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Value added taxes on electronic commerce: Obstacles to the EU Commission’s approach

  • E-Commerce
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Intereconomics

Abstract

While e-commerce is developing tremendously fast, domestic politics and legislation labour to keep up with the dynamics of the new technology. Among other things, fiscal law is a particularly explosive area. Here, the current proposal of the EU Commission is to apply the already existing value added tax to e-commerce. By doing so, the Commission hopes to prevent the massive threatened shortfall in tax revenue. How is this approach of the Commission to be judged? Are there any alternatives?

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References

  1. For a general criticism of taxation of turnover on the Internet see Jens Bleuel, Marcus Stewen: Grundlegende Probleme einer Besteuerung von Internet-Transaktionen, in: Wirtschaftsdienst, No. 2, 1998, pp. 104–110.

  2. Stefan Afhueppe, Konrad Handschuh, Thomas Kuhn: Big Brother. Die Europäische Kommission will künftig den Handel im Internet kontrolleren, in: Wirtschaftswoche, No. 24, 8. 6. 2000, p. 20.

  3. “Eichel gegen steuerliche Bevorzugung des E-Commerce”, in: Handelsblatt, 15. 6. 2000, p. 6.

  4. Joachim Hoenig: Streit um Besteuerung von E-Commerce, in: Handelsblatt, 1. 3. 2000, p. 3.

  5. German Federal Ministry of Economics and Technology, in: Tagesnachrichten, No. 11007, 14. 6. 2000, Berlin, p. 1.

  6. Nina Bovensiepen: Finanzminister knabbern am Internet-Kuchen, in: Süddeutsche Zeitung, 7. 6. 2000, p. 2.

  7. For the following paragraph see Jens Bleuel, Marcus Stewen, op. cit. Grundlegende Probleme einer Besteuerung von Internet-Transaktionen, in: Wirtschaftsdienst, No. 2, 1998, p. 107 ff.

  8. See for example NetAddress: Internet URL: http://netaddress. usa.net (29.6.2000).

  9. See D. M. Goldschlag, M. G. Reed, P. F. Syverson: Privacy on the Internet, Naval Research Laboratory, Washington, D.C., Internet URL: http://www.itd.nrl.navy.mil/ITD/5540/projects/onion-routing/inet97/index.htm (29.06.2000).

  10. Similarly also Harmen Lehment: Eine Online-Mehrwertsteuer ist der falsche Weg, in: Handelsblatt, 3.4. 2000, p. 2.

  11. See: Internet URL: http://www.visa.com/nt/ecomm/security/set. html (29.6.2000).

  12. See: Internet URL; http://www.digicash.com/ (29.6.2000); for general information on systems of payment on the Internet compare A. Dahl, L. Lesnick: Internet Commerce, New Riders, Indianapolis (Indiana), 1996, pp. 85–122; and J. Bleuel, op. cit. Grundlegende Probleme einer Besteuerung von Internet-Transaktionen, in: Wirtschaftsdienst, No. 2, 1998, pp. 56–61.

  13. “Eichel gegen steuerliche Bevorzugung des E-Commerce”, op.cit. in: Handelsblatt, 15. 6. 2000, p. 6.

  14. See also Harmen Lehment, op.cit. Eine Online-Mehrwertsteuer ist der falsche Weg, in: Handelsblatt, 3. 4. 2000, p. 2.

  15. Nina Bovensiepen, op. cit. Finanzminister knabbern am Internet-Kuchen, in: Süddeutsche Zeitung, 7. 6. 2000, p. 2.

  16. At this point we do not discuss the suggestion of a “bit tax”; see: Hanno Beck and Aloys Prinz: Should All the World be taxed? Taxation on the Internet, in: INTERECONOMICS, Vol. 32, No. 2, 1997, pp. 87–92.

  17. See also Harmen Lehment, op. cit. Eine Online-Mehrwertsteuer ist der falsche Weg, in: Handelsblatt, 3. 4. 2000, p. 2.

  18. For example Stefan Afhueppe, Konrad Handschuh, Thomas Kuhn, op. cit. Big Brother. Die Europäische Kommission will künftig den Handel im Internet kontrolleren, in: Wirtschaftswoche, No. 24, 8. 6. 2000, p. 21.

  19. Martin Erdner: Steuern im Internet: Technisch kein Problem, in: Süddeutsche Zeitung, 7. 6. 2000, p. 2. In addition, establishing a clearing house would limit the risks involved in passing on credit card numbers.

  20. ISA State Taxation Task Force: Logging On to Cyberspace Tax Policy—Executive Summary, Internet URL: http://www.isa.net/about/releases/taxexsum.html (21. 7. 2000), p. 5.

  21. Harmen Lehment, op. cit. Eine Online-Mehrwertsteuer ist der falsche Weg, in: Handelsblatt, 3. 4. 2000, p. 2.

  22. See for example M. Rose: Ein einfaches Steuersystem für Deutschland, in: Wirtschaftsdienst, No. 8, 1994, pp. 423–432; as well as M. Rose: Argumente zu einer “konsumorientierten Neuordnung des Steuersystems”, in: Steuer und Wirtschaft, 1989, p. 191–193.

  23. See: “Steuerfreie Geschäfte im Internet—Bill Clinton will das globale Netz zur Freihandelszone machen”, in: Süddeutsche Zeitung 4. 7. 1997, p. 22.

  24. Harmen Lehment, op. cit. Eine Online-Mehrwertsteuer ist der falsche Weg, in: Handelsblatt, 3. 4. 2000, p. 2.

  25. See for example S. Marvin: Dematerializing The City: Telematics And The Urban Environment, Paper prepared for the Conference “Challenges of Sustainable Development”, Amsterdam, Aug. 22–25, 1996.

  26. See also Hanno Beck’s and Aloys Prinz’s proposal: Ökonomie des Internets, Frankfurt/New York: Campus, 1999, pp. 107 f.

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Authors and Affiliations

  1. Economist and software developer, Mainz, Germany

    Jens Bleuel

  2. Johannes Gutenberg University, Mainz, Germany

    Marcus Stewen

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  1. Jens Bleuel
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  2. Marcus Stewen
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Bleuel, J., Stewen, M. Value added taxes on electronic commerce: Obstacles to the EU Commission’s approach. Intereconomics 35, 155–161 (2000). https://doi.org/10.1007/BF02930256

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