Businesses face a "complex and disproportionate burden" if a package of value added tax reforms is approved by Europe's finance ministers tomorrow, a professional services firm has warned.

Telecommunications companies, satellite broadcasters and digital service providers would be required to levy VAT in the country where services were consumed rather than where the company was based, according to the plans under discussion at tomorrow's Ecofin meeting. The proposal is designed to prevent the distortions that have led online businesses to flock to low-VAT countries, notably Luxembourg.