TaxPersonal TaxBelgium set to meet UK to solve VAT crisis

Belgium set to meet UK to solve VAT crisis

A bilateral meeting between the Belgian presidency of the European Union and British officials is under consideration as a way of solving the growing crisis over VAT on electronic goods.

Currently suppliers of downloadable electronic goods from outside the EU pay no VAT on their sales while domestic traders must comply with tax law.

EU officals had thought they had found a solution but in June Britain blocked the move by suggesting there should be an EU wide moratorium for VAT on electronic goods.

A decision was put off for the Belgian presidency to find a solution, but the new incumbents have set no time aside over their six month tenure to put the matter to rest.

Sources within the EU say ‘a viable’ solution had been found and that it was only the UK that objected.

The developments come as European finance ministers met in Brussels where the UK is expected to blocks plans to finance the EU with a direct tax.

Tax experts are now concerned that the VAT issue is being overlooked, despite talk of a bilateral meeting.

Chas Roy-Chowdhury, head of tax at ACCA, said: ‘While this discussion is going on business within the EU is losing out.

‘The EU does not believe there is support among businesses for a moratorium but there clearly is.’

Britain moved on a moratorium after a proposal from Sweden gained ground at the EU. The idea was that a third party trader, like those from the US, would register for VAT in just one EU country and then charge, and declare, tax at the rate of the countries in which customers live. The host country would then collect and redistriute the revenue.

Links

EU delays decision on VAT moratorium

UK seeks e-bus VAT moratorium

Related Articles

Inheritance tax is 'unfit for modern society' and should be abolished, says think tank

Personal Tax Inheritance tax is 'unfit for modern society' and should be abolished, says think tank

3w Alia Shoaib, Reporter
Rent-a-room relief – the survey says…

Personal Tax Rent-a-room relief – the survey says…

2m Helen Thornley, ATT Technical Officer
What should the OTS prioritise in its review of inheritance tax?

Personal Tax What should the OTS prioritise in its review of inheritance tax?

4m Alia Shoaib, Reporter
LITRG urges government to consider tax changes in disability work plan

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

5m Lucy Skoulding, Reporter
HMRC appeal rejected in Tottenham Hotspur case

Administration HMRC appeal rejected in Tottenham Hotspur case

6m 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

7m Alia Shoaib, Reporter
New trading allowance: simplicity, but not as we know it

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

7m Emma Rawson, ATT Technical Officer
Wealthy individuals could circumvent top tax rate rises

Personal Tax Wealthy individuals could circumvent top tax rate rises

9m Alia Shoaib, Reporter