Tax issues and ramifications of electronic commerce Commission on Taxation jointly with the Business and Industry Advisory Committee to the OECD (BIAC)

BIAC/ICC strongly endorse the continued application of the current tax systems of the OECD member countries to address the issues that arise from electronic commerce. This is the surest way to avoid trade distortion and to achieve neutrality. We reject the need for new income and/or consumption tax regimes to deal with electronically consummated transactions which, we believe, merely reflect a change in the way that business is conducted. We are not opposed to changes where necessary to modernize tax rules to clarify their application to this new way of conducting business. We believe, however, that those changes should be carefully thought out through consultation with the business community before they are implemented.

BIAC/ICC urge governments from both OECD and non-OECD countries to build a broad international consensus in an effort to minimize the incidence of international double taxation on income or consumption, and to reduce compliance obstacles. As a result, businesses will benefit, particularly small businesses, which stand to gain the most from their ability to use the Internet and operate internationally.