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Tech Buzz 10/03

How the Value-Added Tax affects your tech purchases; a new OS for Macs

This story appears in the October 2003 issue of Entrepreneur. Subscribe »

VAT Facts

It's official: The Value Added Tax (VAT) required for purchases made in the European Union (EU) now extends to non-EU companies. The VAT, which ranges from 15 to 25 percent, depending on the product and country the customer resides in, represents a substantial amount. If you have online business customers overseas, you'll have to collect the VAT for digital sales. That includes software downloads, paid content, online auctions, e-books, Web hosting and other electronic services. Details on enforcement are sketchy, but there are potential monetary fines for late VAT payments or nonregistration.

Fortunately, entrepreneurs don't have to register with each EU member state--only one is required. The UK Customs site simplifies the process by allowing you to sign up online at https://secure.hmce.gov.uk/ecom/voes if you choose the UK. Visit the EU's VAT site at www.eurunion.org/legislat/vatweb.htm for more on who is required to register and what items are covered by the new law.

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