Europe Set to Begin Digital Tax

Unlike traditional trade transaction, e-commerce conducted online across national borders creates new tax issues that can be confusing. As Europe's number of internet users grows and overtakes the US and Canada, the European Union (EU) is scheduled to begin a new value-added tax plan, which will levy taxes on all imported goods and services purchased over the Internet. Foreign companies, especially the American ones, which have been aggressive in the European market, now face the hard task of keeping their business there when the bills go up. Many companies, however, say that the new tax is unlikely to keep them out of the lucrative European market, and will not be the only factor that they will take into account when evaluating the market. In order to maintain their profit margin companies might choose to headquarter their e-commerce operations in European countries with the lowest value added tax. – YaleGlobal