Taxware http://www.taxware.com , has launched a new Web site, http://www.eudigitalsales.com . The new site will help companies based outside of the European Union (EU) understand the EU's complex regulations on the taxation of digital sales, which are scheduled to undergo significant changes this summer.
The site includes step-by-step guidelines and a question-and- answer section to help educate companies about the directive and related compliance issues, as well solutions they can deploy to comply with the new regulations. For non-EU companies unsure of the Directive's effect on their business, the online guide is a resource to help determine the impact of the new legislation.
On July 1, 2003, a new EU Directive on the Taxation of Digital Sales (Directive 2002/38/EC and Regulation No. 792/2002 amending the Sixth VAT Directive, 77/388/EEC) takes effect. This new legislation requires all non-EU companies selling digital goods and services online to consumers in the EU, to register with an EU taxing authority and levy value-added taxes (VAT).
Digital goods and services include software, images, news services and online gambling. Businesses must either establish a physical presence in an EU Member Nation, or register under a "special scheme" arrangement. The latter requires companies to charge, collect, remit and report variable rates of value-added tax, depending on the customers' country of consumption.
For non-EU businesses selling digital goods to EU consumers, the compliance challenge is significant. Each of the 15 EU nations imposes a VAT, but the rates differ widely among member nations. Luxembourg, for example, imposes a 15 percent VAT rate, while Denmark's VAT is 25 percent. In addition, the planned expansion of the EU to other nations in 2004 will require non-EU businesses to meet further VAT compliance regulations next year.
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