View
1
Download
0
Category
Preview:
Citation preview
WORLD SERVICES GROUP
E – Commerce
• Taxation Aspects of Electronic Commerce
• Description
• Domestic Tax Implications
• International Tax Issues
• Conclusions in solving e-commerce tax issues
Latin American Regional Meeting
E – Commerce Trends
• Internet: changes in how we live and do business
• Internet: new way to reach out to individuals
• E- Commerce and broadband growth
• New business opportunities from constant change in technology (hardware and software development)
• To interact with customers in not dependent on location and it is easier to reach people in many different states and countries
• Products are delivered electronically and payment is made with electronic money
E- Commerce Tax Issues
E – Commerce Trends
E- Commerce Tax Issues
Business
Consumer
Government
Employee
Business
B2B B2C B2G B2E
Consumer
C2B C2C C2G
Government
G2B G2C G2G G2E
Domestic Tax Implications
• Location: Existing tax systems tend to determine tax consequences based where the taxpayer is located
• Nature of the product: E-commerce allows, some type of products (such as music, newspapers, etc.) to be delivered in digitized (intangible) rather than tangible form
• New Marketing Techniques: Individuals can offer their unwanted items to a worldwide group of potential buyers
• Way: Indirect: is similar to traditional business. Direct: the whole transaction is carried out in Internet
E- Commerce Tax Issues
Domestic Tax Implications
• VAT: (Value Added Tax)
• Registered Tax Payers (Debit-Credit) or Consumers
• Sales of movable assets on the domestic market. Importation, production and retailing are also levied
• Export of goods are not subject to VAT
• Leasing and rendering of services is subject to VAT
• Import of services (rendered abroad with economic use in AR)
• E-commerce is not specifically treated by the law
• Regulations: VAT Withholding Payments with credit cards
E- Commerce Tax Issues
Domestic Tax Implications
• Turn-Over Tax: Provincial Tax (gross sales)
• Argentina: 24 Provinces
• Multilateral Agreement -Tax Basis: distribution
• E-Commerce: Resolution 83/2003 (CA)
• Tax basis: Internet: (corresponds to the province of the buyer)
• Buenos Aires City: Resolution 142. Web site as Withholding Agent
• Municipal Tax Rates:
• Argentina: Tax basis: Sales
• Servers location
E- Commerce Tax Issues
International Tax Issues
• Challenge for Tax Administrations:
• Multi-jurisdictional nature of transactions
• Potential anonymity of the parties
• Tax Residence
• Worldwide income for tax residents
• Income arising in one country of any person not tax resident
• Criteria for considering whether a trade is being carried on within the country
• Can Withholding Tax be imposed on e-commerce payments?
E- Commerce Tax Issues
International Tax Issues
• Internet: www (World Wide Web)
• Web Page
• Server
• I.P.S (Internet Service Provider)
• Consumer: Downloading
• Where must Withholding Tax be imposed?
E- Commerce Tax Issues
E- Commerce Tax Issues
E- Commerce Tax Issues
E- Commerce Tax Issues
E- Commerce Tax Issues
International Tax Issues
• Argentine Income Tax Law
• Section 5º: Argentine source: goods situated and economically exploded in our country
• Section 12º: Management fee, Engineering, Know-how, Technical Assistance – Limitation for the deduction
• Section 6º to 11º: Specific tax rules (Freight, International news services, license fees for the use of films)
• Section 93º: Transfer of Technology – Use of Patents and Trademarks: 21% 28% (INPI) Others: 31.5%
• No specific rules for e-commerce
E- Commerce Tax Issues
International Tax Issues
• Double Taxation treaties
• To prevent a taxpayer from being taxed in more than one jurisdiction. Argentine has signed 18 tax treaties
• Permanent Establishment: Section 5º OECD Model
• Royalties: Section 12º OECD Model (Tax rates between 10% and 18%)
E- Commerce Tax Issues
International Tax Issues
• Ottawa Taxation Framework Conditions: International Ministerial Conference on E-Commerce in October, 1998
• O.E.C.D. (Organization for Economic Co–operation and Development)
• Publication in May 2001 “Taxation and Electronic Commerce” includes conclusions and recommendations that allows for “greater certainty among business and consumers in relation to the taxation of electronic commerce”
• T.A.G. (Technical Advisory Group on Monitoring the application of existing treaty norms for taxing business profits) created in 1999
E- Commerce Tax Issues
International Tax Issues
• International Direct Taxation (O.E.C.D.)
• Clarification on the application of permanent establishment
• Definition in E-Commerce. Model Tax Convention on Article 5
• Treaty Characterization Issues arising from E-Commerce
• Attribution of profit to a permanent establishment
• Impact of the communications revolution on the application of “Place of Effective Management” as a tie breaker rule
• Report by the Business Profit TAG: views of the TAG
Latin American Regional Meeting
International Tax Issues
• Consumption Tax Issues (O.E.C.D.)
• Consumption tax aspects of electronic commerce (Committee's Working Party Nº 9)
• Report by the Consumption Tax TAG: views of the TAG
• Report by the Technology TAG
• Tax Administration Issues (O.E.C.D.)
• Tax Administration Aspects of Electronic Commerce: responding to the challenges and opportunities (Committee's Forum on Strategic Management)
• Report by the Professional Data Assessment TAG
Latin American Regional Meeting
International Tax Issues
• World Trade Organization
• The second (Geneva) Ministerial Conference: Declaration on Global E-Commerce in May, 1998
• European Union
• Directive 2000/31/EC: Basic legal framework for electronic commerce in the international market
• Expect Group on E-Commerce created in October, 2005
Latin American Regional Meeting
Conclusions in solving e-commerce tax issues
• OECD countries and non OECD countries are firmly committed to the basic principles in the Taxation Framework Conditions (Ottawa) –Taxation neutral and equitable
• Lack of domestic regulations in many countries and need of clarification
• Consumption Taxes: specifically in not developed countries
• Income Taxes: Double Tax Treaties: to include a section, specifically for e-commerce
Latin American Regional Meeting
Thank you!
www.sms.com.ar
info@sms.com.ar
Latin American Regional Meeting
Recommended