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Taxing Cross-Border Online Sales for Pareto Improvement in Tax Revenue

Author

Listed:
  • Hikaru Ogawa

    (Faculty of Economcis, The University of Tokyo)

  • Ryota Tsuchiya

    (Graduate School of Economcis, The University of Tokyo)

Abstract

This study examines the effect of international taxation rules that allow market countries to tax the sales of a giant digital IT firm based outside the countries. It develops an asymmetric tax competition model where one country hosts an online service supplier selling digital services over the Internet worldwide. The main finding indicates that changes in tax rules improving market countries will not only benefit them but also the country hosting the global supplier whose tax bases would shrink.

Suggested Citation

  • Hikaru Ogawa & Ryota Tsuchiya, 2024. "Taxing Cross-Border Online Sales for Pareto Improvement in Tax Revenue," CIRJE F-Series CIRJE-F-1235, CIRJE, Faculty of Economics, University of Tokyo.
    • Handle: RePEc:tky:fseres:2024cf1235
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    File URL: http://www.cirje.e.u-tokyo.ac.jp/research/dp/2024/2024cf1235.pdf
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    References listed on IDEAS

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