eBay said it will begin to collect VAT on seller fees beginning July 1, 2003. New regulations in the European Union require the collection of value-added taxes (VAT) on digital services, according to the announcement.

"We are working with tax authorities to clarify our obligations under these regulations and to determine how best to handle these taxes on our platform. These taxes apply to all seller fees paid to eBay, including insertion fees and final value fees, by sellers who reside in the European Union. Business sellers who have VAT registration numbers will not be charged VAT on eBay fees."