EU agrees to overhaul VAT on digital services

Downloads of software, ringtones, games, music and movies sold to consumers will be taxed where the consumer is located instead of where the supplier is based with effect from 2015 under changes to Europe’s VAT regime agreed on Tuesday.The Council of Ministers of the EU reached political agreement on two draft Directives and a draft Regulation that reform Europe’s regime for charging Value Added Tax on services, including electronic services. The changes are intended to prevent distortions of competition between member states that operate different VAT rates.

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