EU Wrestles With Taxing E-Commerce

With electronic commerce proliferating in Europe and the rest of the world, the European Union (EU) is wrestling with the inevitable issue (at least for governments) of how to tax it. No final decisions have yet been made -- other than the EU intends to come up with a system that neither makes e-commerce more attractive than other forms of business nor discourages its growth. Best guesses at this point: The EU will adapt its existing value-added tax (VAT) to cover e-commerce, consider all e-commerce to be a "service," not goods for tax purposes, and provide for rebating VAT on e-commerce "consumed" outside the EU.

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