Side by Side: What Tax Rides on a Foreign Subscription?

On 15 October Ghana’s banks began collecting tax on foreign digital subscriptions, as today’s Accra vignette reports. Accra insists the tax is not new. So, at the customs desk: what does a subscription to a foreign streaming or software service carry, and since when?

Australia

GST at 10 percent on imported services and digital products sold to consumers, since 1 July 2017, covering “e-books, movies, TV shows, music and online newspaper subscriptions.” Foreign sellers register once sales pass A$75,000 a year. The tax office explains that the GST “will be 1/11th of the price paid by the consumer.” The only government here to teach fractions with the bill.

Canada

Since 1 July 2021, foreign businesses selling “video or music streaming services” and the like must “register for, charge, collect and remit GST/HST” once revenue passes C$30,000 a year. The GST/HST rates in force run from 5 percent in Alberta to 15 percent in New Brunswick, Newfoundland and Labrador and Prince Edward Island. Four years behind Canberra, and arriving with a rate table.

United Kingdom

VAT at the standard 20 percent, and “the place of supply of cross-border digital services is the consumer’s location,” covering “music, films and games” and “programmes on demand.” A seller based abroad must register in the UK. The same 20 percent Ghana now collects, without the reassurance that it is not new.

Japan

Foreign providers of business-to-consumer electronic services such as “e-books, music, and videos” have been liable for consumption tax since 1 October 2015. The standard rate has been 10 percent since October 2019, 7.8 national and 2.2 local. Tokyo taxed the foreign stream early, and explained it in a brochure.

South Korea

VAT at 10 percent on electronic services sold to Korean consumers since 1 July 2015, including from foreign providers with no office in Korea, according to International Tax Review. The first on this list by three months, which in this neighbourhood counts as a rivalry.

India

Up to 18 percent integrated GST on overseas “online information and database access or retrieval” services, with rules widened from 1 October 2023, according to India Briefing; providers must now keep a database of their users. The highest rate here, and the only one that needs a database to tax a database.

Verdict

Ghana is not early, nor especially late; it is merely the latest to say it is not new. The rates run from 10 percent in Canberra, Seoul and Tokyo to as much as 18 in New Delhi and 20 in London, which happens to match Accra. Seoul went first, Canberra did the arithmetic, Ottawa brought the provinces, and New Delhi brought the paperwork. Every capital has found that the easiest taxpayer to collect from is a server abroad, which cannot vote.