SlyOldDog - 5:17 pm on May 14, 2006 (gmt 0)

Even if the wholesalers don't charge local taxes on their margin they still need to apply the local sales tax (VAT) appliable in their jurisdiction unless:

1) They are in a tax fee zone

or

2) They are "exporting" the service in which case VAT may be possible to ignore. But the definition of an export is a bit hairy in this case. It's usually defined like that if the service is consumed somewhere else. There are so many interpretations of this it could go any way in court. I wouldn't like to play that game. In fact I provide a service like this and I pay the VAT because I am too scared not too.