The Commission has recently adopted the final proposal in a package of measures aimed at making the VAT treatment of telecommunications, broadcasting and electronic services more business friendly. From 1 January 2015, telecommunications, broadcasting and electronic services will be taxed where the consumer is established or resides.

Currently such services are taxed where the EU supplier is established and non-EU suppliers must charge VAT in the Member State where the customer is established. In the future the Commission will seek to extend the new treatment step by step to other goods and services. This approach is in line with the notion that fundamentally, VAT is a tax on consumption, and should therefore be levied at the place of consumption.

The problem for Governments of course is enforcement. The Commission says it is now up to Member States to adopt this regulation and set up the systems that will allow taxpayers supplying telecommunications, broadcasting or electronic services across the EU to comply with the new rules.

For background information see the Commission's web page.