LUXEMBOURG, A MAGNET FOR INTERNET SERVICE SUPPLIERS?

Luxembourg may become a magnet for non-European electronic service suppliers because of its attractive rates of VAT, the lowest in the EU, according to auditors Pricewaterhouse Coopers. This would likely be one of the consequences of the draft Directive presented by the Commission on 7 June (see European Report No 2507 for further details), according to Robert Lejoly, head of Pricewaterhouse Coopers' Luxembourg office. This proposal aims to make electronic services supplied by a service provider established in a third country liable to VAT. Service providers would be required to register with the VAT authorities of an EU Member State. Electronic services supplied from third countries have until now been VAT exempt, whereas services originating in the EU are...