TaxCorporate TaxEurope to agree on e-commerce VAT

Europe to agree on e-commerce VAT

A Europe-wide agreement on value-added tax levied on e-commerce is imminent, according to chancellor Gordon Brown.

He told MPs in the House of Commons that political agreement on the issue was reached at the last meeting of European Finance Ministers – ECOFIN – (held on 22 January) without discussion.

Brown said the proposed EU Directive and Regulation ‘make welcome changes to the rules governing the taxation of digitised products, so as to correct certain distortions of competition’.

He added: ‘During the negotiations the UK successfully secured an explicit commitment, which now features in the Directive, to a comprehensive electronic solution for the taxation of such items which will treat EU and non-EU businesses on an identical basis.’

Last week the European Union Council of Ministers refused to back down, following pressure from Washington, over its plans to reform VAT charged on digital products.

EU plans for VAT on digital products will favour EU-based suppliers over competitors in the US.

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