Proposal for online tax heard by EU

German finance minister Hans Eichel has proposed a VAT that can be used by all European countries to tax products bought on the internet.

Speaking at the European Union in Luxembourg he claimed that a common tax could be applied to all digital content such as software, music and videos downloaded from the web. A common VAT, he said, would avoid potential problems raised by the European Commission's proposal that non-EU member states use the tax of the country of their choice. At a meeting in June, France protested against this measure claiming non-EU countries would gain an unfair advantage by paying lower VAT on downloadable goods. Eichel's proposal is scheduled to be debated at an EC meeting on internet tax due to be held in November.