Sealing a formal political agreement on the proposal and sending it back to the European Parliament for further discussion, ministers stuck to their line that foreign importers of digital products, such as music or computer software downloaded from the internet, should pay VAT, as the goods are consumed within the EU.
This despite a strong worded statement by US deputy treasury secretary Kenneth Dam, who said the Bush administration has ‘serious concerns about the European Union proposal’.
The US objections particularly focus on the fact that under the new system, non-EU sellers of digitally delivered goods or services would have to charge VAT, at the rate applying in the European consumer’s country of residence. Conversely, EU companies selling digital products to EU consumers would continue to charge VAT at the rate of the companies’ country of establishment.
Dam added: ‘US sellers may be required to charge VAT on sales to an EU consumer at a rate higher than their EU competitors’. In addition, US sellers may be subject to more onerous administrative and compliance requirements than are placed on their EU competitors.’
He claimed the proposals may break OECD guidelines and World Trade Organisation rules.
Making Tax Digital will impose significant additional tax compliance costs on small businesses for little or no medium term benefit, tax and small business experts told MPs
The drive towards a fully digital tax regime is an admirable one, but mandation is simply wrong, according to one of the UK's most senior tax technology practitioners - Paul Aplin
HMRC has won its tenth successive case against tax avoidance schemes promoted by NT Advisors. The Court of Appeal has ruled that NT ... read more
HMRC is continuing to ramp up the number of raids on premises it carries out as part of criminal investigations, searching 761 properties in the last year