E-books and iTunes to face price hike as EU tax rules enter into force

For businesses which make cross-border supplies of digital services to consumers in EU member states, from 1 January 2015 the place of taxation for digital services (broadcasting, telecommunications and e-services) will be the location of the consumer, not the location of the business supplying the service.

The changes would create a level playing field for EU businesses by removing the existing competitive advantage of EU member states with lower rates of VAT (such as Luxembourg).

Businesses outside the EU (for example, the USA) that supplied digital services to consumers in one or more EU member state would also be affected by the changes.

• Primary Source

ESO: Background information: Luxembourg drops legal challenge to EU request for tax info http://www.europeansources.info/record/luxembourg-drops-legal-challenge-to-eu-request-for-tax-info/

ESO: Background information: Juncker admits he is 'weaker' after fresh batch of Luxleaks revelations http://www.europeansources.info/record/juncker-admits-he-is-weaker-after-fresh-batch-of-luxleaks-revelations/

The Telegraph, 01.01.15: Controversial VAT change means e-books are about to get more expensive http://www.telegraph.co.uk/finance/businessclub/11320318/Controversial-VAT-change-means-e-books-are-about-to-get-more-expensive.html

UK: GOV.UK: HM Revenue & Customs: VAT: supplying digital services to private consumers, December 2014 https://www.gov.uk/government/publications/vat-supplying-digital-services-to-private-consumers

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