A US government report will call for formalisation of the principle that the trade in products transmitted electronically over the internet remains free of tax duties.
In July 1997, the US government declared it was opposed to taxation of e-commerce. The US will report to the World Trade Organisation on 19 February and will push for acceptance of the principle at its presentation.
The tax-free zone would apply to electronic products such as financial services, software and insurance, but not to anything purchased on the internet and then delivered by other means.
Dispute still remains over 'grey area' products such as music and films, which could be transmitted electronically. Some European countries have opposed the abolition of taxes in areas where they see the US seeking to sidestep regional taxation or swamping local culture with low-cost products.
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