This VAT Digital Toolkit for Latin America and the Caribbean (LAC) provides detailed guidance to assist LAC tax authorities in the design and implementation of robust policies for the application of Value Added Taxes (VAT) to digital trade. This Toolkit covers the core components of a comprehensive VAT strategy directed at the main types of digital trade and e-commerce, particularly online sales of services, intangibles and goods to private consumers by foreign businesses and digital platforms that often have no physical presence in their consumers’ respective jurisdictions. It provides policy advice to support tax authorities’ decision-making and detailed practical guidance and manuals for the legislative design, the administrative implementation and operation, and the enforcement, of VAT digital policies in light of jurisdictions’ specific needs and circumstances. This Toolkit builds on the internationally agreed standards and guidance delivered by the Organisation for Economic Co‑operation and Development (OECD), resulting from intense inclusive global policy dialogue with OECD member countries and non-member economies worldwide, and with international organisations and other relevant stakeholders, including the global business community and academia. It incorporates the experience and best practices from tax authorities in jurisdictions that have already successfully implemented these standards. This Toolkit has been developed through an inclusive and collaborative process with the active involvement of LAC tax authorities and regional organisations, to ensure that it takes due account of the specific circumstances, needs and capacities of tax authorities in the LAC region and to ensure that the identified solutions are properly tailored and capable of being implemented. The development of this VAT Digital Toolkit for the LAC region was led by the OECD in close co-operation with the World Bank Group (WBG). This co-operation is part of a comprehensive partnership between both organisations in the area of VAT, which also includes the development of VAT Digital Toolkits for the AsiaPacific region and for Africa. The OECD and WBG have a long history of working together in delivering capacity building programmes in the area of taxation and decided to expand this partnership to VAT design and administration, in particular to assist developing countries in addressing the VAT challenges of the digital economy. The Inter‑American Center of Tax Administrations (CIAT) and the Inter‑American Development Bank (IDB) have contributed considerably as key regional partners in the development of this VAT Digital Toolkit for the LAC region. The partnerships with CIAT and IDB have been crucial in ensuring the active involvement of tax authorities in the LAC region in the development of this work and in ensuring that proper account is taken of the specific regional needs and circumstances. The purpose of this Toolkit is to provide practical guidance for addressing the VAT challenges of digital trade that can quickly and effectively be implemented at national level by tax authorities within the LAC region. It is not prescriptive, but rather provides advice and guidance on the possible approaches, based on the internationally agreed standards and best practice approaches. The opinions expressed and arguments employed in this Toolkit do not necessarily reflect the official views of the OECD member countries. The Toolkit will be updated as appropriate to reflect the continuously changing digital trade landscape and the evolution of available VAT policy and administration tools and strategies. This Toolkit is aimed at assisting tax authorities and at supporting capacity building on VAT design and administration, supplementing other initiatives in this field. It is not an end in itself. The OECD, WBG, CIAT and IDB secretariats are available to complement the guidance presented in this Toolkit with tailored assistance to interested jurisdictions.
