Back peddling: Belgium puts brakes on e-VAT discussions.

Currently, suppliers of downloadable electronic goods from outside the EU pay no VAT on their sales, while domestic traders must comply with tax law. But the UK blocked a Swedish solution to the problem in June by proposing a moratorium on all VAT charged on electronic goods and the problem was shelved for the new Belgian presidency to tackle.

However, it has become clear the Belgians have set aside no time for the issue during their six months in office. A source said a bilateral meeting was now the only way forward.

Belgian prime minister Guy Verhofstadt (above right), who last week received a bicycle from Swedish representative Gunar Lund (right) to mark the handover of the presidency, has other issues to tackle including proposals for a new tax to pay for the EU.

The VAT issue was not expected to be on the agenda for finance ministers when they met on Tuesday.

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

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