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12 Dec 2000, Netherlands

Dear Dr. Ecommerce:

I'm a tax law student at the University of Amsterdam and I'm currently studying the Proposal for a COUNCIL DIRECTIVE amending Directive 77/388/EEC as regards the value added tax arrangements applicable to certain services supplied by electronic mean.

This proposal deals with the selling of software over the internet which is delivered by download. I'm specially interested in chapter 3.1 "obligations faced by businesses" :

"Where the recipient is a private consumer or is established outside the Community, a decision will be required on the jurisdiction for tax purposes. If on the basis of the information available, it can be reasonably determined that the place where the recipient is established is outside the Community, then no tax should be charged. Because of the manner in which on-line e-commerce functions today, some concerns have been expressed about the capacity of operators to access this information as the data profiles exchanged were not designed for this purpose."

In my opinion the data profile exchange can be used for establishing country of origin of the website customer. IP address investigation is in my opinion a possible solution to this problem. My feeling is that there are technical solutions to these problems.

My first question for you is : do you know of online discussion groups where this new proposal is discussed?

My second question is : do you know if in fact the European Commission examined technical possibilities to solve problems like "the country of origin" problem ?

I hope you can answer my questions. I would like you to publish my name and e-mail.

kind regards,

Jeroen Scheerhout
jeroen.scheerhout@student.uva.nl

Dear Jeroen:

I know there are a number of discussion forums which discuss legal issues. There are probably even forums that discuss VAT issues. I can only recommend, however, our own Euro E-Law discussion forum which specifically focuses on discussing European law applicable to e-commerce. You can join by sending a blank email to EuroElaw-subscribe@topica.com. The list has been quiet lately and your questions might well help liven it up.

Yes, the European Commission has examined technical possibilities to determine the place where the recipient is established and the feeling is that only about 90% accuracy can be guaranteed. That's not bad, but it's far from perfect. Incidentally, the address of the credit card holder is considered the most accurate method of locating the purchaser.

Good luck,

Dr. Ecommerce