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10th May 2002

EUROPE RAISES THE COST OF ON-LINE GOODS

Brian Grainger


 

The EU has issued yet another of their directives. This one demands that all companies, including those outside the EU, must charge VAT on goods sold digitally, (e.g. by downloading from the Internet). In order to do this non EU countries will have to register in an EU country and charge the appropriate rate of VAT. The directive must be enforced by 1st July 2003.

Some commentators have said this is good news for EU companies as they will be on a level playing field with the US.

Might I dare to suggest that it is bad news for consumers, who will now have to pay more, always assuming that non EU companies bother to sell things here anymore.

An equally level playing field could have been achieved by removing the need to charge VAT on digitally sold goods by EU countries but the EU does not understand the concept of a global economy and tax reductions.


 

 

 

 


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