EU increases taxes on digital goodsApps, eBooks and mp3 downloads about to get more expensive in Europe
2015-01-02 11:03 by Daniela
As of January 1st 2015, businesses selling digital products in the EU, such as music, audio and film downloads, eBooks, computer games and app purchases, will have to charge VAT (value added tax) based on the customer's country, rather than the seller's country even if the supplier is based outside of the EU.
The move is an attempt to close a tax loophole between different countries in the EU. Previously, VAT on digital products used to be charged in the country of the supplier. This allowed web giants like Amazon, Apple and Google to base their operations in countries with low VAT rates, like Luxembourg where the VAT rate is just 3 percent.
The EU lawmakers hope that the closure of this tax loophole will create a level playing field for broadcasting, telecommunications and e-service businesses by removing the competitive advantage of EU member states with lower rates of VAT.
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