Without this extension, the rules for services supplied by
electronic means as well as to radio and television broadcasting
services would revert to those prevailing prior to the changes
introduced by the Directive. This would mean that EU suppliers
would be subject to VAT even for services supplied to clients
outside the EU and they would face competition within the EU from
suppliers in third countries that would not be subject to VAT at
all.
The proposal does not contain any other change.
Taxation Commissioner László Kovács said: “I urge the EU Council
of Ministers to rapidly reach an agreement on this extension as I
cannot imagine we would revert to the rules prevailing before the
E-commerce Directive was introduced."
