TaxPersonal TaxTaxation – Euro VAT ‘not fit for Web age’

Taxation - Euro VAT 'not fit for Web age'

Tax experts from top European companies have called on the European Commission to update its VAT rules to keep up with the booming electronic commerce market.

The commission claims the current tax system can handle internet business transactions by levying VAT at the point of consumption. But tax experts argue there is uncertainty over whether an internet server supplying a service constitutes a taxable presence. They also question how tax authorities will track the distribution of CDs downloaded over the Web.

The companies have formed the European e-business tax group, advised by PricewaterhouseCoopers and including Microsoft, Ericsson and IBM. It will submit proposals to the commission by the end of May for changes to the sixth VAT directive, which dictates most of the UK’s VAT rules.

Christine Crockford, group VAT manager for Ericsson, said the industry coalition wanted a clearer and more detailed tax treatment of e-commerce.

She called on the commission to come up with an effective mechanism for collecting VAT over the Web. ‘Technology could be produced to collect VAT electronically from consumers during online transactions,’ Crockford said.

‘The EC has said tax on e-commerce has to be simple, practical and fair,’ she added.

Related Articles

LITRG urges government to consider tax changes in disability work plan

Administration LITRG urges government to consider tax changes in disability work plan

2d Lucy Skoulding, Reporter
HMRC appeal rejected in Tottenham Hotspur case

Administration HMRC appeal rejected in Tottenham Hotspur case

2w Emma Smith, Managing Editor
HMRC urged to clarify impact of income allowances on Self-Assessments

Personal Tax HMRC urged to clarify impact of income allowances on Self-Assessments

2m Alia Shoaib, Reporter
New trading allowance: simplicity, but not as we know it

Administration New trading allowance: simplicity, but not as we know it

2m Emma Rawson, ATT Technical Officer
Wealthy individuals could circumvent top tax rate rises

Personal Tax Wealthy individuals could circumvent top tax rate rises

4m Alia Shoaib, Reporter
Italy grants first successful non-dom status application to former UK non-dom

Personal Tax Italy grants first successful non-dom status application to former UK non-dom

4m Emma Smith, Managing Editor
Industry reaction: Taylor Review does not go far enough in addressing tax issues

Legal Industry reaction: Taylor Review does not go far enough in addressing tax issues

5m Alia Shoaib, Reporter
Does the Taylor Review sufficiently address the gig economy?

Corporate Tax Does the Taylor Review sufficiently address the gig economy?

5m Alia Shoaib, Reporter