Extending VAT to e-Commerce: an implementation of EU proposals

To "webify" the VAT system in the European Union is clearly an issue, since the e-Europe initiative's intention is "to accelerate Europe's transformation into an Information Society". But this initiative poses new technological questions that cannot be ignored and are not easy to overcome. One of these questions is the security that such an initiative must conform to. Another one is to extend the reach of the current VAT collecting process to transactions involving digital goods transfered on the internet. We have answered most of these questions by designing and implementing the prototype of a software component that, by using a public key infrastructure, ensures both the secured registration of the entities involved and the calculation of the VAT in all cases, i.e. product or service transaction, with buyer or seller inside or outside the EU. We can therefore state that collecting VAT from the provisioning of goods or services through the internet in a secure way and involving more than one Fiscal Authority is possible with currently available technology. This work has been developed under EURESCOM projects PKI (P1001) and ICE-Commerce (P1004).