Plans for updated pan-European Union rules on taxation of electronic services will run into British opposition at a meeting of finance ministers next week, according to Reuters.
The new rules would eliminate the requirement for value added tax (VAT) on electronic services when they are provided to non-EU customers. VAT for services supplied to clients in the 15-nation bloc would be retained.
Right now most non-EU suppliers selling to EU customers lack a VAT requirement, which puts EU suppliers at disadvantage.
The proposed new rules on the VAT treatment of electronically delivered services are meant to update existing rules on the application of VAT to services delivered over the Internet. Existing rules were drawn up before the birth of e-commerce and need to be modernized.
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