Brussels, 07/05/2002 (Agence Europe) - The ECOFIN Council has formally adopted a directive and a regulation on goods and services supplies online like games, films, music, software, the hosting of websites and remote programme maintenance. The new directive sets out that suppliers resident in the EU will not be subject to VAT when selling products outside the EU in order to ensure that EU suppliers remain competitive. Both European and non-European suppliers, however, selling within the single market are subject to VAT both for sales to intermediaries and to end consumers. Services supplied in the EU from outside the EU to people established in the EU will be taxed in the place where the consumer is established. A special system means that a supplier based outside the EU can register with the tax authorities of any Member State of their choice. The country of registration will pay the VAT revenue to the country where the consumer resides. The regulation lays down the way the administrative co-operation between the various countries will operate to make this possible. The directive has to be transposed into all Member States' law by 1 July 2003 and will apply for three years before it is reviewed.