Un Value Added Taxation! (UK)

I remember paying about £5 VAT when I bought Basic4ppc.
... I was just about to buy b4a and saw the final price adding another lot of VAT on top ... Annoying.

Surely the Vendor (Erel) is outside the EU, so the British VAT inspectors are not in his vacinity. What's the law on this, it seems a very grey area?
The legislation I saw only mentions software sent on hard media (like CD's), and not downloads.

I previously downloaded some software from the U.S. and there was no VAT on that?

It's not a grey area at all. Software and other digital products downloaded by EU consumers are subject to VAT. VAT on downloads gets approval from EU, flak from US | Pinsent Masons LLP

Most of the download sites are registered for UK VAT and the equivalent in other countries and identify your tax regime from your IP address so you can't just say you are in another country (unless you use a proxy) to avoid VAT. Some smaller suppliers, illegally but they will never actually be prosecuted bcause they are outside the EU, don't do this so with them you can get away without VAT, or just pay US sales tax in some cases.

I am no expert on this, but my understanding is that the international law on VAT for electronically supplied products and services changed from 1st July 2003.

AFAIK non-EU suppliers of downloadable products must charge EU VAT at the rate that applies to the buyer (rather than the seller).

I personally hate the VAT system, it's a pain all round! However, I believe the process and charging used by Anywhere Software/Plimus is correct and they are just following the rules that apply.

The same thing should apply to a US business selling software or even web hosting directly. It's a bit of a mess and I don't know how well it really works!

Geoff.

(Edit - Andrew just beat me to the Post button! - and with a good link )