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On the Possibility and Desirability of Taxing E-Commerce

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  • Bo Sandemann Rasmussen

    (Department of Economics, University of Aarhus, Denmark)

Abstract

Over the past decade the taxation of e-commerce has been widely discussed among politicians, tax law experts and economists. To put some perspective on this issue it is analyzed to what extent e-commerce can actually be taxed and the severity of the ensuing tax revenue losses following from future growth of e-commerce is discussed. Since the US and the EU cases differ substantially they are considered separately. Subsequently various arguments supporting the view that e-commerce should receive preferential tax treatment are considered. Although no firm recommendations can be provided some interesting topics for future research are suggested.

Suggested Citation

  • Bo Sandemann Rasmussen, 2004. "On the Possibility and Desirability of Taxing E-Commerce," Economics Working Papers 2004-8, Department of Economics and Business Economics, Aarhus University.
    • Handle: RePEc:aah:aarhec:2004-8
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    File URL: https://repec.econ.au.dk/repec/afn/wp/04/wp04_08.pdf
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    References listed on IDEAS

    as
    1. Goolsbee, Austan & Zittrain, Jonathan, 1999. "Evaluating the Costs and Benefits of Taxing Internet Commerce," National Tax Journal, National Tax Association;National Tax Journal, vol. 52(3), pages 413-428, September.
    2. Jacob Frenkel & Assaf Razin & Efraim Sadka, 1991. "International Taxation in an Integrated World," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262061430, April.
    3. Austan Goolsbee, 2000. "In a World Without Borders: The Impact of Taxes on Internet Commerce," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 115(2), pages 561-576.
    4. Diamond, Peter A & Mirrlees, James A, 1971. "Optimal Taxation and Public Production: I--Production Efficiency," American Economic Review, American Economic Association, vol. 61(1), pages 8-27, March.
    5. Bo Sandemann Rasmussen, 2004. "Preferential Taxation of E-Commerce: Imperfectly Competitive Retail Markets and Trade Costs," Economics Working Papers 2004-9, Department of Economics and Business Economics, Aarhus University.
    6. Goolsbee, Austan & Zittrain, Jonathan, 1999. "Evaluating the Costs and Benefits of Taxing Internet Commerce," National Tax Journal, National Tax Association, vol. 52(n. 3), pages 413-28, September.
    7. Donald Bruce & William Fox & Matthew Murray, 2003. "To Tax Or Not To Tax? The Case Of Electronic Commerce," Contemporary Economic Policy, Western Economic Association International, vol. 21(1), pages 25-40, January.
    8. Myles,Gareth D., 1995. "Public Economics," Cambridge Books, Cambridge University Press, number 9780521497695, October.
    9. Peter A. Diamond & J. A. Mirrlees, 1968. "Optimal Taxation and Public Production," Working papers 22, Massachusetts Institute of Technology (MIT), Department of Economics.
    10. Zodrow, George R, 2003. "Network Externalities and Indirect Tax Preferences for Electronic Commerce," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 10(1), pages 79-97, January.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Bo Sandemann Rasmussen, 2004. "Preferential Taxation of E-Commerce: Imperfectly Competitive Retail Markets and Trade Costs," Economics Working Papers 2004-9, Department of Economics and Business Economics, Aarhus University.
    2. Tehmina S. Khan & Mr. John Norregaard, 2007. "Tax Policy: Recent Trends and Coming Challenges," IMF Working Papers 2007/274, International Monetary Fund.

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    More about this item

    Keywords

    E-commerce; commodity taxation; tax principles; revenue loss; preferential tax treatment; auditing;
    All these keywords.

    JEL classification:

    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations

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