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The Value Added Tax on Electronic Commerce in the European Union

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  • McLure, Charles E, Jr

Abstract

This paper concludes that any failure to apply value-added tax (VAT) to electronic commerce crossing borders between EU Member States and other countries should not affect the VAT liability of registered traders, even if the reverse charge rule (taxation in the hands of recipients) is not applied. The only type of e-commerce that is problematic involves sales of digital content to consumers and unregistered traders. However, such sales constitute a minuscule fraction of purchases by households and unregistered traders (given the extremely low level of small-business exemptions). Thus, while many believe that the question of how to tax e-commerce under the VAT is urgent, how it is resolved may not be very important. Copyright 2003 by Kluwer Academic Publishers

Suggested Citation

  • McLure, Charles E, Jr, 2003. "The Value Added Tax on Electronic Commerce in the European Union," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 10(6), pages 753-762, November.
    • Handle: RePEc:kap:itaxpf:v:10:y:2003:i:6:p:753-62
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    Cited by:

    1. Elisabeth Gugl & George R. Zodrow, 2014. "The Efficiency of “Benefit-Related” Business Taxes," Working Papers 1406, Oxford University Centre for Business Taxation.
    2. Gugl, Elisabeth & Zodrow, George R., 2019. "Tax Competition and the Efficiency of “Benefit-Related†Business Taxes," Working Papers 19-006, Rice University, Department of Economics.
    3. Wolfram F. Richter, 2018. "Taxing Direct Sales of Digital Services: A Plea for Regulated and Internationally Coordinated Profit Splitting," CESifo Working Paper Series 7017, CESifo.
    4. Tiantian Dai & Shenyi Jiang & Xiangbo Liu & Wen Wang, 2016. "The Impact of Internet Sales Tax in a Search Model of Money: Some Analytical Results," Annals of Economics and Finance, Society for AEF, vol. 17(1), pages 133-144, May.
    5. David R. Agrawal & William F. Fox, 2017. "Taxes in an e-commerce generation," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 24(5), pages 903-926, September.
    6. Elisabeth Gugl & George R. Zodrow, 2019. "Tax competition and the efficiency of “benefit-related” business taxes," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 26(3), pages 486-505, June.
    7. Hodzic, Sabina & Celebi, Hulya, 2017. "Value-Added Tax And Its Efficiency: Eu–28 And Turkey," UTMS Journal of Economics, University of Tourism and Management, Skopje, Macedonia, vol. 8(2), pages 79-90.
    8. Wolfram F. Richter, 2019. "The Economics of the Digital Services Tax," CESifo Working Paper Series 7863, CESifo.

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