Article
International Direct Taxation and E-Commerce: A Catalyst For Reform?
NUJS Law Review
(2017)
Abstract
This article critically analyses the challenges e-commerce poses to the
traditional source- and residence-based taxation systems. It presents an
exploratory study of two fundamental taxation principles that apply to international
transactions in general and, more specifically, to e-commerce:
the choice of residence-based or source-based taxation in governing the tax
treatment of both domestic income accruing to non-residents and foreign
income accruing to residents; and use of permanent establishment (PE)
status in instituting the economic nexus required to assert jurisdiction over
tax business profits. It is argued that in the interpretation and application
of the rules, a clear distinction should be made between conceptual and
practical issues. While there may be overlap between them, distinct issues
exist regarding the normative questions of how and where profits arising
from e-commerce should best be taxed as a matter of principle, as well as
how such taxes should be implemented. The formulary apportionment of
income earned by e-commerce business based on an economically justifiable
formula provides a viable solution
Keywords
- International taxation,
- direct taxation,
- e-commerce,
- e-commerce taxation
Disciplines
Publication Date
Spring March 17, 2017
Citation Information
Subhajit Basu. "International Direct Taxation and E-Commerce: A Catalyst For Reform?" NUJS Law Review Vol. 10 Iss. 1 (2017) p. 19 - 48 Available at: http://works.bepress.com/subhajitbasu/89/