Cross-border taxation of e-commerce

The main purpose of this study is to examine to which extent tax rules are currently able to treat e-commerce transactions. Jurisdictional matters will gain in importance and get increased attention, especially the allocation of tax revenue between the residence state and the source state. Does a web site or a server constitute a permanent establishment? This question is thoroughly explored. The author proposes that the OECD Model Convention on Income and on Capital should be expanded with new chapters or sections covering VAT and other turnover taxes from an OECD Model Convention on Taxation. Björn Westberg highlights the importance of the general legal structure as a basis for the taxation framework. Tax compliance can only be secured if there is a full disclosure of the parties involved in business transactiona and of the contents of such transactions. But those requirements are not only decisive for the tax authorities. They are also of vital importance for the general legal framework on e-commerce. The author emphasizes the often forgotten dynamic effects of e-commerce in respect of fiscal revenue.