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International trade in cyberspace: how to tax digital goods

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Listed:
  • Stehn, Jürgen

Abstract

The paper discusses various possible approaches to turnover taxation in cyberspace. It shows that the main challenge of the new economy is to effectively cope with B2C international trade in digital online goods and services. However, most approaches to turnover taxation discussed in the literature give rise to several surveillance, efficiency, incentive, and identification problems. As a consequence, there seem to be only two appropriate approaches to deal with the special characteristics of international trade in cyberspace, the country-of-origin principle combined with a taxation of digital goods and services at the physical location of producers, and the community principle in combination with a withholding tax (WITHVAT).

Suggested Citation

  • Stehn, Jürgen, 2003. "International trade in cyberspace: how to tax digital goods," Open Access Publications from Kiel Institute for the World Economy 2981, Kiel Institute for the World Economy (IfW Kiel).
    • Handle: RePEc:zbw:ifwkie:2981
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    File URL: https://www.econstor.eu/bitstream/10419/2981/1/Ste_International_Trade_Cyberspace.pdf
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    References listed on IDEAS

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    1. Hanno Beck & Aloys Prinz, 1997. "Should all the world be taxed?," Intereconomics: Review of European Economic Policy, Springer;ZBW - Leibniz Information Centre for Economics;Centre for European Policy Studies (CEPS), vol. 32(2), pages 87-92, March.
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    Keywords

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    JEL classification:

    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • F15 - International Economics - - Trade - - - Economic Integration

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