E-Commerce Conference Tackles Global Tax Issues
The exponential growth of international, cross-border e-commerce is causing governments to reconsider their tax strategies with a long term view to creating a coordinated global tax structure. Scenarios are already emerging where global corporations are discovering that e-commerce is affecting their tax strategies. How should a company headquartered in Sydney, with it's global server located in Kuala Lumpur handle the sale of an item manufactured in, and delivered directly from, Florida to a customer in Denmark? Which government gets the tax, or do the Australian, Malaysian and American governments all get a slice? How does the Danish government recover any import duty that may apply? The answers to these and many other questions are already affecting every global corporate e-commerce strategy.
The critical issue facing governments is to find solutions to these questions, creating a more homogenous international tax regime, whilst not eliminating a nation's sovereignty over import duties and treasury policies.
At the forthcoming World E-Com 1999 conference in November (www.we-co.org), the first global government-to-business e-commerce conference of its kind, the OECD will review how far these strategies have developed after its inter-governmental briefing on October 12 and 13 in Paris.
Risaburo Nezu, a director with the OECD specialising in e-commerce strategies says that tax is a field "…where existing rules must be modified or reinterpreted if online transactions are to be treated effectively and equitably to offline transactions."
The OECD's Risaburo Nezu is also concerned about cohesion in the global e-commerce network. Among one of his many concerns is that the same levels of protection and confidence must be ensured with e-commerce, as with the traditional physical market. Questions about privacy, consumer protection and the establishment of secure infrastructure and authentication systems present formidable challenges.
Efforts are already underway bilaterally and in multilateral forums like the OECD to move towards this goal rapidly, but there are important issues that need to be resolved. The role of the government and private sector needs to be examined.
(The World E-Com 1999 conference takes place at the Burswood Convention Centre in Perth, Western Australia, on November 8th, 9th and 10th and is organized by IBC Conferences in Sydney.