Electronic commerce: Erosion of tax base and challenges to the international tax authorities

Abstract

This article highlights the major tax principles and issues related to the development of electronic commerce from the international perspective. It also evaluates the existing tax rules and suggests possible approaches on how to tax the EC transactions. How the EC transactions can be manipulated to avoid tax is discussed as appropriate. The article also puts forward recommendations for the tax authorities based on the released proposals in various jurisdictions pursuant to EC transactions.