E-tax tops service companies' agenda

Taxation and self-regulation featured highly on the agenda of the European IT Services Association first British chaired meeting held this week in Geneva.

Mike Evans, first British president of EISA, started his two-year post by promising to turn the association into an "e-type" operation. "The association will be fast, glamorous and elegant, just like the motorcars made by Jaguar before Ford took over production. We will be a major player in the digital economy," he said.

Under Evans' rule, EISA, made up of the heads of the leading European software and services trade associations, will lobby European parliament and the European Commission on behalf of the IT industry.

He outlined the five key strategies the association would work on to promote European Internet interests.

These include working with the EU commission to produce standard job descriptions across Europe to achieve the free movement of labour and a guide to EU directives' impact on the IT industry.

However, the most difficult of these, said Evans, will be to develop closer links with the European Commission.

"We'll lobby in specific areas but the most difficult part will be talking about Internet law and taxation, or preferably a lack of it. There are already commonly held differences of opinion between EU members as well as between the EU and the US," he said.

According to Tim Conway, director of the Information Age Unit at the CSSA, one of the most contentious issues between the two bodies was the classification of taxation for goods and services.

He explained: "The US government thinks that music can be transferred electronically therefore is a good and should be treated under the dual agreement of tariff and trade and be subject to tax. But in Europe it is considered a service so should come under trade. The difference being that the service tax in Europe can be quite heavy but the goods tax light."

Conway claimed this could mean that books, which are ordered over the Internet from the US, would be subject to goods tax but those ordered from within Europe would be taxed as a service.

"The EU classification of services is premature and has a negative impact on
the European services industry," he said.