Commerce Defies Traditional Tax Jurisdictions

Using the internet, a company can, in theory, move its e-commerce business to a “tax haven” country and conduct e-commerce outside the jurisdiction of any country that would otherwise tax the transaction.

Also, because of the speed in which transactions occur and the frequent absence of a traditional paper trail, it will be very difficult, if not impossible, to apply traditional notions of tax jurisdiction. This is especially true with intangible property transmitted by computer such as software, digital music or electronic books and services.When using offshore proxies through an encrypted connection, the online activity is submitted to the laws of the jurisdiction of the proxy usie. This is equivalent to offshoring at the press of a button.

December 29, 2011

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