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Governing The Taxation Of Digitized Trade

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  • RAHUL MUKHERJI

Abstract

The paper highlights the challenges for international taxation due to digitized trade. Digitization makes it easy to penetrate foreign markets without the need for physical presence in the buyer’s country. This phenomenon has generated debates on the salience of source versus residence-based taxation, the definition of permanent establishment, and, the administration of consumption taxes. The WTO has not been able to engage effectively in this area. The paper notes both the inadequacy of unilateral approaches and the need for an international organization for setting and monitoring global standards. It commends the vitality of source-based principles and the traditional conception of permanent establishment. It pleads for increased international cooperation for administering consumption taxes. Digitized trade without globally acceptable standards is likely to lead to double taxation or tax evasion or both.

Suggested Citation

  • Rahul Mukherji, 2002. "Governing The Taxation Of Digitized Trade," ASARC Working Papers 2002-05, The Australian National University, Australia South Asia Research Centre.
  • Handle: RePEc:pas:asarcc:2002-05
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    File URL: https://crawford.anu.edu.au/acde/asarc/pdf/papers/2002/WP2002_05.pdf
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    References listed on IDEAS

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