E-COMMERCE AND INTERNATIONAL TAXATION

El presente trabajo busca desarollar los aspectos más resaltantes de la fiscalidad de la asistencia técnica prestada por un no residente hacia el Perú, tanto en la legislación doméstica peruana, como en cuanto a su tratamiento en los CDI suscritos.

1. Introduction The relationships between taxation and technological developments have always been interactive, dynamic and complex. The current debate over taxation of e-commerce has, to some extent, been little more than a rehash of a similarly inconclusive scholarly and legislative debate that raged over mail-order sales during the 1980s. However, in the case of e-commerce, the added question is how to reconcile national fiscal boundaries with the borderless world of the internet. A government's authority to tax had always been based on territory and jurisdiction. These systems now face a serious challenge from development of e-commerce. The trade in goods and services over the Internet has fundamentally altered the accepted boundaries and conventions. Some of the concepts underlying the principles of international consensus on taxation were always flawed, but those flaws have become much more apparent with the advent of e-commerce. E-commerce makes the concepts of permanent ...

This dissertation attempted to examine the adequacy of the Electronic Transactions Act 2011 in governing e-commerce in Uganda with a case study of the online motor vehicle trade. The research questions focused on finding the legal challenges faced in e-commerce transactions in Uganda; assessing whether the e-commerce platforms being used in Uganda comply with the law and to propose reforms in practice and the law where necessary.
Using a qualitative research methodology entailing interviews and desk reviews of documents, websites and online resources, the research found among others that the legal challenges of e-commerce span from cyber frauds to goods not fitting their description, delays in delivery, challenges in cancellation, return and refunds, dispute resolutions, conflict of laws among others.
The legal challenges are saddled by other systemic challenges of lack of key infrastructure like electricity, internet connectivity being costly among others.
The research finds that the most of the online motor vehicle websites do not largely comply with the law, with key policies as privacy and data protection; cancellation, return and refund; payments of damages; provisions for alternative dispute resolution; delivery periods and other security measures falling short.
The dissertation concludes that the Electronic Transactions Act is not adequate in governing e-commerce in Uganda most especially it does not provide extensively for privacy and data collection, usage, retention and protection mechanisms. It further finds that even at a regional level, the legal and policy framework does not adequately address privacy and data protection concerns, cyber security mechanisms that require harmonization of regional laws to improve e-commerce at the region and national levels.

Le XXème siècle a été marqué par une évolution rapide des nouvelles technologies et de  l’internet  ainsi  que  l’émergence  d’une  nouvelle  forme  de  commerce,  le  commerce électronique.
Le commerce électronique et l’internet promettent de nombreuses opportunités mais présentent  des  défis  pour  l’ensemble  des  administrations.  Notamment,  la  fiscalité  du commerce  électronique  est  devenue  une  grande  préoccupation  des  institutions,  des  agences internationales et de beaucoup de gouvernements. Face à cette réalité, la Direction Générale
des Impôts malgache doit se préparer à mettre en place un cadre juridique et un système fiscal
adapté à cette nouvelle forme de commerce.
Ce  travail  a  pour  objectif  principal  d’offrir  des  perspectives  de  fiscalisation  de  l’ecommerce  à  la  DGI,  à  travers  une  analyse  des  enjeux  du  commerce  électronique  pour Madagascar.
Les  conclusions et recommandations présentées dans cette étude ont été tirées des  travaux  de  recherches,  résolutions  prises  par  les  institutions  internationales,  et  des pratiques mondiales existant en matière de fiscalisation du commerce électronique.
Ce  travail  soutient  la  thèse  que  le  commerce électronique  doit  être  imposé  comme toutes les autres formes de commerce pour ne pas créer des distorsions sur le marché. Donc, aucune nouvelle taxe spécifique ne doit être créée. En outre, des mesures comme l’adoption
des  lois  relatives  au  commerce  électronique,  l’amendement  des  textes  fiscaux  ainsi  que l’exploration de nouvelles techniques adaptées au contrôle des transactions électroniques sont proposées.

The objective of this contribution is to provide the OECD – with a view to designing the final 2020 Report-, the EU Institutions –projecting an eventual legislative action- and whatever States – considering or (re)considering unilateral measures in the field of taxation of the digitalized economy- with a decision-making list which could help to better calibrate pros and cons of the several available options (Digital PE, withholding taxes and Equalization Levies)

Duplicity is endemic in the international tax regime as each country tries to secure the best deal it can for itself.  Developed countries continue to demand standards from developing countries that they refuse to apply to themselves, the kind of thinking which has underpinned their standing in many areas of international relations.  For instance, while developed countries continue to condemn the financial services products of many developing countries, accusing them of promoting multinational abuse of the regime by facilitating aggressive tax strategies, developed countries have gradually reduced corporate income tax from the1980s as seen in countries such as France, Germany, Japan, United Kingdom and the United States.  The BVI is one offshore financial centre which has been at the forefront of this international condemnation. Despite lack of any legal foundation, hegemonic condemnation and unrelenting attacks against its financial services industry, globally, by blacklisting and threats of blacklisting in the developed world has forced the BVI to adopt measures and implement policies demonstrating its commitment to a transparent and cooperative offshore finance industry. Sceptics are of the opinion that the BVI continues to facilitate the aggressive tax planning strategies of multinationals and high net worth individuals to avoid paying what they deem to be the fair share of taxes of these multinationals and individuals. However, this is misleading as the last few years have shown. The establishment of its financial services commission, financial investigation agency, international tax authority, etc. and the regulations, policies and other initiatives adopted by these bodies demonstrates a clear commitment to transparency and cooperation in an effort to refute its “tax haven” categorization. The result is that today its industry is better regulated than similar industries in economies which dwarf that of the BVI.  Nevertheless, the territory has not received its due acknowledgement for all its efforts over the years to develop a highly regulated financial services industry, by creating numerous agencies to regulate the industry and training people to staff these agencies at considerable cost to the territory. The work done by agencies such as the FSC, FIA, ITA demonstrates a clear commitment to good governance, cooperation and transparency. Therefore, it can be said that the BVI surpasses its obligations vis-à-vis its foreign counterparts and condemnation of its financial services sector are largely unwarranted.  Thus, rather than condemn the BVI and other offshore financial centres like it, it is the OECD and other international organisations such as the EU, with more resources than the BVI, who should stop playing catch-up and seek to close the loopholes in the international tax regime, used by lawyers and accountants, to facilitate the aggressive tax planning strategies of high net worth individuals and multinational corporations, that border on tax evasion.

This study examines how tax sheltering and its interactions with cash effective tax rate, long-term effective tax rate, tax
savings, book tax gap, temporary difference of tax shelter and permanent difference of tax shelter impacted the modified
Jones earnings model (earnings quality manage-ment) from 2009 to 2016. The study used a sample of all 116 listed
companies on the Nigerian stock exchange ranging from all sectors excluding financial services sector due to its reporting
sys-tem. Preliminary analyses were also conducted, such as descriptive statistics and the correlation matrix. In analysing
the data, the study adopted panel multiple regression to identify the possible effects on earnings quality. We employed the
panel generalised method of moments regression be-cause we suspected there is a variety of moment conditions that are
deduced from the assumption of the theoretical model. The result shows that tax sheltering had a significant and positive
effect on the quoted the modified Jones earnings model (earnings management). We concluded that the cash effective tax
rate, long term effective tax rate, tax savings temporary and permanent tax difference are insignificant meaning that stakeholders
in Nigeria are interested in companies that produce quality financial reports, which clearly shows that there is high
earnings manipulation among Nige-ria quoted companies as most firms manipulate earnings through abnormal accruals.
This is at-tributed to pressure Nigeria companies face in maintaining existing investors’ confidence, smooth income over
the years. While the significant effects of the book tax gap show that increase or de-crease in the book tax gap is a signal to
high or low earnings quality. These reactions were different in developed economies, like the United States, as the cash effective
tax rate, long-term effective tax rate, tax savings, book tax gap and temporary difference are significant where news
about involve-ment in tax aggressiveness affects the quality of the firm’s earnings.

Since the introduction of the Internet and the platform it created for cross-border trade, the effective enforcement and administration of consumption taxes relating to imported digital services has been an international topic of discussion and research. South Africa amended the VAT Act in 2013 in order to make provision for and clear some uncertainties relating to VAT on imported digital services.
In this study, the South African VAT Act was compared to the New Zealand GST Act as well as the recommendations made by the OECD and it is submitted that the amended South African VAT Act is in general in line with the GST Act of New Zealand and the OECD recommendations with some exceptions. It could be submitted that the VAT application relating to digital services is in essence the same as traditional transactions with specific challenges due to the nature and characteristics of the digital environment.
Global legislation relating the privacy of consumers worldwide as well as identification of jurisdiction of consumers of digital services remain a global challenge which adversely affects the current application of the VAT Act as well as the administration of VAT relating to imported digital services.
It is submitted that the use of audit as an enforcement tool for VAT on imported digital services might be regarded as ineffective at present due to challenges experienced by foreign suppliers and tax authorities to identify jurisdiction of consumers.
It is submitted that the current application of “country-based” VAT legislation should be investigated further together with other possible solutions that take into consideration cyberspace legislation in order to possibly find a more practicable and enforceable solution to international trade with e-commerce as platform.

A thorough review of trust models is carried out in this paper to reveal the key capabilities of existing trust models and compare how they differ among disciplines. Trust decisions are risky due to uncertainties and the loss of control. On the other hand, not trusting might mean giving up some potential benefits. Advances in electronic transactions, mutliagent systems, and decision support systems create a necessity to develop trust and reputation models. The development of such models will allow for trust reasoning and decisions to be made in situations with high risk and uncertainty. In recent years, several attempts have been made to model reputation and trust. However, perceiving trust differently and the lack of having a unified trust definition are among the main causes of the proliferation of many trust models across different disciplines.

The global nature of e-commerce means that some aspects of tax management can no longer be carried out at the national level. However, the taxation of e-commerce should be consistent with the basic principles of international taxation, it should avoid double taxation, and should be simpler to
administer and understand. Proper utilisation of advance technological developments would simplify collection of taxes, which is essential to maintain current consumption tax systems. This paper proposes a pragmatic approach in adapting the existing mechanisms in order to develop an on-line collection and compliance system for taxation of e-commerce. The proposal utilises a combination of
infrastructure providers, authentication bodies, and tax administrations in order to create a feasible and dependable system. In the first instance, it provides the means of creating a dependable and verifiable mechanism enabling a supplier to distinguish between registered businesses and private
customers. Authentication is accepted as a key to generating the trust needed for e-commerce to flourish, and I believe that this must also be extended to the tax status of participants. The process of authentication would be supported by clear and uniform product classification; this element of the compliance system would come from international coordination of respective national tax authorities. The central element to the proposal is the effective utilisation of technology that has created Internet and e-commerce.

Most tax revenue and tax policy research papers discuss historical developments and the current challenges of raising tax revenue. This paper takes a long term view and addresses the possible futures of tax revenue using the Three Horizons model. With the help of this model, it outlines possible futures for raising tax revenue in an environment of rapidly evolving technology, automation, globalization, the rising power of powerful interest groups, and the trend of increased accumulation of wealth in the hands of fewer taxpayers. By analyzing possible futures, the assumptions of key stakeholders are tested.

The advent of the digital age has been the key driving influence of all human activities in the 21st century and birthed the digital revolution. The digital revolution has taken place. It has given rise to a digital economy that challenges our concept of value creation. The focus of this paper would be on Intangibles, which is known as Digital Goods, and the Taxation Challenges.

Consumption taxation of e-commerce should be consistent with the basic principles of international taxation. In order to aid the policy-based discussion in relation to consumption taxation, this paper provides an outline of the fundamental policy concerns that arise in any thoughtful consideration of changes in a system of taxation. The paper explains in broad terms the objectives and principles that should guide the consumption taxation of e-commerce and it critically evaluates the different options forwarded primarily by the OECD for collection of consumption taxes.

The article aims to analyze the legal reason based on the last case, South Dakota v. Wayfair.
This case represents a significative reconsideration of the US Supreme Court precedent,because it validates the South Dakota tax law that forced the sellers to collect and remit the sales tax to the State “as if the seller had a physical presence in the State”. Starting from the
analysis of this SCOTUS case, the comment wants to evaluate the possible effect over the International, European and domestic tax law system. In fact, the establish of a new nexus, based on pervasive digital presence follows the Italian recent law and European proposals

In the context of BEPS Action Plans 8, 9, 10 and 13, related to Transfer Pricing Policy and Documentation, we present an analysis on its interactions with the existing anti-avoidance and protection rules to prevent base erosion currently in force. Brazil is a country that has always presented measures to maintain its taxing level, such as the limitations on remittance and deductibility of royalties, the fixed margin transfer pricing methods, its worldwide taxation on a current basis (with an scope that goes far beyond an original CFC rule) and its thin-capitalization rules, to name a few. These set of rules result in a good protection of the source, even if its companies or individuals have to deal with double taxation. In this context, the OECD placed measures to prevent base erosion and profit shifting. Although not a regular member, Brazil joined the working groups actively and have always expressed its opinions within the action plans drafts – but the message is that the current rules will remain in force, and the country will cherry-pick the action plans suggestions that may be harmonized without giving-up its source rights. The publication is in its original version in Spanish (Updated until January 2016).

Being a South African expat myself, based in Guangzhou PR China, as well as a tax professional, I’ve found myself of course in the same position as any expat starting to work in another country. The same questions any expat has to deal with, I had also experienced first-hand, besides already possessing the technical knowledge to properly ascertain my SA Income Tax obligations. Added to that, due diligence requires that any expat should, on a regular basis, re-examine the tax treaty between the country they are working in, and SA, as well as monitor (via their professional tax consultant) any potential changes in the SA Income Tax Act.

In the midst of performing my own bi-annually due diligence Income Tax status check, and at the same time noticing some posts regarding expats and their SA Income Tax obligations that seemed to cause some confusion, I proceeded to compile this brief analysis (and guide, if you like) of the following obligations of every SA expat that leaves the RSA to start working in another country :

• The obligation to register for SA Income Tax, or not ;
• The obligation on whether an annual income tax return must be filed, or not ;
• The liability, if any, for paying tax on employment income earned by a South African person working in another country (hereafter “expat”).

Article on proposed Diverted Profits Tax Regime in the United Kingdom.

The article makes a point that DPT is unilateral treaty override mechanism.

The article throws light how new regime is ambiguously worded and how it can negatively impact genuine business arrangements.

The article provides summary and analysis of the OECD's discussion draft released on 4 July 2016 on revised guidance on profit split method ('PSM).

The authors analyse the two approaches of the profit split methods given by OECD discussion draft i.e. PSM involving split of actual profits and PSM involving split of anticipated profits and criteria for selecting one of these approaches and explore situations in which PSM is to be selected as most appropriate method.

The article further discusses the guidance given by discussion draft in context of applying PSM to group synergies and using value chain analysis as a tool for applying PSM.

The authors have also presented their views on the guidance with relevant examples and have observed that, new guidance on PSM has introduced objectivity in respect of application of PSM as transfer pricing method, while also attempted to codify certain aspects of its application which may introduce rigidity in selection of this method as most appropriate method.

Consumption taxation of e-commerce should be consistent with the basic principles of international taxation. In order to aid the policy-based discussion in relation to consumption taxation, this paper provides an outline of the fundamental policy concerns that arise in any thoughtful consideration of changes in a system of taxation. The paper explains in broad terms the objectives and principles that should guide the consumption taxation of e-commerce and it critically evaluates the different options forwarded primarily by the OECD for collection of consumption taxes.

This is first international concept paper on this subject and applications of Blockchain/DLT to Multinational Transfer Pricing discussed below is futuristic in nature. The DLT/Blockchain as a technology is at very nascent stage and it may take few years before the applications discussed below are brought into practise

The growth of Internet and electronic commerce (e-commerce) in Indonesia can become a potential income tax. However, some of the benefits of e-commerce business also poses some problems for taxation. Actually in Indonesia, income tax rule of e-commerce has been set in the regulation by issuing SE-62/ PJ/ 2013, but it can not increase the tax compliance. Thus, the purpose of this study is to reveals several factors that affect the voluntary compliance of person who is doing online business associated with the e-commerce tax, through the viewpoint of the Theory of Planned Behavior. This study is a qualitative research by using interpretive paradigms and phenomenology approach. Informants, who involved in this study, are people earn income from online business transactions; both of them make the online business as a main income or other income. The data of the study is obtained from interviews with informants related to their views of voluntary compliance on taxation of e-commerce busi...

Most tax revenue and tax policy research papers discuss historical developments and the current challenges of raising tax revenue. This paper takes a long term view and addresses the possible futures of tax revenue using the Three Horizons model. With the help of this model, it outlines possible futures for raising tax revenue in an environment of rapidly evolving technology, automation, globalization, the rising power of powerful interest groups,and the trend of increased accumulation of wealth in the hands of fewer taxpayers. By analyzing possible futures, the assumptions of key stakeholders are tested.

Taxation of e-commerce is a major concern for international agencies and tax authorities worldwide. Taxation itself is a complex and controversial issue. Hence, it should not come as a surprise that there are so many arguments regarding taxation of e-commerce. The objective of the paper is to find out whether it is possible to tax e-commerce should it be desirable to do so.

With the advent of globalization and technological advancement, an offshore employment relationships are proliferating more than ever making it possible the application of States’ domestic laws in the situations no more. The problem is more exacerbated when it comes to the taxation of the remuneration derived from such employment relationships. Most commonly, double taxation arise because States tax not only domestic assets and transactions but also assets and transactions in other States which benefit resident taxpayers, resulting in the overlap of the States’ tax claims. In order to tackle this pressing problem, devising a mechanism by which employment income could be taxed is proved a matter of no alternative. Not surprisingly, States hesitate to come up with a single multilateral convention on this subject. Nevertheless, two widely accepted model conventions are there with no binding force. In addition, States also preferred to address the issue bilaterally Ethiopia being no exception. Against this background, this piece is aimed at examining how the taxation of [income from employment] is addressed under the OECD and the UN Model Conventions as well as the Ethio-China and Ethio-UK Treaties on comparative basis. Since the latter three conventions are principally reproduced from the OECD MC with only slight difference, to avoid unnecessary redundancy, a mentioning of legal provisions in the work stands for all the conventions except where a specific reference is made otherwise.

I am pleased to share an article on ‘Equalisation Levy’ (introduced in Finance Bill, 2016 of India) titled ‘Equalisation Levy: A toothless taxing tiger’ authored by me.  It will enable you to identify the trigger points of introducing such levy, tax-dodging techniques practiced by the digital companies, global consensus to tackle BEPS, India’s response to BEPS and the concerns over ‘Equalisation Levy’.

Reengineering tax service quality using second
order confirmatory factor analysis, namely, responsiveness,
reliability, in formativeness, assurance and usability is viewed
as an enabler of tax administration effectiveness in collecting
government revenues. This paper examined the psychometric
properties of tax service quality items for tax administration
effectiveness on the self-employed taxpayers. A total of 181
received and usable data was collected and analyzed. The
findings shows the goodness fit indices are adequate with the
model fit indices showing the chi-square value of 215.334, DF
=146, p-value = 0.000, normed chi-square CMINDF) =1.475,
CFI =0.967 and RMSEA = 0.051. In other words, the findings
show that the factors help the tax administrator for providing
effective tax system.

Consumption taxation of e-commerce should be consistent with the basic principles of international taxation. In order to aid the policy-based discussion in relation to consumption taxation, this paper provides an outline of the fundamental policy concerns that arise in any thoughtful consideration of changes in a system of taxation. The paper explains in broad terms the objectives and principles that should guide the consumption taxation of e-commerce and it critically evaluates the different options forwarded primarily by the OECD for collection of consumption taxes.