Under a new law that has been passed in the EU from July 1st 2003 any internet based company selling services or goods to customers inside the EU will have to pay the member state of their customer/client the equivalent V.A.T (Value Added Tax) Rate.
This in itself is not a big problem, online business have been paying taxes for many years, the problems start to occur when you take a look at the current state of the V.A.T system in the EU state members on an individual basis.
The following list shows the percentage of V.A.T that you will need to add to your clients bills if they are located inside a member state of the EU:
Austria - 20% VAT
Belgium - 21% VAT
Denmark - 25% VAT
Finland - 22% VAT
France - 19.6% VAT
Germany - 16% VAT
Greece - 18% VAT
Ireland - 21% VAT
Italy - 20% VAT
Luxembourg - 15% VAT
Netherlands - 19% VAT
Portugal - 17% VAT
Spain - 16% VAT
Sweden - 25% VAT
United Kingdom - 17.5% VAT
http://thewhir.com/features/euro-vat.cfm