[eccr] EU imposes e-commerce tax

EU imposes e-commerce tax
======================

The European Union has agreed new rules forcing internet retailers based
outside the EU to levy value-added-tax (VAT) on sales to customers
within the 15-nation bloc. The measures, which look set to hit the
European sales of major US e-commerce operators such as AOL Time Warner,
could exacerbate an ongoing EU-US trade dispute over steel.

The European Commission said the new rules would make it easier for
EU-based internet retailers, who are already obliged to charge VAT on
sales to customers within the European bloc, to compete with their
non-EU rivals. At present, EU consumers can avoid paying VAT on many
products by ordering them online from US-based e-commerce companies.

The new VAT regime, which is due to come into force in July 2003, will
apply to sales of products downloaded from the internet, including
software and online film or radio subscription. The US, which has
already threatened to refer the issue to the World Trade Organisation,
fears that the rules would shut non-EU firms out of the market.

BBC News - May 07, 2002
http://news.bbc.co.uk/hi/english/business/newsid_1973000/1973390.stm

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