US having to charge VAT to EU customers

Jan 23, 2004 2 Replies

I noticed the EU, in it's infinite wisdom, has legislated to say US businesses must charge VAT when they supply electronically consumable products (newsletters, games, electronic information etc) to EU customers. See



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I noticed this because many of the US companies I deal with have now started charging VAT. I find this very interesting, as to how the EU can legislate as to what a foreign company must do. I'm sure many companies in the US will be unaware of this legislation and will continue to supply consumable products to EU citizens, and continue not to bill VAT on such items. I'm sure the US companies that this is directed at will be equally keen to hike their prices by 17.5%, unless they are forced to do so.



Kind Regards, Shane Cook.


say US

consumable

have now started

can legislate

in the US will

consumable

items. I'm

keen to hike

These rules have been in place for some time, and only apply to supplies via the Internet, i.e. supplies of digital products.

ISTR that it is because a pure internet transaction is covered by the laws of the country where the purchaser resides (possibly just as well ... otherwise certain dodgy internet activities would be 'legal' in the UK - or at least outside the law).

Thom

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