The European Union EU is closing a loophole that gives non-member e-commerce companies a key competitive advantage. At present, the lack of geographic and legal constraints means non-EU companies trading over the internet are exempt from value-added tax VAT on electronically delivered services to EU private consumers. Under a directive now in front of the European parliament and council, VAT rules would apply across the board.
The directive, which is awaiting approval from the 15 EU member states, addresses a new business concern the supply of electronically delivered services and broadcasting services for which the recipient pays. However, the proposal does not apply to services for which no charge is made, such as...
