Taxation Of Electronic Commerce Research Articles

Legal regulation of internet trade in Ukraine: problems and directions of improvement

The purpose of the article is to study the legal regulation of Internet commerce in Ukraine, the development of the e-commerce market, the analysis of the experience of taxation of the income of e-commerce entities, the identification of gaps and the provision of proposals for improving legislation in this area, the possibility of adapting its individual legal norms in Ukraine to international standards. The methodological basis of the article is the system of general scientific methods of cognition, scientific induction and deduction, the method of comparison, synthesis and abstraction. The article also uses general scientific methods of research and special methods of scientific and legal knowledge: creative-critical, descriptive-analytical, historicism. Scientific novelty. The directions of the development of e-commerce have been determined, the experience of taxation of the income of Internet trade subjects in the leading countries of the world with the possibility of adapting its individual elements in Ukraine has been analyzed. Attention is focused on the system of priorities of both the world's leading countries and Ukraine, and the importance of issues of legal regulation of electronic commerce is emphasized. The article is devoted to the problems and directions of improvement of the legal regulation of Internet trade, it is noted that Ukrainian legislation goes far beyond the borders of one country, and therefore it is necessary for the world community to focus on the unification and harmonization of legal norms. This makes it possible to apply a single legal regime regarding the legislative regulation of this sphere of business. The results. The rapid development of electronic commerce is taken into account, definitions of the main concepts and rules in the field of Internet commerce used by international organizations are given. It is indicated that such normative acts have a framework, advisory nature and are intended for use by states as a basis for the development of national legislation in Internet trade. The article examines the peculiarities of consolidation and unification of legal regulation of Internet trade at the regional and national levels. Ways of implementing legal mechanisms for stimulating and developing the e-commerce system of Ukraine in modern economic conditions are presented. Practical significance. The active development of the sphere of Internet trade in Ukraine is pointed out and the issue of improving the taxation of income from this sphere is considered, the European experience of taxation of electronic commerce is considered, where the value added tax is the main one. The article examines the legal nature and content of consumer rights protection on the Internet. The main norms that must be observed by the seller of goods are analyzed. The judicial practice of cases in the field of consumer rights protection in Internet trade is considered.

Taxation of Electronic Commerce: Federal Income Tax Issues in the Establishment of a Software Operation in a Tax Haven

The advent of the Internet and other electronic means of conducting commercial transactions has created a new galaxy of ways to structure business operations and a concomitant range of novel tax issues. It is commonly said that, because of the diminished need for a vendor to have a physical presence in the country of the customer, one of the likely effects of electronic commerce will be to shift revenues away from source jurisdictions and towards residence jurisdictions. In fact, this may be only partially true. Income may be shifted away from the customers' countries all right, but into a tax haven jurisdiction rather than into the enterprise's home jurisdiction. A major issue for enterprises that use the Internet and their residence tax jurisdictions, therefore, will be whether controlled foreign corporation or similar legislation will operate to impose tax on any revenues that are shifted in this manner.The purpose of this paper is to consider how a hypothetical business operation structured to operate in a tax haven might be treated under United States federal income tax law, both under provisions taxing income at the source and under provisions taxing U.S. persons on tax haven income of foreign corporations, and then to reflect on what, if anything, this tells us about the need for change. Because the Internal Revenue Service has issued a regulation discussed below, specifically characterizing income derived from transactions in computer software (and not other types of transactions in electronic commerce), the paper will focus on a company delivering software over the Internet; but many of the issues presented will arise in the case of other Internet providers.

Problems of legal regulation of taxation of electronic commerce

One of the most pressing issues in modern tax law is the solution of the issue of taxation in the field of electronic commerce. Currently, in the world practice of national states and economic unions of taxation, a number of methods have been formed related to the development of a tax mechanism in this area.An analysis of the scientific literature, as well as domestic and international legislation, indicates that attempts are being made to legally regulate the term “electronic commerce”, as well as to determine the types of taxes applicable to it. The most common taxes in international tax practice are VAT and the tax on goods and services. The Russian Federation also uses VAT in this area in the implementation of electronic commerce.

Tax aspects of the Eurasian economic integration

A general trend in the development of the tax policy of the EAEU countries has been the implementation of measures aimed at reducing the tax burden for small and medium-sized businesses. But the harmonization processes cannot proceed at a fast pace due to the existing features of the tax systems of countries seeking to unite. These are, first of all, differences in the tax laws of the Member States of the Union, and secondly, macroeconomic indicators differ quite strongly. The article analyzes the income, expenses and surplus (deficit) of the republican budget of the EAEU member countries and identifies their main differences. The study revealed that the EAEU countries have different approaches to administrative-territorial division and have different tax rates. In addition to the above, the tax systems of the EAEU countries differ in their approaches to direct and indirect taxation, and the composition of taxes collected differs. Much attention is paid in the article to the rapid development of information and communication technologies (hereinafter – ICT) and, in connection with this, the emerging need for the transformation of taxation in the digital economy. The main problems in the taxation of electronic commerce are identified and the need for the development of new technologies to identify transactions in cyberspace is substantiated. The author notes that the imperfection of the tax legislation of the EAEU member states in terms of regulating the taxation of e-commerce is also a significant obstacle in this area. In conclusion, the article provides an overview of measures aimed at resolving issues related to improving the efficiency of e-commerce administration. Issues related to setting a minimum cost threshold are subject to resolution, the procedure for administering VAT for transactions in B2B and B2C formats needs to be improved, and much more. Moreover, it should be borne in mind that the fiscal effect should be higher than the cost of administering this process.

Legal Models of IT Taxation

The article is devoted to analyze legal models of IT taxation in the advanced countries of the world. It is determined that the main way of selling the results of IT-activities is electronic commerce. The article analyzes the basic definition of electronic commerce. The author uses the anthroposociocultural approach in tax law as the basis of the methodology of the study of the problems posed. This approach allows us to see the taxation problems, in particular electronic commerce, including the local level from a new point of view. Author analyzes the model of minimal intervention and the model of hard regulation as two main models of IT taxation. The author pays special attention to the analysis of the legal regulation of electronic commerce taxation in Switzerland as a country-standard of local taxation. The article defines the main levels of taxation in Switzerland and outlines the benefits of using such a system of legal regulation of taxation. The author observes American and European models of legal regulation of electronic commerce. The link of the necessity of taxation of electronic commerce and the observance of the human right to taxes is revealed in the article. The article includes the analysis of the advantages and disadvantages of legal models of electronic commerce taxation used in the advanced countries. The conclusion is drawn about the main advantages of using the experience of the legal model of hard regulation of IT taxation in Ukraine.

The Electronic Commerce Bill and the Integrative Adaptation Model of E-Commerce Regulation and Taxation

Two important developments have recently taken place in Israeli laws regarding the Internet. The first is of a legislative character, regarding the Electronic Commerce Bill of 2008 that seeks to regularize certain aspects of the civil law with regards to the electronic world; the second development regards the ruling in the case of Rami Mor (CCA 4447/07 Rami Mor v Barak ITC (1995) HaHevra LeSheruity Bezeq Beinleiumiim (Mar. 25, 2010)), whose majority opinion could be considered to grant a complete and total defense to the anonymity of the internet user and her freedom of expression, and granted complete immunity to a potential offender who sullies another's reputation. In the following I shall criticality discuss issues arising from these developments. It is my position that both the Israeli regulator and Supreme Court have failed to fulfill their respective duties with regards to the development of regulations and settling disputes arising from internet law. This creates a gap between the law as it stands today and the modernity of life on the internet, which indicates the Israeli legal system is significantly lagging behind in comparison to more advanced legal systems, and poses a challenge to certain fundamental rights. I will base myself upon the two aforementioned developments to outline the theoretical basis for Internet regulation and propose a separation of powers model between the legislature and the judiciary. The thesis proposed is one which maintains the imposition of legal regulations on the Internet should be done by the integrative measures of new legislation and case-law development drawing upon other branches of law in search for applicable and existing judicial doctrines. I implement the thesis proposed in this article on the Electronic Commerce Bill, and propose a classification and outline for each of the issues that it arouses. I further apply the thesis extensively with regards to the taxation of electronic commerce and an integrative model for national and international taxation of electronic commerce. The model proposes a four-prong approach to taxation: First, it considers the development of residence and classification of income rules by case law; Second, it revisits the need for a revision of classification of legislative income rules; Third, it explores the use of technology to ensure enforcement of tax law and Fourth, it discusses the need for securing an international consensus and convention of a treaty.

ПРОБЛЕМИ ОПОДАТКУВАННЯ ЕЛЕКТРОННОЇ КОМЕРЦІЇ

The article analyzes the concept of the model on income and capital, revealed problems of the modern system of taxation of electronic commerce. So in an era of active development of information technology, the Internet exacerbated the problem of international taxation related to the erosion of revenue source countries, the negative effects of competition. Explain the principle of taxation in the context of e-commerce, which are based on the definition of the place of effective management of a permanent establishment. An important factor in the taxation of e-commerce is a characteristic of income that allows income classified according to criteria such as source of income (know-how, the provision of services), provision of services or purchase of property. It was found that the basis of harmful competition is a tax haven, preferential system. Coordinated and sustained global policy in the context of e-commerce is an important response to the problems of management of revenues. Taxation of electronic commerce should be straight in the administrative framework is not changed and non-discriminatory.

Taxation of Electronic Commerce and Developing Countries

The focus of this chapter will be to assess the potential impact that electronic commerce can have on the tax base of developing countries. The analysis will be done against the background of the existing rules on international taxation. Even before the advent of electronic commerce, the existing principles on international taxation have been lopsided in favour of the developed countries. Therefore, in analyzing the potential impact of electronic commerce on the tax base of developing countries, it is essential to come up with an appropriate model that will suit the peculiar circumstances of most developing countries. The fact remains that most developing countries are importers of digital products from developed countries. This means that, businesses based in these developed countries, can derive lots of profits from consumers of digital products in developing countries but these foreign businesses can escape taxation because the emergence of the internet has made it unnecessary for them to have permanent establishments in these developing countries.In order to prevent a situation akin to that of the interstate taxation of electronic commerce within the United States from happening in developing countries, it is necessary for developing countries to come up with proactive and creative strategies to protect their tax base from further erosion. It is suggested here that the best way to do that is to shift the focus from taxation of incomes and profits derived from electronic commerce to one based on consumption taxation.

Keeping up with the Digital Economy

The Malaysian Inland Revenue Board released its first set of Guidelines on Taxation of Electronic Commerce on 11 March 2013. In this article, the authors critically analyse the guidelines and discuss how they compare against OECD guidance on the relevant issues.

Electronic Commerce Taxation: Should Electronic Commerce Be Taxed?

Electronic Commerce is a new marketplace that has many advantages. With the help of the internet, electronic commerce has made a major difference in the way business operates globally, offering substantial benefits to all parties: businesses, consumers, and even governments.The electronic commerce taxation is a very sensitive subject that might affect the relationship between nations. Theoretically, jurists divided into two groups on whether electronic commerce should be taxed or not. That is part one of this paper. The paper also examines electronic commerce taxation of physically and digitally delivered products. Additionally, the paper provides a study of electronic commerce taxation in two international organizations; the WTO and the OECD. Furthermore, the paper studies electronic commerce taxation in the U.S, E.U, and some Developing Countries including the UAE.

Direct Taxation of Electronic Commerce in Spain

The most important tax issues relating to electronic commerce concern international taxation. In the direct taxation area these include the determination of the residence of the taxpayers involved, the controversial application of the permanent establishment concept, and the classification of the income obtained. This article addresses these issues as a follow-up to an article on indirect taxation and electronic commerce published in the April 2011 issue of European Taxation.

Tax Benefits of E-Commerce in China

E-commerce developed to become an important part of the economy should be considered the beginning of the taxation of electronic commerce. But e-commerce should be given tax incentives, this offer should be based on encourage certain behaviors and commodity.

Problems in the international field of taxation of electronic commerce

Bilgi ve iletişim teknolojilerinde yaşanan gelişmeler hayatımıza birçok konuda yenilikler getirdiği gibi ticaret konusunda da birçok yeniliğe ve değişikliğe yol açmıştır. İnternetin gelişmesiyle birlikte İnternet üzerinden gerçekleştirilen ticari faaliyetler artmış ve elektronik ticaret kavramı daha çok duyulmaya başlanmıştır. E-ticaretin yaygınlaşmasıyla birlikte bu ticaretin vergilendirilmesinde sorunlar ortaya çıkmaya başlamıştır. Bu çalışmada, elektronik ticaretin vergilendirilmesinde uluslararası alanda yaşanan sorunlar üzerinde durulacaktır.

Taxation of Electronic Commerce: Prospects and Challenges for Nigeria

Globally, taxation is a vexed question, and taxing electronic commerce creates additional challenges. This notwithstanding, electronic commerce holds tremendous potentials as a formidable source of governmental revenue in the light of globalization and increasing automation of commercial transactions in Nigeria. National and states tax authorities are struggling to find mechanisms to collect the anticipated significant revenues derived from taxing e-commerce profits because the existing regime was set up to handle exchange of only physical goods and services. In some cases, they are even entirely oblivious of the prospect of revenue flow from such a source. Currently, e-commerce transactions in Nigeria largely escape taxation even though their live transaction counterparts are almost always subject to some form of state or federal tax. This has touched off a lively debate about how to extend tax liability to e-commerce in ways that are in parity with offline taxes; whether sales taxes should be restructured or replaced; and even whether e-commerce should be tax-free. Although the challenges are universal, the peculiar problems of deplorable infrastructural deficiency, obsolete legislations, lax implementation of existing laws, hydra-headed corruption as well as widespread ignorance make taxing electronic commerce all the more intriguing in Nigeria. Added to these is the sophistication and complexity of the technology involved in such transactions. The modest ambition of this research work is therefore to describe and evaluate the main issues involved; analyze the legal challenges posed by cyberspace transactions that defy traditional conceptions of trade. The tremendous benefits accruable to the nation will equally be identified. It will be demonstrated that whilst information and communications technology’s efficiencies certainly allow some (perhaps many) activities to be coordinated online, all enterprises still need to have real, and not virtual, people, assets and business operations. The intended outcome is a comprehensive framework for the taxation of e-commerce profits that incorporates (with necessary modifications) traditional international tax principles since it is clear that any reform will require significant international cooperation. Flowing from all these will be a realization that taxing e-commerce is not necessarily harmful to Nigeria as a developing and technology importing country and that, it is indeed in our best interest to do so in order to boost government’s revenue drive and to procure requisite manpower as well as technology in line with global trend. Accordingly, Chapter I will focus on preliminary considerations and foundational understanding of the concept. The second chapter probes deeper into the dynamics of e-commerce – its nature, taxation challenges and other allied issues. The thrust of Chapter III is the international dimension of the discourse on taxation of e-commerce. The last chapter shall be devoted to analyses of indices to be considered in the formulation of a legal framework for e-commerce taxation.

E-commerce and the Future of the State Sales Tax System: Critical Issues and Policy Recommendations

This article examines the issues associated with the taxation of electronic commerce in the United States. It outlines the scope of the debate surrounding the taxing of electronic commerce. There is a discussion of the difference between sales and use tax collection. The important court decisions and their impact on taxing electronic commerce are outlined. The arguments for and against taxing electronic commerce are presented. The estimated state economic losses resulting from not taxing Internet sales are shown. The major reforms that have been initiated to address this tax policy issue are alluded to. The conclusion of this article indicates that a major overhaul of the states' sales tax system is necessary to bring it into the 21st century, since it was created before the arrival of the Internet.

A Consumer's Perspective on the Use Tax and Electronic Commerce

ABSTRACT Taxing electronic commerce is one of the most contentious tax policy issues facing state governments in the 21st century. This article focuses on tax compliance and the reaction of consumers towards taxing electronic commerce sales. Most of the existing work has focused on state governments and how they are responding to this tax policy issue. The key question asked in this article is “if a sales tax were charged on online purchases, would consumers buy less?” This study uses a national survey and found that nearly 50 percent of consumers who purchase online would buy less if a sales tax were charged for online purchases. Controlling for other factors, individuals who agreed that they would purchase less were more likely to be male, married, very social, have more years of online experience, and heavy spenders on purchasing goods or services on the Internet.

Optimal Commodity Taxation of Traditional and Electronic Commerce

This paper examines theoretical arguments supporting preferential sales tax treatment of electronic commerce, using a version of the standard optimal commodity tax model that includes distributional concerns, tax-exempt goods, a subset of individuals with highly elastic demand for Internet goods (which are close but imperfect substitutes for similar goods sold by traditional retailers), and relatively high administrative costs of taxing electronic commerce. The analysis concludes that tax exemption of electronic commerce is unlikely to be even close to optimal, with the optimal tax differentials calculated suggesting that the traditional prescription of uniform taxation of traditional and electronic commerce should not be overridden by optimal taxation concerns.

Electronic Commerce and the State Sales Tax System

This article examines the relationship between electronic commerce and the U.S. state sales and use tax system. A framework of a high-quality tax system is used in this study, and it is applied to taxing electronic commerce sales. The first part of this article analyzes nine principles of an effective tax system and divides these principles into the categories of adequacy of revenue, fairness of revenue, and management of revenue. In the second part of this article, these principles are tested to determine what impact electronic commerce taxation has on an effective revenue system. The results of these initial tests suggest that taxation of electronic commerce was associated with fairness in the tax system. In particular, the results suggested that states that had fairer tax systems were more likely to rely less on a sales tax and more on taxing Internet access. Management and adequacy of the revenue systems of states were not found to have a significant bearing on taxing electronic commerce. These results reinforce the existing public finance and legal theories that argue that the sales tax is not a fair revenue stream and that it should be reevaluated, especially in light of the contentious issue of taxing electronic commerce.

Consumption Taxation in a Digital World: A Primer

The paper reviews the economic and administrative issues that arise in the taxation of electronic commerce; addresses how best to meet the criteria of an ideal tax system; and examines recent policy developments. It is argued that destination-based taxation - as is presently the norm for goods taxation - is technically more complex for digital products and intangible services sold over the Internet, reflecting the difficulty of determining the location of the buyer and seller. Most of the potential solutions to this problem require a great deal of administrative cooperation between national tax authorities. Case studies of several countries show that policy responses to electronic commerce have differed, with the European Union taking the lead on implementing a system of destination-based registration.

Taxation of e‐commerce in Hong Kong: applying UK and US experience

Due to the rapid growth of electronic commerce worldwide, the traditional approach of taxing business profits in Hong Kong, a source‐based common law jurisdiction, warrants a close review as to its compatibility with such a modern way of doing business. Although the Inland Revenue Department of Hong Kong has issued its views on the taxation of electronic commerce profits as Departmental Interpretation and Practice Note 39, much of the treatment of such profits follow the conventional wisdom of taxing business profits as set in the source‐based rules. This paper reviews the present situation of taxing profits arising from electronic commerce transactions in Hong Kong and compares it with the cases of the UK and the USA. Problems in formulating water‐tight tax law, accounting standards for intangible assets, and coping with cross‐border fraud, indicate that progress may not be straightforward. Issues as to fairness, and the difficulty of taxing such receipts are raised, followed by recommendations.