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EU exempts digital B2B sales of radio from VAT
New Delhi, June 29: The European Union has exempted the digital B2B sales of radio and television broadcasting services and other electronically supplied services over the net from the purview of Value Added Tax from July 1, 2003, an ESC release said.
New Delhi, June 29: The European Union has exempted the digital B2B sales of radio and television broadcasting services and other electronically supplied services over the net from the purview of Value Added Tax from July 1, 2003, an ESC release said.
This is in accordance to a new set of directives issued by EU on Value Added Tax arrangements, the Electronics and Computer Software Export Promotion Council (ESC) has said.
Significantly, the directives do not apply to hard goods, which are delivered by non-EU suppliers by traditional means.
The rationale behind the exemption is that the EU-based business customer self assesses the VAT liability in its VAT returns and therefore a non-EU supplier of electronically supplied services would not have to register or charge vat with regard to B2B sales. Under the new directive, suppliers from outside EU of website, web-hosting, distance maintenance programmes would be charged VAT in the EU country where the consumer is based.
The VAT rates, which vary widely in EU, may be as low as 15 per cent in Luxembourg to as high as 25 per cent in Denmark and Sweden.
Reacting to the EU decision, executive director of ESC D K Sareen said electronically supplied and updated software images, text and information and data bases would also attract VAT.
The other digitised products which would come under the purview of vat include electronically supplied political, cultural, artistic, sporting, scientific and entertainment broadcast and supply of distance teaching. Bureau Report
Significantly, the directives do not apply to hard goods, which are delivered by non-EU suppliers by traditional means.
The rationale behind the exemption is that the EU-based business customer self assesses the VAT liability in its VAT returns and therefore a non-EU supplier of electronically supplied services would not have to register or charge vat with regard to B2B sales. Under the new directive, suppliers from outside EU of website, web-hosting, distance maintenance programmes would be charged VAT in the EU country where the consumer is based.
The VAT rates, which vary widely in EU, may be as low as 15 per cent in Luxembourg to as high as 25 per cent in Denmark and Sweden.
Reacting to the EU decision, executive director of ESC D K Sareen said electronically supplied and updated software images, text and information and data bases would also attract VAT.
The other digitised products which would come under the purview of vat include electronically supplied political, cultural, artistic, sporting, scientific and entertainment broadcast and supply of distance teaching. Bureau Report