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28 February 2001
Other news
International tax treatment of e-commerce
Representatives of Organisation for Economic Co-operation and Development governments have agreed on a number of important conclusions and recommendations that pave the way for greater certainty among businesses and consumers in relation to the taxation of electronic commerce. These conclusions and recommendations cover three main areas: international direct taxation, consumption taxes, and tax administration.
International tax treatment of e-commerce
Representatives of Organisation for Economic Co-operation and Development governments have agreed on a number of important conclusions and recommendations that pave the way for greater certainty among businesses and consumers in relation to the taxation of electronic commerce. These conclusions and recommendations cover three main areas: international direct taxation, consumption taxes, and tax administration.
Other news
International tax treatment of e-commerce
Representatives of Organisation for Economic Co-operation and Development governments have agreed on a number of important conclusions and recommendations that pave the way for greater certainty among businesses and consumers in relation to the taxation of electronic commerce. These conclusions and recommendations cover three main areas: international direct taxation, consumption taxes, and tax administration.
On income taxes, a broad consensus has been reached on the interpretation of existing permanent establishment rules that are fundamental for deciding where profits on the conduct of e-commerce can be taxed. In short, a website cannot, in itself, constitute a permanent establishment, nor does a website hosting arrangement. An Internet service provider normally will not constitute a dependent agent of another enterprise, while the place where equipment, such as a server, is located may in certain circumstances constitute a permanent establishment: this requires that the functions performed at that place are significant as well as an essential or core part of the business activity of the enterprise. It is now necessary to clarify the tax treaty treatment of various types of e-commerce payments on the basis of a report just received from a business/government advisory group set up to examine this issue.
In the area of consumption taxes, significant progress has been made towards identifying pragmatic ways of achieving the desired result of effective taxation in the place of consumption. In the area of tax administration, Organisation for Economic Co-operation and Development governments have reached agreement on the main administrative challenges facing tax administrations, and on the sort of responses to consider. They are now inviting public comments on their proposals, in respect of consumption taxes and tax administration.
Details of the Committee's conclusions and recommendations can be found on the Organisation for Economic Co-operation and Development's website at www.oecd.org/daf/fa.
(Source: Organisation for Economic Co-operation and Development news release dated 12 February 2001.)
International tax treatment of e-commerce
Representatives of Organisation for Economic Co-operation and Development governments have agreed on a number of important conclusions and recommendations that pave the way for greater certainty among businesses and consumers in relation to the taxation of electronic commerce. These conclusions and recommendations cover three main areas: international direct taxation, consumption taxes, and tax administration.
On income taxes, a broad consensus has been reached on the interpretation of existing permanent establishment rules that are fundamental for deciding where profits on the conduct of e-commerce can be taxed. In short, a website cannot, in itself, constitute a permanent establishment, nor does a website hosting arrangement. An Internet service provider normally will not constitute a dependent agent of another enterprise, while the place where equipment, such as a server, is located may in certain circumstances constitute a permanent establishment: this requires that the functions performed at that place are significant as well as an essential or core part of the business activity of the enterprise. It is now necessary to clarify the tax treaty treatment of various types of e-commerce payments on the basis of a report just received from a business/government advisory group set up to examine this issue.
In the area of consumption taxes, significant progress has been made towards identifying pragmatic ways of achieving the desired result of effective taxation in the place of consumption. In the area of tax administration, Organisation for Economic Co-operation and Development governments have reached agreement on the main administrative challenges facing tax administrations, and on the sort of responses to consider. They are now inviting public comments on their proposals, in respect of consumption taxes and tax administration.
Details of the Committee's conclusions and recommendations can be found on the Organisation for Economic Co-operation and Development's website at www.oecd.org/daf/fa.
(Source: Organisation for Economic Co-operation and Development news release dated 12 February 2001.)
