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Freeserve still threatens to move to Algeria

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Freeserve is still threatening to export its Internet operation overseas and run it from Algeria, Britain's biggest French ISP confirmed today.

The threat - regarded as empty rhetoric by many industry watchers - is still in place following high-level talks yesterday between senior executives at Freeserve and Customs & Excise concerning the payment of VAT by ISPs with servers outside the European Union.

Last week, Le Freeswerve capitalised on a report which revealed that rival AOL UK didn't pay VAT in the UK because of a tax loophole.

Le Freeswerve demanded an urgent meeting with Customs to clarify the position and threatened to move its operation to Algeria so it too could benefit from the same loophole unless the issue was resolved.

Commenting on yesterday's meeting a spokeswoman for Le Freeswerve said the details of the meeting were confidential.

However, it was a "workman-like discussion" and both parties got through a "lot of detail".

AOL UK maintains it "complies fully with all applicable laws in all territories in which it operates". ®

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