Businesses are still facing enormous complexity in understanding how taxation affects electronic commerce, despite legislative attempts to limit tax impact on the Internet.
Just a year after issuing a guide to help companies understand the complexities of how US tax law applies to the Internet, consultancy Deloitte &Touche has had to produce a new edition updating all the changes in tax laws and Internet legislation.
Although the US government passed the Internet Tax Freedom Act on 21 October, which is intended to preclude taxes that single out the Internet or Internet access providers for three years, the guide notes that many paradoxes and questions remain unsolved.
"Nothing much has been resolved as of yet about taxation of the Internet but in the last year the issues to be addressed have come sharply into focus and are now on the discussion table," Edward Maguire, ecommerce tax partner at Deloitte & Touche, told 'VNU Newswire'.
The guide, 'Taxation of Cyberspace', highlights that certain taxes on Internet transactions are still allowed, as are any state or federal taxes enacted before the recent Act. It also remains unclear whether telecomms should be included with the Internet for tax purposes.
Nor has it been decided how to specify the point of taxation of any Internet business and how to legislate for disparities between regions and countries. Texas, for example, has stated that it will tax retailers hosting a commerce Web site in the state, whilst California regulations say the opposite.
At the same time countries in Europe have protested that the US has a vested interest in blocking Internet specific taxation because it is ahead in deployment of ecommerce and has so far refused to accept the US proposal for a global moratorium on Internet taxation.
But, as deputy secretary of the US Treasury Larry Summers pointed out, testifying in support of the Internet Tax Freedom Act: "Unreasonable taxation of the Internet, or even the fear of unreasonable taxation, could be a significant impediment to the growth of the Internet and electronic commerce."
On the positive side Maguire points out that the Organisation for Economic Cooperation and Development (OECD) is now working on international treaty guidelines for ecommerce.
"This is to be applauded since an international consensus is vital. The OECD is studying the most relevant tax issues that can be affected by Internet commerce: income tax treaty rules, transfer pricing, consumption tax issues, and tax compliance and administration," he said.
The spacecraft found traces of hydrogen and oxygen molecules, known as hydroxyls, embedded in the rocky surface of the asteroid
The skeleton was unearthed more than 20 years ago in South Africa
Moon's dark side is mountainous, rugged and never visible from the Earth
The groundwater basins in some areas of Tehran have been damaged irreversibly