March 2, 2000

1:26 PM

While we're still mulling over possible country-wide internet taxes in the states, the European Union is proposing a digital sales tax on any downloads of music, software, or videos from outside the Europe. It's just a proposal though, we'll have to wait and see if it actually goes through.
posted by mathowie (5 comments total)

And even if it does go through, it's a moot point as to how enforceable it might be. After all, given the legal precedents in the US which stop the levying of sales tax on out-of-state purchases, I can't imagine the EU being able to get US retailers to add VAT at point of sale. So what's left? Customs posts at the routers?

Even now, it's currently a toss-up when ordering actual packages from abroad as to whether you get charged duty and VAT on their arrival in the UK: books are tax-exempt, and some customs officers have still yet to discover that Amazon sells other things...
posted by holgate at 1:43 PM on March 2, 2000

I think it's easy to enforce....charge the retailer the amount, per item of whatever he buys wholesale.
The retailer can then claim back the amount of what they didn't sell.

That makes sense, right? (It's late here, watch for dodgy brain :-) )
posted by tomcosgrave at 3:31 PM on March 2, 2000

Let me get this straight...

The EU... wants to tax... non-EU businesses?

The whole point of a tax is to make individuals pay for government services they benefit from. How are businesses not located in the EU benefiting from EU government services?

Enforceable or not, it will backfire on non-EU consumers. This tax is a protectionist tax. By raising the cost of foreign (non-EU) goods, the competing companies in the EU will feel less competition, and therefore less need to improve their goods and lower prices. Look at what happened to the U.S. auto industry in the 1970s-80s.

These politicians need to go back to ECON101.
posted by vitaminb at 6:09 AM on March 3, 2000

And I need to go to ProofReading101.

That should read "...backfire on EU consumers."
posted by vitaminb at 8:41 AM on March 3, 2000

It's a tax, but the aim is to implement it as an import duty, as if you were attempting physically to bring things through customs.

And Tom... we're talking sales taxes here. If you can't enforce it state-to-state in the US, I really can't see it being enforceable on digital data crossing between nations.
posted by holgate at 3:00 PM on March 3, 2000