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International Trade in Cyberspace:How to Tax Digital Goods

Author

Listed:
  • Stehn, Jürgen

    (Kiel Institute for World Economics)

Abstract

The paper discusses various possible approaches to turnover taxation in cyberspace. It shows that the main challenge of the new economy is to effectively cope with B2C international trade in digital online goods and services. However, most approaches to turnover taxation discussed in the literature give rise to several surveillance, efficiency, incentive, and identification problems. As a consequence, there seem to be only two appropriate approaches to deal with the special characteristics of international trade in cyberspace, the country-of-origin principle combined with a taxation of digital goods and services at the physical location of producers, and the community principle in combination with a withholding tax (WITHVAT).

Suggested Citation

  • Stehn, Jürgen, 2003. "International Trade in Cyberspace:How to Tax Digital Goods," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 18, pages 243-265.
    • Handle: RePEc:ris:integr:0233
    as

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    References listed on IDEAS

    as
    1. Sinn, Hans-Werner, 1990. "Tax harmonization and tax competition in Europe," European Economic Review, Elsevier, vol. 34(2-3), pages 489-504, May.
    2. Mr. Michael Keen, 2000. "VIVAT, CVAT and All That: New Forms of Value-Added Tax for Federal Systems," IMF Working Papers 2000/083, International Monetary Fund.
    3. Hanno Beck & Aloys Prinz, 1997. "Should all the world be taxed?," Intereconomics: Review of European Economic Policy, Springer;ZBW - Leibniz Information Centre for Economics;Centre for European Policy Studies (CEPS), vol. 32(2), pages 87-92, March.
    4. Stehn, Jürgen, 1994. "Turnover taxation in the EC: options for future reforms," Kiel Working Papers 613, Kiel Institute for the World Economy (IfW Kiel).
    5. Charles McLure, 2000. "Implementing Subnational Value Added Taxes on Internal Trade: The Compensating VAT (CVAT)," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 7(6), pages 723-740, December.
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    More about this item

    Keywords

    International trade; Turnover taxation; Electronic commerce; Sectoral efficiency;
    All these keywords.

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation

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