introduction
impacts
byte tax
Australia
global
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impacts
This
page looks at impacts: what,
where and how to tax.
Astute US lawyer Lawrence Lessig, in Code
and Other Laws of Cyberspace (New York, Basic Books 99), writes about libertarian forecasts
of the withering of the state: "no government could survive without
the Internet's riches, yet no government could control what went on
there" and the everywhere-but-nowhere Web undermines traditional
revenue collection mechanisms.
As an article in the Economist
pointed out, "buy a novel from your local Manhattan bookstore and
you will pay a combined state and city sales tax of 8.25%. Purchase the
same book over the Internet from Amazon and there will be no tax to
pay."
Two bodies exploring Internet taxation and other issues are the US
Advisory
Commission on E-Commerce - a new government agency - and the
OECD's Taxation
& Fiscal Affairs Section, which is monitoring developments
at a national and international level.
US
The Advisory Commission was
established under the 1998 Internet Tax Freedom Act and so far has
served largely as a sounding board for the concerns of different
interests and lobby groups such as NetCoalition.com,
the Internet
Tax Fairness Coalition (ITFC),
the strangely named Global Information Infrastructure (GII),
the E-Fairness
Coalition (a "level playing field" for taxing retailers),
the Internet
Alliance ("premier organisation of policy professionals
representing the Internet online industry") and the Global Business
Dialogue for Electronic Commerce (GBDe).
A useful overview of US developments is
provided in the online briefing
by the bipartisan Congressional Internet Caucus.
Jonathan Ricci's 1999 Richmond
Journal of Law & Technology paper
on the IRS versus International Cyberspace Transactions is a
useful introduction to legal and technological challenges.
The US Treasury Department's November
1996 paper
on Selected Tax Policy Implications of Global Electronic Commerce
remains of value.
OECD
The OECD has recently released its progress
report on the development of a global e-commerce tax framework,
including treatment of consumption taxes, payment for digitised products
(eg music and software delivered online) and tax jurisdictions.
That
document builds on agreement at the 1998 Ottawa OECD conference on ecommerce,
with government
endorsement of arguments in the Electronic
Commerce: Taxation Framework report
that existing
taxation principles should apply to ecommerce (eg no 'byte taxes'),
there should be no discriminatory taxation, consistent standards for
cross-border taxation should be developed, consumption taxes should be
imposed at the place of consumption, and digitised products should not
be regarded as goods for consumption tax purposes.
legal frameworks
in Australia
The Australian Electronic
Transactions Act 1999 (ETA)
is perhaps the major achievement of the
national government's 'strategic framework for the information economy'
under the coordination of the National Office for the Information
Economy (NOIE). The
Attorney-General's Department has an e-Commerce
Homepage, primarily concerned with the Electronic Transactions
Act.
The Act reflects the 1998
Electronic
Commerce: Building The Legal Framework
report
from the Electronic Commerce Expert Group, an advisory body. The report embraced
electronic signatures, record keeping, contracts, the UNCITRAL model code
for ecommerce, and other matters.
and overseas
In Europe the European Commission late last year published a proposal
for a Directive
to "establish a coherent legal framework for electronic commerce
across the EU".
The proposed Directive - basic legislation for all
EU states - would complement the recently announced package
of Legislative Proposals for a new Regulatory Framework for
Electronic Communications, with directives on telecommunications
privacy, access and interconnection among others.
Information about the United Nations
Commission on International Trade Law (UNCITRAL) is
available on that body's website. For a perspective on the
negotiating process, the players and likely outcomes we recommend the
excellent Global Business Regulation (Cambridge, Cambridge
University Press 00) by John Braithwaite & Peter Drahos.
Another perspective on UN, OECD, WTO
and other proposals comes in the
controversial report
from the American Bar Association's major cyberspace law project.
The ABA has called for a global commission to set international rules
regarding taxation, banking, consumer protection, privacy, gambling and
other online activities.
next part (Byte Tax Proposals)
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