VAT IN DIGITAL ELECTRONIC COMMERCE

Sa？etak The dynamics of economic and technological development incur permanent changes in taxation on VAT. Cross-border e-commerce has the potential to reshape and step up the European internal market for consumers through encouraging businesses to sell to consumers abroad and increasing consumer confi dence in cross-border purchases. While e-commerce has the potential to increase EU welfare substantially, it also faces a number of regulatory barriers in VAT system that block the realisation of this potential. We are at a critical turning point, when it is necessary to set the right foundations in the VAT system so that digital market can work without problems. Current legislation on VAT introduces uncertainty and ambiguity, which will most likely lead to disputes