New rules mean that any company wanting to sell VAT-free CDs or DVDs online or by mail order into the UK market will have to have a proper physical presence in the Island.
However, those companies already registered will be allowed to continue doing their business as no licences will be revoked.
But they may face being refused permission for new staff if they want to expand.
The Economic Development Committee has acted following criticism in the UK press and in Westminster that Jersey is being used by huge retailers like Tesco to avoid VAT on items that cost under £18.
