stever - 3:33 pm on Dec 3, 2005 (gmt 0)

I am from Austria Europe and it's declared as income from non EU contries.

Also in Austria and fresh from a meeting with my tax advisor. His take on the matter:

1) Obviously this is taxable as income (and Adsense-related expenses are valid for deductions) in the normal way
2) Adsense publishers are NOT liable for Ust. (VAT for Brits) as it is an advertising service performed for a company outside the EU and, more specifically, outside the country. The only time that this would be relevant would be if your services were contracted by your local country-based search engine, or a local subsidiary of an international engine.