Indirect Taxation of Cross-Border Transactions in Electronic Commerce

This study assesses the current trends and specific features for the indirect taxation of cross-border transactions in electronic commerce. Aim. This study aims to examine the key elements of VAT taxes and customs duties in electronic commerce at the present stage. Tasks. This study identifies the main features of the application of VAT and customs duties in the taxation of international electronic commerce, outlines major problems in this field, and provides solutions. Methods. This study uses logical generalization, comparative, and graphical data analysis. Results. The development of the digital economy has significantly expanded opportunities to provide goods and services to consumers around the world without maintaining a physical presence in the consumer’s country. Indirect taxes on such transactions are often low or absent, which leads to a decline in budget revenues and breaks the rules of equal competition between resident and non-resident sellers. For economic agents, the lack of internationally-recognized standards of taxation results in increased risks of revenue loss and increased costs of compliance with tax regulations. For governments, this leads to risks of declining budget revenue and trade collapse, as well as increased administrative costs from trying to control a large number of low-value transactions. Conclusion. The key problem associated with indirect taxation in digital economy arises from trade in services or intangible products, where the consumer and the provider of services fall within different jurisdictions. Developed countries have adopted and implemented a series of practical initiatives aimed at minimizing the risks of fraud during cross-border transactions in electronic commerce. The primary focus of these initiatives is to ensure swift exchange of up-to-date information within tax and customs authorities guidelines, along with selective grants of preferential taxation for certain sectors of digital economy.

indirect taxation, international finance, VAT, electronic commerce, digital economy, business models, consumption, косвенное налогообложение, международные финансы, НДС, электронная торговля, цифровая экономика, бизнес-модели, потребление

1. Agrawal D. R., Fox W. F. Taxes in an E-Commerce Generation / CESifo Working Paper. N 6050. 2016: [Электронный ресурс]. Режим доступа: https://www.econstor.eu/bitstream/10419/145085/1/cesifo1_wp6050.pdf.

2. Brandas C., Megan O., Craciunescu M. Study on the Impact of E-Commerce on Tax and Accounting Activities // World Applied Sciences Journal. 2013. Vol. 24 (4). P. 534-539.

3. De Sousa M. P. The Challenges of Taxation on E-Commerce in Brazil: Lessons Learned From The United States. Washington, DC, 2014: [Электронный ресурс]. Режим доступа: https://www2.gwu.edu/~ibi/minerva/Spring2014/Monique_Sousa.pdf.

4. Duke J., Efiok S., Kankpang K., Emenyi E. Impediments of Electronic Commerce as a Tax Revenue Facilitator in Nigeria // International Business Research. 2013. Vol. 6 (6). P. 152-161.

5. Einav L., Knoepfle D., Levin J., Sundaresan N. Sales Taxes and Internet Commerce // American Economic Review. 2014. Vol. 104 (1). P. 1-26.

6. Panigrahi D., Sarangi S. K. Legal and Taxation Issues in Online Marketing in India - A Case Study // International Journal of Scientific Engineering and Applied Science. 2016. Vol. 2 (2). P. 50-58.

7. Addressing the Tax Challenges of the Digital Economy, Action 1 - 2015 Final Report, OECD/G20 Base Erosion and Profit Shifting Project. OECD Publishing, Paris, 2015. 290 р.

8. OECD Guide to Measuring the Information Society 2011: [Электронный ресурс]. Режим доступа: http://lincompany.kz/pdf/General/9311021e.pdf.

9. Proposal for equalization levy on specified transactions (Report of the Committee on Taxation of E-Commerce). GovernmentofIndia, 2016: [Электронный ресурс]. Режим доступа: http://incometaxindia.gov.in/news/report-of-committee-on-taxation-of-ecommerce-feb-2016.pdf.

10. Kham T. International Taxation of Electronic Commerce / Niigata University, 2015: [Электронный ресурс]. Режим доступа: http://dspace.lib.niigata-u.ac.jp/dspace/bitstream/10191/32151/2/h26zlk29.pdf.

11. Global B2C E-commerce Report 2016 / Ecommerce Foundation, 2016: [Электронный ресурс]. Режим доступа: https://www.ecommercewiki.org/wikis/www.ecommercewiki.org/images/5/56/Global_B2C_Ecommerce_Report_2016.pdf.

12. World Bank Country and Lending Groups: [Электронный ресурс]. Режим доступа: https://datahelpdesk.worldbank.org/knowledgebase/articles/906519-world-bank-country-and-lending-groups.

13. The Global Entertainment and Media Outlook: 2015-2019. PwC, 2015: [Электронный ресурс]. Режим доступа: http://www.pwc.com/ca/en/entertainmentmedia/publications/pwc-global-em-outlook-2015-2019-canadian-highlights-2015-09-en.pdf.

14. WCO Study Report on Cross-Border E-Commerce. World Customs Organization, 2017. 31 p.: [Электронный ресурс]. Режим доступа: http://www.wcoomd.org/~/media/wco/public/global/pdf/topics/facilitation/activities-and-programmes/ecommerce/wco-study-report-on-e_commerce.pdf?la=en.

15. International VAT/GST Guidelines. OECD, 2015: [Электронный ресурс]. Режим доступа: http://www.oecd.org/ctp/consumption/international-vatgst-guidelines.pdf.

16. Place of Effective Management Concept: Suggestions for Changes to the OECD Model Tax Convention, 2003: [Электронный ресурс]. Режим доступа: http://www.oecd.org/tax/treaties/2956428.pdf.

17. Consumption Taxation of Cross-Border Services and Intangible Property in the Context of E-commerce, A. Guidelines on the Definition of the Place of Consumption, OECD: [Электронный ресурс]. Режим доступа: http://www.oecd.org/tax/consumption/5594831.pdf.

18. Mini one-stop-shop (MOSS Scheme): [Электронный ресурс]. Режим доступа: http://europa.eu/youreurope/business/vat-customs/moss-scheme/index_en.htm.