Capturing Tax on E-Commerce

One of the advantages of the internet and subsequently, e-commerce is the ability to order goods or services from overseas that you might not be able to buy in your own country.

Sometimes you can buy goods that are available here for a much cheaper price from an online merchant. As much as it is great for you – it has caused a headache for the Tax Department.

As more and more electronic transactions have occurred over the past few years, the Tax Department has questioned the ability to capture the taxation due on these transactions.

Due to the nature of e-commerce the transactions can be easily delivered anonymously without leaving a trace of the transaction for the tax department to tax. Businesses can store records offshore, encrypt them or destroy them without a trace. Overseas goods can have the true value of the goods marked down so that they pass through customs without being stopped for additional taxes.

This had led to the OECD (Organisation for Economic Cooperation and Development) to discuss with the international community what is the best way to handle the new business environment of e-commerce.

© 2005 StartRunGrow

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