OECD REPS SET GUIDELINES FOR INTERNET TAXATION

[Tony Barry]

>From Edupage, 13 October 1998

OECD REPS SET GUIDELINES FOR INTERNET TAXATION
Government representatives attending an OECD (Organization for Economic
Cooperation and Development) conference in Ottawa have agreed that business
should take the lead in developing e-commerce and regulate itself within a
framework of support provided by governments.  The group also established an
e-commerce tax scheme based on existing principles of taxation, recommending
that no new taxes be imposed that would discriminate against electronic
commerce, and suggesting that any taxation take place at the point of
consumption.  The group agreed that digitized products should not be treated
as a good -- thus software would not be taxed on the value of the diskette
it is stored on, but rather on the value of the content.  "This is a big
deal for Internet commerce," says a Forrester Research analyst.  "To set
these proposals for Internet taxation is remarkable.  It is one of the
biggest issues facing Internet commerce."  The OECD group plans to address
issues like permanent presence -- for instance, whether the location of a
server or Web site implies permanent presence for the purposes of taxation
-- during the next year.  (TechWeb 10 Oct 98)

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