Faculty Scholarship 1994 - Present

E-Volving Strategies for Digital Commerce Taxation

Although there is worldwide agreement that global electronic commerce transactions are increasing almost exponentially in both number and dollars, there is somewhat less agreement about how such transactions should be taxed. The dilemma arises in attempting to establish a taxation framework that is at the same time acceptable to businesses, international organizations and the governments of individual countries. Recently, the EU published draft legislative proposals regarding the application of value-added tax (VAT) to certain products provided over the Internet. The legal and technical tax issues include defining taxable presence, classification of E-income; identification of taxpayers and the implications for collection and remission. This article provides an overview of the legislation, and frames the legal and business issues and provides assessment as to how they will be resolved. The analysis of the current environment suggests some conclusions and implications for both corporations involved in global e-commerce and government tax authorities.