1. Virtual & digital goods direct taxation doesn’t belongs to EU competence. direct taxation doesn’t belongs to EU competence. indirect taxation belongs to EU competence and most of its legal regulation is based on imperative legal principles. indirect taxation belongs to EU competence and most of its legal regulation is based on imperative legal principles. Sixth Council Directive of VAT (77/388/EEC) the scheme of levying VAT on electronically-provided services.

2. Virtual & digital goods Virtual goods are goods that, under traditional trade, were delivered by way of a physical medium (e.g. software on discs, music on CD, movies on tapes) but today may be transferred by electronic means without the use of any medium.

3. Goods & services Supply of goods shall mean the transfer of the right to dispose of tangible property as owner. (VAT directive 5 art.) Supply of services shall mean any transaction which does not constitute a supply of goods (VAT directive 6 art.)

4. Goods and services in electronic commerce taxation Subject of traditional commerce Subject of electronic commerce GoodsServicesGoodsServices Material form All virtual goods

5. Goods & services ??? = goods (USA, Japan, World Information Technology and Services Alliance – WITSA ). ??? = services (EU).

6. Electronic services supplied by electronic means 1. Services should be supplied by Internet or other electronic networks; 2. Services nature should depend on information technology.

7. EU membersStandard VAT rate (%) EU membersStandard VAT rate (%) Ireland21Lithuania18 Austria20Luxembourg15 Belgium21Malta15 Czechia22Netherlands19 Denmark25Portugal19 United Kingdom17,5France19,6 Estonia18Slovakia23 Greece18Slovenia19 Spain16Finland22 Italy20Sweden25 Cyprus15Hungary25 Latvia18Germany16 Poland22

8. Sales and use tax (USA) "throw-back" rule (this rule would source the sales back to the state of origin (i.e., the vendor's location) in the absence of sales destination information. Considerations of administrative ease support this approach, but it raises policy problems because states without a sales tax could become tax havens for online and other remote sellers)

9. Sales and use tax (USA) "throw-around" rule (Under this rule, sales without readily available destination information would be pooled and allocated to states (for purposes of imposing a sales or use tax on the sales) that impose a sales tax on an agreed- upon allocation formula. Administratively speaking, this approach creates more difficulties, but it does not create disincentives with respect to vendor behavior (i.e., no jurisdiction becomes a "haven" for sales tax purposes) )

10. Bit tax

11. Anonymity of transactions National Tax Association (US) The Real Time Tax Administration System: Functions: Administration of sales and use tax collection; Administration of sales and use tax collection; Remittance functions (taxability determination; selection of tax rates; remittance to appropriate tax jurisdictions, appropriate reporting). Remittance functions (taxability determination; selection of tax rates; remittance to appropriate tax jurisdictions, appropriate reporting).

12. Anonymity of transactions National Tax Association (US) The Aims for the Real Time Tax Administration System: The Aims for the Real Time Tax Administration System: - relieving vendors of the burden and the corresponding liability for tax collection duties; - the state tax administrators would retain control of the technology.

13. Anonymity of transactions National Tax Association (US) The obstacles for The Real Time Tax Administration System: The obstacles for The Real Time Tax Administration System: - the technology is not available today; - the system's complexity renders this solution too costly to develop; - the system would in any event contain numerous flaws. - consideration of such a proposal was premature at this time.

14. OECD black list of tax haven countries Andorra, Anguilla – Overseas Territory of the United Kingdom, Antigua and Barbuda, Aruba – Kingdom of the Netherlands, Commonwealth of the Bahamas, Bahrain, Barbados, Belize, British Virgin Islands – Overseas Territory of the United Kingdom, Cook Islands – New Zealand, The Commonwealth of Dominica, Gibraltar – Overseas Territory of the United Kingdom, Grenada, Guernsey/Sark/Alderney – Dependency of the British Crown, Isle of Man – Dependency of the British Crown, Jersey – Dependency of the British Crown, Liberia, The Principality of Liechtenstein, The Republic of the Maldives, The Republic of the Marshall Islands, The Principality of Monaco, Montserrat – Overseas Territory of the United Kingdom, The Republic of Nauru, Netherlands Antilles – Kingdom of the Netherlands, Niue – New Zealand, Panama, Samoa, The Republic of the Seychelles, St Lucia, The Federation of St. Christopher & Nevis, St. Vincent and the Grenadines, Tonga, Turks & Caicos – Overseas Territory of the United Kingdom, US Virgin Islands – External Territory of the United States, The Republic of Vanuatu.

15. Special Scheme for Tax Arrangements Applicable for Electronically Supplied Services It shall be applied only to those services which are electronically supplied by the non-established taxable person within the Community to non-taxable persons of different Member States. Therefore this scheme could be used by the suppliers of electronic services in USA, Japan, Russia, Australia, etc. Electronic service provision - business to consumer (B2C) Services supplier place Buyer place Taxation place Non EU member state LithuaniaLithuania

16. business to consumer A vendor trading in the EU (as well as in Lithuania) shall proceed under the information provided by the natural person. Therefore there is a possibility for a natural person to provide inaccurate information by giving a wrong country of residence. Way to identify the buyer