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By Felicity Ussher, 17 December 1999 00:30

NEWS After months of denying that software could collect taxes online, HM Customs revealed today that it is working with the OECD to develop a system to do just that. David Holmes, a team leader at HM Customs' process and supply division, sits on the OECD's technology working group - TAG - along with other customs authorities. He is investigating technological solutions that could distribute VAT across Europe at different rates, from a single European registry. Holmes told Silicon.com: "IT people in the business sector tell us that things like this can be done." A single European VAT registry would normally require member states to harmonise their VAT rates, which most governments are loathe to do. The other option - namely numerous national registries - would be off-putting for foreign suppliers, especially US businesses that are not subject to VAT. But the OECD group has potentially solved this dilemma. They have already identified at least three possible models for a single IT system which would take into account the different VAT rates of the various European countries. "We'd be more than happy with a technical solution which ensured VAT was collected accurately from US companies selling into Europe," Holmes continued. Cisco, EDS, IBM, ICL and Microsoft, among others, are members of an EeTG (European ebusiness Taxation Group) sub-group devoted to technology. Their co-ordinator, Olivier Boutellis who is also a partner at PricewaterhouseCoopers, commented: "They are currently working as a group to look at how an IT solution would be used. Later, they will look at the details of what that IT solution will be." TAG members have not yet settled on a software supplier, but the EeTG is poised to approach them before the OECD summit in February.