be incentivised to proactively identify suspect behaviour by underlying suppliers, to remove non-compliant suppliers from the platforms, and provide timely and targeted information to a tax authority in respect of non-compliance which would allow the tax authority to more effectively target these suppliers even if they migrate to other platforms.

The aspect of the agreement concerning education could be useful in stimulating compliance given that many of the underlying suppliers who utilise platforms are not established within the taxing jurisdiction and therefore they may not be familiar with the obligations therein. Potential education measures to be provided under such agreements can include the provision and dissemination of guides via the platform, direct messages concerning notifications of changes in obligations, the organisation of webinars and advice from tax authorities via a platform’s community forum. Such an arrangement can be particularly useful for a tax authority to efficiently reach out to the underlying suppliers.

The co-operation aspect of an agreement concerns the ability for a tax authority to efficiently liaise with a digital platform and vice versa to support compliance by the underlying suppliers. For instance, as part of joint and several liability provisions (see Chapter 4), a tax authority could efficiently communicate to a designated contact the details of a supplier who is not compliant and therefore allow the platform to take the necessary internal steps to ensure compliance, which could as a first step require the underlying supplier to register in the taxing jurisdiction, and if necessary as a second step require the removal of the supplier from the platform. Furthermore, the ability for a platform to reach out to a dedicated contact point in the tax authority can ensure compliance related issues are highlighted in a timely manner to a tax authority. A possible additional element in any such agreement with a platform is to make it public. This can be useful for consumers as it can clearly indicate the platforms which are ‘safe’ as regards VAT/GST compliance, particularly for consumers buying goods online who may pay VAT/GST to a platform at the point of sale and therefore might expect that they will not face a further VAT/GST liability on importation. It may need to be emphasised in such agreements that other relevant consumer issues such as product safety, adherence to intellectual property rights, etc. are not within the scope of an agreement, depending on whether this is the case.

3.4.3. General design and policy observations/considerations

The following general design and policy aspects can be considered by tax authorities in respect of implementing formal co-operation agreements with platforms.

  • The terms, conditions and the timeframe of the agreement should be clear, particularly in respect of any legal aspects e.g. joint and several liability provisions, response times for information requests, mutual contact details, etc.;

  • The terms of the agreement should be realistic and proportionate bearing in mind that the model is voluntary and based on co-operative compliance between the tax authority and the platform. Agreements should also be reviewed regularly to ensure they are effective;

  • There may be benefits to tax authorities and platforms in making the agreements public. This can give confidence to competing domestic business and underlying suppliers. In this respect, a possible approach is for a tax authority to prepare a framework agreement in consultation with the platforms and then request these platforms to become public signatories to the agreement. This approach also ensures a transparent level-playing between the platforms;

  • The design and policy considerations in respect of information sharing identified above equally apply here.

3.5. Platforms acting as a voluntary intermediary

3.5.1. Background and preliminary considerations

The Guidelines recognise that “compliance for foreign suppliers could be further facilitated by allowing such suppliers to appoint a third-party service provider to act on their behalf in carrying out certain procedures, such as submitting returns. This could be especially helpful for small and medium enterprises and businesses that are faced with multi-jurisdictional obligations.”4 (OECD, 2017[2]) The functions of such third-party providers in VAT/GST compliance can range from purely administrative tasks such as VAT/GST calculation and remittance to assuming full responsibility of underlying suppliers.5 (OECD, 2017[1])

Accordingly, tax authorities could consider allowing platforms to act voluntarily as a third-party service provider on behalf of underlying suppliers. This could notably be relevant in cases where a platform is considered liable for certain supplies but not for others (see below). This provision could benefit the efficiency of compliance for both the platform and the underlying supplier.

3.5.2. Scope

The key issue for a jurisdiction when considering the scope of a measure allowing a platform to act as a voluntary intermediary is whether it can lead to a more efficient and effective collection of taxes. In this context, a tax authority could see advantages in an arrangement whereby a trusted platform collects VAT/GST or assumes the liability for the VAT/GST on behalf of potentially thousands of underlying suppliers.

A jurisdiction could allow this provision to operate as complementary to the full VAT/GST liability regime, applying it to transactions not covered by that obligation (see Chapter 2). A jurisdiction could also determine that the voluntary intermediary model could be useful as an intermediate step pending the coming into effect of a full VAT/GST liability regime.

Specifically in relation to imports of goods from online sales, jurisdictions may wish to allow platforms to act as voluntary intermediaries to collect and remit the VAT/GST on imports of goods beyond statutory liability requirements. For example, if the liability regime as described in Chapter 2 is only applied to imports of goods below the customs de minimis threshold, the possibility of allowing the digital platform to voluntarily opt to collect and remit the VAT/GST on behalf of the underlying supplier above this de minimis threshold could be considered. Such arrangements would need to be made in close consultation with the customs administration.

Finally, another key consideration on scope relates to whether this can apply to domestic supplies and under what conditions. As with foreign underlying suppliers this consideration has to take into account the potential impacts on underlying suppliers who may not be required to be registered for VAT/GST.

3.5.3. General design and policy considerations

As such an arrangement is voluntary and has potential benefits for tax authorities in terms of increasing compliance, it is essential that it is attractive for digital platforms in terms of compliance obligations. This is particularly the case where a digital platform may not be located in the jurisdiction with taxing rights. Consequently, jurisdictions can consider establishing a simplified registration and compliance regime to facilitate compliance. In this respect, countries can draw on the extensive guidance in Chapter 3 of the Collection Mechanisms Report on the design and practical operation of simplified registration and compliance regimes (OECD, 2017[1]).

Other relevant considerations include:

  • The scope for such a voluntary intermediary arrangement should be clearly defined (e.g. exclusion on the grounds of the nature of the goods or value);

  • The voluntary intermediary arrangement should be reflected in a clear agreement between the underlying supplier and the digital platform, to ensure that the respective VAT/GST liabilities are clearly defined. A further issue for consideration is that an underlying supplier may sell via several platforms and therefore any arrangement should be cognisant of this possibility;

  • It may be the case that a digital platform decides to include this as part of a service offering to its underlying suppliers;

  • It is reasonable to expect that a platform that chooses to operate as an intermediary to voluntarily collect and remit the VAT/GST on online, should be able to benefit from any simplified registration and collection regimes that are ordinarily available to underlying suppliers;

  • It is essential that a tax or customs authority has the means to verify that the VAT/GST has been or will be accounted for, and that the platform has taken responsibility for this.


[3] IMF/OECD (2017), IMF/OECD Report for the G20 Finance Ministers TAX CERTAINTY, (accessed on 3 April 2018).

[2] OECD (2017), International VAT/GST Guidelines, OECD Publishing, Paris,

[1] OECD (2017), Mechanisms for the Effective Collection of VAT/GST, OECD, Paris,

[4] OECD (2013), Co-operative Compliance: A Framework: From Enhanced Relationship to Co-operative Compliance, OECD Publishing, Paris,


← 1. Please see further the Guidelines, Chapter 3, Section C.3.3.7. Availability of information; Collection Mechanisms Report, Chapter 3, Section C.7 Communication strategy – availability of information.

← 2. Collection Mechanisms Report, Chapter 3, Box 4 – Information to be made available to support compliance by foreign suppliers under simplified registration and collection regimes.

← 3. The EU VAT Forum is a discussion platform for representatives from tax authorities and businesses. Information on the forum is available at

The 2016 co-operation report is available at

The 2018 e-commerce report is available at

← 4. Guidelines, paragraph 3.148.

← 5. Collection Mechanisms Report, Chapter 2, Section C.

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