Evaluation of the problems regarding taxation of electronic commerce in the context of informal economy and tax evasion

Abstract

Technology grants new forms of trade in the digital age. Electronic commerce is a commercial transaction using the internet. Tangible and intangible goods can subject the e-commerce. In additionally, tax authorities have important duties, for instance registering transactions correctly and determining the accurate quantity of tax, and determining taxable income. Lots of bilateral treaties have been made between countries. International organizations are trying to find solutions for the conflicts between countries. The other side of digitalization is given rise to the informal digital economy. Calculating the created value in the digital platforms is difficult. The digitization process is growing rapidly, so e-commerce creates tax evaders. Users participate in electronic commerce without registering. Moreover, some e-commerce companies are engaged in illicit financial flow, money laundering, and tax evasion. Electronic entities like Uber, Airbnb and Blablacar are the principal part of the sharing economy. Concerning the problems challenged with the taxation of e-commerce, the OECD supports the idea that countries should include the principles of neutrality, efficiency, certainty and simplicity, equality, and flexibility to minimize tax evasion. Also, countries make regulations individually about sharing economy. We discuss the current situation and regulations about these issues. © Peter Lang GmbH.