TaxPersonal TaxUK seeks e-bus VAT moratorium

UK seeks e-bus VAT moratorium

The government and the European Commission has been warned it must introduce a moratorium for VAT on electronic goods or risk allowing unfair competition to continue in the EU.

Chancellor Gordon Brown is tomorrow expected to call for the moratorium at the meeting of EU finance ministers in Luxembourg. Abandoning VAT on all goods bought over the internet throughout the EU would block an alternative directive.

The growing conflict stems from electronic traders in third party countries, like the US, selling to EU citizens but without paying VAT.

Traders inside the EU have had to pay their VAT as normal and a moratorium, campaigners claim, would ‘level the playing field’.

However, tax experts say the commission should have acted already.

Chas Roy-Chowdhury, head of taxation at ACCA, said: ‘There needs to be a moratorium now and then talk about it afterwards.’

The current proposal for dealing with VAT from third party countries is to ask a company to register in one EU state and charge the VAT rate corresponding to the country in which customers live. The registration state would then redistribute the tax collected.

Links

Web VAT continues to baffle Brussels

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