[HAL9000]

From http://europa.eu.int/comm/taxation_customs/whatsnew.htm

VAT: Commission welcomes Council adoption of rules for application of VAT to electronically delivered services

The European Commission has welcomed the Council’s adoption of a Directive and a Regulation to modify the rules for applying value added tax (VAT) to certain services supplied by electronic means as well as subscription-based and pay-per-view radio and television broadcasting. The new rules, based on Commission proposals of 7 June 2000 (see IP/00/583 and MEMO/00/31), will create a level playing field for the taxation of digital e-commerce in accordance with the principles on the taxation of e-commerce agreed at a 1998 OECD Ministerial Conference. The rules will ensure that when these services are supplied for consumption within the European Union, they will be subject to EU VAT, and that when they are supplied for consumption outside the EU, they will be exempt from VAT. The changes modernise the existing VAT rules to accommodate the emerging electronic business environment and to provide a clear and certain regulatory environment for all suppliers, located within or outside the EU. The rules also contain a number of facilitation and simplification measures aimed at easing the compliance burden for business. Member States must implement the new measures by 1 July 2003.

[Paleo Conservative]

[Arkinsaw]

Our high tech suppliers are going to suffer a little market share loss....thats okay because the playing field will be level and we'll still out compete them.

The real loser in this is the consumer in European countries. They will now find themselves suddenly paying up to 25% more for services just like that. US suppliers will hand them an invoice with a nice little US price and a nice EU VAT line item. If they want to screw themselves out of 25% of their paycheck or earnings to feed a growing bureaucracy in Brussels then so be it.

Check that bottom line citizens of Europe. Laugh at how you screwed the US corporations. Then pay up.

[supercat]

I must confess to some confusion about how they intend to enforce their will on non-EU countries. What would seem much more workable would be for the EU countries to work with Mastercard/Visa and add the tax there. Otherwise, things don't really seem quite workable.

[Ken H]

Man, I got lost in all the bureaucratese from that EU press release!

Would someone dumb this down for me and explain how this could affect Americans and how them Europeans plan on collecting?

[spokeshave]

The new rules will apply to the supply over electronic networks (i.e. digital delivery) of software and computer services generally, plus information and cultural, artistic, sporting, scientific, educational, entertainment or similar services as well as to broadcasting services.

AND PORNOGRAPHY....please tell me this isn't so....

[Huusker]

As a the owner of a small e-commerce site, this bugs me to no end. How am I supposed to track the tax rates of 15 different countries?