Business Client Alert: EU to Assess New Value-Added Taxes on E-Commerce with U.S. Businesses
5/1/2002
This client alert explains the new taxation rules that the European Union ministers have approved requiring Internet companies to pay levies on EU-based sales of digitally downloadable goods and services. This new value-added tax, which will enter into effect on 1 July 2003, will apply to cultural, artistic, sporting, scientific, educational, entertainment, or similar activities and supplementary services delivered by electronic means; software; data processing; and the supply of information. The alert explains what the effects of these new rules will be for non-EU businesses and what systems U.S. businesses will need to develop in order to comply with these regulations. It also establishes what the penalties are for non-compliance and reminds clients that a tax debt in an EU member state is effectively enforceable anywhere across the EU.
