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What is the definition of a digital service?
It is established that the following elements together form a digital service:
- A service (i.e. not goods)
- Delivered via the internet, or an electronic network
- Supply is essentially automated, or involves only minimal human intervention
- It is impossible to ensure in the absence of information technology
There is also an additional condition, which is not explicitly stated in the EU VAT legislation, but can be extracted from existing EU VAT case-law:
- Supply is made for consideration (i.e. for payment)
The list of digital service providers affected include, but is not limited to, the following:
- Digital services and subscriptions
- Games, gambling games, and e-books
- Software and software upgrades
- Websites, hosting, VoIP and content
- Music, films, images and photographs
- Access to e-markets
- Distance teaching
More detail available on the Taxamo blog: Definition of e-services.