§ Mr. GreenTo ask the Chancellor of the Exchequer what proposals he has for taxing usage of the Internet. [3325]
§ Dawn PrimaroloAccess to the Internet has always been subject to value added tax. Following a derogation from the Sixth VAT Directive to all member states agreed by the Council of Ministers on 17 March, legislation will be introduced in the UK with effect from 1 July 1997. The legislation, which covers a range of telecommunication services including Internet access, changes the rules governing where, for VAT purposes, the supply takes place. This will ensure fairer taxation where these services are supplied from one country to another. Further information on these changes is available in an Information Sheet issued by Customs and Excise titled VAT Information Sheet 2/97.